What is digital transformation?

Digital transformation application and traffic monitoring from Vinh City's IOC Smart Urban Operations Center. Photo: Nguyen Hai

In the world, digital transformation began to be mentioned a lot around 2015, popular since 2017. In Vietnam, digital transformation began to be mentioned a lot around 2018. The Prime Minister approved the National Digital Transformation Program on June 3, 2020.

Digital transformation is the next step in the development of information technology, achieved thanks to the remarkable progress of new breakthrough technologies, especially digital technology.

Digital transformation is a process of overall and comprehensive change of individuals and organizations in the way of life, work and production methods based on digital technologies.

The concept of digital transformation will continue to be clarified through questions and answers in the following section.

What is computerization?

Informatization, also known as information technology application, is the digitization of existing business processes. Normally, informatization does not change existing processes or existing operating models. When informatization is at a high level, leading to changes in processes or operating models, it is called digital transformation.

What is the fundamental difference between digital transformation and computerization?

Informatization, or the application of information technology, is the digitization of existing processes, according to existing operating models, to provide existing services. Digital transformation is the digitization of an entire organization. Digital transformation is changing to new processes, new organizational models, service delivery methods or providing new services.

What is the fundamental difference between digital transformation and science, technology and innovation?

Digital transformation is the transformation of operating models based on digital technology and digital data. Science, technology and innovation are creating new values ​​based on breakthroughs in scientific research and technological applications.

Digital transformation and innovation in the context of the Fourth Industrial Revolution are essentially one and the same.

What is digital technology?

In life, people communicate with each other using analog signals, represented in the form of voice. In the digital environment, computing devices communicate with each other using digital signals, represented in the form of binary signals 0 and 1. Digital technology, broadly understood, is digital signal processing technology, or information technology.

In the context of the Fourth Industrial Revolution, digital technology, in a narrow sense, is a higher level of development, the next step of information technology, allowing faster calculations, more data processing, larger capacity transmission, at lower costs. In a broad sense, digital technology is one of the main technology groups of the Fourth Industrial Revolution, represented by cloud computing, big data, artificial intelligence, blockchain, virtual reality, etc. The broad understanding is more common.

Over the past 30 years, we have witnessed three waves of technology, each lasting about 15 years.

The first wave, from 1985 to 1999, associated with the popularity of computers, can be tentatively called the wave of information digitization, converting documents from paper to electronic versions.

The second wave, from 2000 to 2015, associated with the popularity of the Internet, mobile phones and mobile telecommunications networks, can be tentatively called the wave of digitalizing business processes, computerizing business processes to improve productivity and efficiency.

The third wave, which is said to have started in 2015 and is expected to last until 2030, is associated with the breakthrough development of digital technology, and can be tentatively called the digital transformation wave, bringing all activities from real society to cyberspace, from traditional environment to digital environment.

The four typical digital technologies that promote digital transformation are artificial intelligence, the Internet of Things, big data, and cloud computing. In addition, blockchain is also an important digital technology of digital transformation.

What is the fourth industrial revolution?

Industrial revolutions occur when there are major technological breakthroughs that lead to profound changes in production and society. The fourth industrial revolution is said to have begun this decade with breakthroughs and resonance of many technologies, including digital technology and creating smart manufacturing.

The first industrial revolution was the period from the late 18th century with the invention of the steam engine and the creation of mechanical production. The second industrial revolution was the period from the early 20th century with the appearance of electricity and the creation of mass production. The third industrial revolution was the period from the 1970s with the appearance of electronics, computers, the Internet and the creation of automated production.

What is the fundamental difference of the Fourth Industrial Revolution?

A new industrial revolution has two main contents: what technology and what transformation. With the Fourth Industrial Revolution, technology is digital technology and transformation is mainly digital transformation, transforming the operating model of agencies, organizations and businesses based on digital technology.

The past three revolutions were mechanization, electrification, and automation, where machines replaced manual labor. The Fourth Industrial Revolution is intelligence, where machines replaced mental labor.

The more digital technology is used, the more users, the cheaper it is, the price per person approaches 0. Digital technology processes a lot of data, the more data, the smarter it is, the user decides the intelligence of the system, not the original technology. That is, the user plays a more important role than the creator of the original technology. Original technology is not as important and decisive as in previous industrial revolutions.

The Fourth Industrial Revolution is about the willingness to discard the old, which is no longer suitable, or to create experimental space for the new, which is unprecedented and not clearly regulated. Therefore, the Fourth Industrial Revolution is more of an institutional revolution than a technological revolution.

For example, do you dare to turn teachers into teaching assistants? Do you dare to abandon the system of subordinates reporting to superiors? Do you dare to allow digital banks without employees, digital universities without teachers? So, digital transformation is a story of daring or not daring to innovate, accept new things. And therefore, digital transformation depends on one person, that is the leader. If the leader does not have political determination, digital transformation will not happen. For new things that do not have regulations, the Party Committee and the leadership will decide to pilot them first, in a limited space and time.

What is artificial intelligence?

Humans are trying to give machines the intellectual capabilities of humans and calling it artificial intelligence. In this sense, artificial intelligence has a long way to go before it gets closer to that. But in the narrower sense, artificial intelligence that “augments human intellectual capabilities,” has made great strides in the past two decades.

Machine learning is a branch of artificial intelligence that aims to make machines capable of learning like humans. Learning is acquiring new knowledge. Machine learning is based on data. As more and more data and computing power become stronger, breakthroughs in machine learning have been created.

Deep learning is a major, breakthrough, and important development direction of machine learning. Deep learning is based on simulating the structure of neural networks and the operation of the human brain to process and analyze large data, including both structured and unstructured data.

Artificial intelligence can be likened to the human nervous system.

What is the Internet of Things?

Internet of Things (IoT) is a fundamental technology of the Fourth Industrial Revolution. If the Internet is a network connecting devices such as computers, smartphones, etc. to exchange and share data, the Internet of Things is a network connecting all things to do the same thing. Thanks to smart sensors and network connections, for the first time in human history, inanimate objects, household items, such as electric fans, microwave ovens, or tree branches and blades of grass "speak" and communicate with each other and with people. The Internet of Things plays an important role in connecting the real and digital environments.

The Internet of Things can be likened to human senses.

What is big data?

Data is generated from billions of smartphones, sensor devices that connect all things and human activities in the network environment. Every day, the data generated can be equivalent to the data stored in one billion DVDs in the past. If previous technology needed a very long time to process such data, current digital technology allows processing and analysis in a much shorter period of time to extract information, knowledge or make appropriate decisions. If previous technology processed structured data, current digital technology mainly processes and analyzes unstructured data. Unstructured data accounts for 70-80%, therefore, it contains more information than structured data.

Big data can be likened to the human brain.

What is cloud computing?

Cloud computing is a technology that allows computing power to reside on virtual servers, called clouds on the Internet of providers instead of on home computers and offices on the ground, for people to connect and use as a service when they need it. Simply put, cloud computing is like the electricity grid. Individuals, households, and businesses, instead of investing in their own computing servers, like generators, use cloud computing services like the electricity grid, paying for what they use without having to worry about operations and management.

Cloud computing can be likened to human muscle.

What is blockchain?

Blockchain, as the name suggests, is a distributed data chain on the network, consisting of information blocks linked together by encryption and expanding over time. Because of encryption, it is secure. Because of decentralization, no one can control it all. Because of linkage, any modification leaves a trace, non-repudiation. Because of all these factors, it ensures safety, reliability and transparency.

With such features, transactions in the blockchain network take place automatically without the need for third-party certification. Blockchain technology will gradually reduce and eliminate the role of intermediaries in transactions.

What are the biggest difficulties and challenges of digital transformation?

The biggest difficulty of digital transformation is changing habits. The biggest challenge of digital transformation is having the right awareness.

Humans have been accustomed to the physical environment for centuries. Moving to the digital environment means changing habits. Changing habits is difficult. Changing habits takes a long time. Changing habits in an organization depends mainly on the determination of the leader.

Digital transformation is unprecedented, so it is difficult to have the right perception. The right perception of digital transformation must be placed in the specific context of an organization. Digital transformation is a matter of perception, not just a matter of technology, or whether or not a leader dares to do it.

What's wrong with digital transformation?

Digital transformation, like everything else in life, has two sides, because digital technology is the source of great good and also the source of potentially terrible harm. We may not be able to fully imagine all of those good and terrible things at the present time.

The transition to the digital environment requires each citizen to equip themselves with the necessary digital skills. Similar to the real environment, there are always vulnerable groups in the digital environment, who are the targets of bad actors. They can be the elderly, children or any of us.

The consequences of the digital environment include scams, cyberbullying, hate group sites and terrorist sites.