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Digital transformation is '2nd reform' after Doi Moi

Digital transformation starts with a mind shift. 

At the launching ceremony of the "Vietnam Digital Awards 2021” held on April 1, 2021, I said that this digital transformation must be "reform of thinking" and the "2nd reform", after the first “Doi Moi” (reform) in the late 80s of the 20th century. 

Chuyển đổi số là tiến trình Đổi mới lần 2”-2

The issue that is very important and vital for many organizations and businesses in digital transformation must start from innovative thinking.



In his famous book entitled "The Structure of Scientific Revolutions", Thomas Kuhn said that science or landmark advances do not develop in a straight line, do not develop linearly, by steadily accumulating new knowledge, but rather undergo revolutions through "paradigm shifts", including sudden changes of the nature of scientific and social exploration and development.

As long as we keep the same old patterns, it is difficult to create mutations or radically change the problem. The final solutions are just a form of patchwork, or optimization of existing things. The revolutionary character associated with shifting to a new paradigm.

The book "Futureproof, How To Get Your Business Ready For The Next Disruption" by Caleb Storkey and Minter Dial talks about 15 factors that determine the future of business and personal careers. The authors mention the shift of old and new forms of thinking in the current situation (see chart 1).

Digital transformation is a buzzword like Industrial Revolution 4.0 (IR 4.0), Big Data (Big Data), artificial intelligence (AI), Cloud computing or Internet of Things.

Professor Dan Ariel, the author of “Predictably Irrational” said: "Digital transformation is very similar to sex. Everyone talks about it. Only a few really know how. Everyone thinks other people are doing it. So, everyone is claiming that they are doing it."

I agree with Minister Nguyen Manh Hung’s statement made at a recent conference on digital transformation held in Ba Ria-Vung Tau: "You can do it if you do it quickly. Because if you do it quickly, you will be able to concentrate energy, so you can overcome difficulties. To do digital transformation, we should do more and speak less. Because digital transformation is new to the whole world, only doing it then we understand it and overcome it. We should not talk too much about the new."

However, digital transformation is the right thing to do, but how to do it is not easy. The level or degree of digital transformation of Vietnamese firms is very low. If we use the five-stage model of assessing the degree of digital transformation of firms that author Tony Saldanha wrote in his book “Why Digital Transformations Fail: The Surprising Disciplines of How to Take Off and Stay Ahead”, most companies in Vietnam are only in phase one and two. Some Vietnamese technology companies such as FPT and Viettel are in the third stage, striving to stage four. And the fifth stage includes the leading technology companies in the world such as Facebook, Amazon and Google.

The first stage is the foundation, that is, the conversion of documents, the process to the digital platform. This is essential for digital transformation, and our first thing to do is to digitize the process and documents.

The second stage, also known as siloed, is when some business leaders begin to realize the breakthrough potential of digital transformation, so they sponsor these efforts. For example, a marketing manager sees the potential of using online channels to sell goods, for example.

The third stage, partially synchronized, is the stage where business leadership sees the need for a single, holistic strategy for digital transformation.

The fourth stage, fully synchronized, is when the business has completely transformed into a new digital business model.

The fifth stage, called "Living DNA", is when the company not only transforms its business model but also changes its corporate culture. At that time, digital transformation has become an engine of continuous transformation, continuously innovating business activities.

The current approach, in my observation, is digital transformation driven by technology. Technology firms present their solutions and invite businesses to use. It’s like “I have this advanced technology! You guys just use it, it will bring benefits anyway.”

That is true, because our digital transformation is low. Applying information technology and performing digitalization will bring about some short-term benefits. But in the long run, it will be difficult to develop in stage three, stage four and then stage five. Enterprises have a heavy "legacy", divided by many technologies that cannot be integrated into a whole.

On the basis of the potential risks mentioned above, the way I propose is to go by the basic principles. "The important thing is strategy, not the technology that drives digital transformation. This means that there must be a complete strategy, planning and then we choose the technology."

The issue is very important and vital for many organizations and businesses. Digital transformation, after all, must start from innovative thinking.

Dao Trung Thanh

(Consultant on Digital Transformation, Telecommunication - IT Strategy)


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