Why do Businesses Fail at Digital Transformation?


Digital transformation is an ultimate goal that myriad businesses in Vietnam are striving towards, but not all of them can achieve it. Statistics from the Vietnam Association of Business Administrators show that over 90% of companies fail to perform this process. So what are the culprits behind their failure? Read the following blog to find out some common mistakes in the digital transformation of Vietnamese enterprises.

Six causes of digital transformation failure in Vietnamese firms

Six causes of digital transformation failure in Vietnamese firms

One of the most important things before starting digital transformation is to set out realistic goals and sound strategies. Proper objectives and strategies allow businesses to formulate plans, execute, inspect, evaluate, and modify the process of integrating digital technology effectively. However, many companies fantasize about the "great success" of their digital transformation programs and set unattainable goals within a short period of time. In addition, several businesses focus too much on technology that they ignore comparing their digital transformation objectives with the current situation, available resources and development orientations, leading to discrete and ineffective strategies that yield unsatisfactory results.

Unclear goals make it easy for businesses to lose direction during the digital transformation process.

Lack of leaders capable of encouraging innovation

Digital transformation is a comprehensive structural change, so it needs to be pioneered and led by inspiring leaders who have the desire to change. They must be assertive individuals who can relentlessly drive innovation and motivate employees throughout the transition. However, Mr. Albert Antoine – a technology consultant on data science and artificial intelligence, said that many Vietnamese leaders often make the mistake of thinking that digital transformation is simply buying software and applying it into the companies. Some leaders even entirely delegate the task of researching and implementing technological changes to the IT department and consider this to be the sole responsibility of this division. That is a serious mistake

Business leaders play an important role in leading the digital transformation process.

Inappropriate application of technology

Technology determines 70% of business success in all digital transformation phases. Businesses can choose appropriate technology platforms based on their scales, goals and operating models. Currently, a series of new technologies has appeared, such as blockchain, big data, AI, IoT, etc., making businesses overwhelmed. Besides, many companies apply all the most advanced technologies without careful consideration while the infrastructure system is too old and incapable of handling the process. In this case, these technologies not only fail to promote their value but also put a lot of pressure on the current system, making the enterprise's digital transformation program easily end in failure.

Technology changes, but corporate culture does not

Corporate culture is an important aspect in fostering innovation and is critical to the success of digital transformation. Enterprises that want to use technology effectively must train their employees to change outdated thinking and accept the benefits of technologies. Research shows that developing corporate culture is not the top concern of many enterprises in Vietnam. Additionally, the conservatism of numerous enterprises makes employees afraid to step out of their comfort zone, to innovate, thus making the implementation of a digital transformation strategy more arduous and difficult.

In order to innovate the business model, we must first change the thinking of the staff

Overestimate the benefits and underestimate the costs

Digital transformation should be considered as a long-term investment process that requires rigor from enterprises. Therefore, to run the digital transformation smoothly, enterprises must evaluate their capabilities and allocate resources properly. Many enterprises fail in digital transformation because their expectations for the benefits are too high, but they overlook the commensurate investment costs.

The expected benefits of digital transformation must be commensurate with the investment.

Lack of expertise and experience in digital transformation

Enterprises that lack expertise and experience in digital transformation are more likely to make mistakes, such as mistakes in goal setting, financial and risk management, human resource replenishment, etc. All of the aforementioned factors can result in a series of mistakes that can quickly derail a company's digital transformation plan. According to an article in the Vietnam Journal of Science and Technology, most domestic enterprises lack experience in applying and exploiting current technology to modify their business models. In this case, the participation of organizations to advise and facilitate digital transformations is critical.

FUNDGO Startup and Innovation Fund is one of pioneers in assisting enterprises in the Mekong Delta and across the country in the process of digital transformation. The Fund has also participated in a variety of activities and events, as well as collaborated with universities and colleges in the region to conduct counseling and career advisory sessions in order to promote human resources to meet the requirements of the digital transformation process. 

Representatives of FUNDGO discuss with other organizations at an event.

FUNDGO continues to support necessary resources, training, and connecting partners to help enterprises access and implement digital technology. The Fund will work with the Digital Transformation Alliance (DTS) to help companies effectively implement digital transformation, generate new values, build competitive advantages, and foster sustainable development.



arrow left arrow right

Doanh nghiệp khoa học công nghệ là gì?

Doanh nghiệp khoa học công nghệ là gì? Được hưởng những chính sách và lợi ích nào? Các bước đăng ký thành lập doanh nghiệp khoa học công nghệ ra sao? Hãy cùng FUNDGO tìm hiểu trong bài viết dưới đây.

Innovative Startup with Students as the Focus

Students are the backbone of the innovative startup ecosystem since they are not afraid of change and are highly adaptable to new trends and technological advancements. Therefore, it is crucial to educate students about the significance of innovative startups as well as stimulate their desire to start a business.

Digital Transformation: Change the Appearance of Vietnamese Education

Digital transformation in education and training has been around for a long time and actively utilized in the teaching and learning process all over the world, including in Vietnam. According to the National Digital Transformation Program approved by the Prime Minister on June 3, 2020, education is the second priority field for digital transformation after medicine. This demonstrates that education and digital transformation in the industry are critical to the country's development. So, what are the advantages of the digital transformation in education? How is the digital transformation in Vietnamese education? Let's find out in this article!

Should Blockchain Be Applied in Vietnamese Education?

When it comes to blockchain, most people usually think of Bitcoin, but in fact this technology has made great strides and created a lot of positive changes in other areas besides digital assets. Notably, blockchain is initially creating a revolution in the education industry in some countries around the world, especially at the university level. Should blockchain be applied in universities and colleges in Vietnam?

Metaverse – A Perfect Complement to the Real World

With the explosion of industry 4.0, Metaverse is becoming one of the most commonly mentioned concepts. According to experts, Metaverse will develop into a general trend in the future and will perfectly complement the real world.

Blockchain – a Potential Field for Technology Startups in Vietnam

In recent years, blockchain has made positive changes and created a prominent trend in Vietnam. With disruptive and diverse applications, blockchain is considered a fertile ground for technology startups and the startup ecosystem in our country. So how has blockchain made a difference in economic development?