Slow digital transformation might mean bankruptcy for small-scaled businesses

SGGP

Covid-19 pandemic has been negatively affecting business activities and retarding the digital transformation process in several small- and middle-scaled enterprises. However, an effort of speeding up this necessary process might prevent them from possible bankruptcy in the future.

Slow digital transformation might mean bankruptcy for small-scaled businesses

Dr. Nguyen Quang Trung from the Business and Administration Department of RMIT University firmly stated that digital transformation is vital to almost all businesses in this Industry 4.0 era.

The digital transformation process normally takes place under the two forms of implementing digital technologies into the existing business model or completely reforming the operation model and business structure.

Dr. Trung shared that even though digital transformation has appeared in the world for over 10 years, most companies choose the form as a situational solution only.

A recent research co-conducted by RMIT University experts and KPMG Audit Co. reveals that foreign-invested enterprises and large private corporations in Vietnam are going through this process smoothly. Sadly, state businesses and small- and middle-scaled enterprises are just at the beginning stage.

Adding to this tardiness are the adverse effects of Covid-19 pandemic on business activities, creating several challenges in administration performance.

Finally, among small- and middle-scaled enterprises, there are always obstacles from weak competitiveness ability, low creativity, difficulties in approaching capital sources, and high overhead cost.

“These issues might lead to even more trouble if each business and the Government do not apply suitable policies to tackle”, said Dr. Trung.

He firmly stated that implementing digital technologies is unavoidable if enterprises want to maintain their operation in this Industry 4.0, and this should be done as soon as possible.

Even in this harsh time, there are more and more novel business models related to digital technologies appearing worldwide. Admittedly, various kinds of trouble are preventing many companies from carrying out the digital transformation process. However, worse than the pandemic itself, slowness in applying these new models would no doubt lead many small businesses to bankruptcy.

By Tran Luu – Translated by Thanh Tam

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