Investment cost, high-tech application and reticence in changing habits are the top barriers for many Vietnamese small-and medium-sized enterprises to embark on digital transformation.

Digital transformation becomes an urgent need for businesses to innovate. Photo: BIDV

The finding was released in the annual report on business transformation 2021, which was conducted by the Department of Business Development under the Ministry of Planning and Investment in collaboration with the USAID LinkSME Project.

According to the survey, 60% of the total 1,300 businesses participating in the survey recognized the barriers when applying digital technology and the reason came from the pandemic impacts that shrink businesses’ revenue which in turn affect investment cost, the deployment, and maintenance of solutions for digital transformation, the authors of the survey noted.

Le Manh Hung, Director of the Enterprise Development Agency, said Covid-19 has taken a heavy toll on businesses and their digital transformation. 

“Digital transformation becomes an urgent need for the local businesses to innovate their business, gradually transform business models on digital platforms, seek more markets, cut costs, improve operational efficiency,” he added.

Reticence in changing business habits and practices was considered the second biggest barrier for businesses, recognized by 52.3% of surveyed enterprises. Digital transformation will change the habits and ways of working of their employees.

Even when some businesses have applied the software, their employees either reluctantly use it or refuse it. This makes the enterprise's digital transformation goal unattainable.

The survey also revealed about 14.7% of surveyed businesses were concerned about data leakage and security issues when using technology solutions.

The survey results also showed that of the businesses starting the process of digital transformation, 57% look for online marketing solutions, 53.7% need solutions on digital collaboration, which is followed by digital transaction solutions (43%) and network and data infrastructure (39.6%).

Of the businesses that are growing and need digital transformation to accelerate, 63.5% said they want solutions for big data and data warehouses.

For the group of exporters, 43.9% need support for cross-border e-commerce platforms such as instructions on creating and maintaining accounts, building business models, sales, marketing, and transportation.

In addition, more than 70% of businesses also want to be supported with solutions for transportation, warehousing, cross-border logistics, or payment.