What is Digital Transformation and how important is it in this day and age?
Digital transformation is one of the top concerns of technology businesses in Vietnam. The Government of Vietnam is also particularly interested in the issue of digital transformation during the Industrial Revolution 4.0 and assigned the Ministry of Information and Communications to develop a National Digital Transformation Plan and submit it to the Prime Minister right in 2019.
So what is digital transformation and how important is it in the Industrial Revolution 4.0?
What is Digital transformation?
It is difficult to get a clear and specific definition of Digital Transformation, because the process of applying Digital Transformation will be different in each different field.
However, for a concise and easy-to-understand definition, digital transformation is the integration of digital technologies into all areas of a business, taking advantage of technology to fundamentally change the way operations, business models and provide new values to customers of that business as well as accelerate business activities. Digital transformation is also a change in the culture of businesses, requiring businesses to constantly change, test new things and comfortably accept failures.
In Vietnam, the concept of "digital transformation" is often understood in the sense that the process of changing from a traditional enterprise model to a digital enterprise by applying new technologies such as Big Data, Internet for all things (IoT), cloud computing (Cloud) ... in order to change the way of operating, leadership, working processes, corporate culture.
Not only plays an important role in businesses, but digital transformation also plays an important role in other areas of society such as government, mass media, medicine, science ...
"Digital Transformation" can easily be confused with the concept of "Digitization" (Digitizing). To distinguish these two concepts, it can be understood that "Digitization" is the process of modernizing, converting conventional systems into digital systems (such as converting from paper documents to above soft files). computers, digital television transfers from analog to digital broadcast ...); meanwhile, "digital transformation" is to exploit the data obtained from the digitization process, and then apply technologies to analyze, transform those data and create newer values. "Digitalization" can be considered as part of the "Digital Transformation" process
Why is "Digital Transformation" important and what are the benefits?
Reports of major market research companies such as Gartner, IDC ... all show that digital transformation actually brings a lot of benefits to all aspects of the business: from executive management to research. , business…
The most recognizable benefits of digital transformation for businesses are reduced operating costs, longer access to more customers, and faster and more accurate decision-making by the system. timely and consistent reporting system, optimizing employee productivity ... these things help increase operational efficiency and improve the competitiveness of organizations and businesses.
Meanwhile, for ordinary people, digital transformation changes the way we live, work and trade with each other. As for the state, digital transformation uses data and digital technologies to change user experience with state-provided services, change business processes, change the model and mode of operation of state management agencies.
Digital transformation also contributes to increased labor productivity. Microsoft research shows that in 2017, the impact of digital transformation on labor productivity growth is about 15%, by 2020, this figure is 21%.
In general, according to market research and analysis experts, the 5 final goals that digital transformation businesses are aiming to include: Speed up the market; Strengthening competitive position in the market; Promote revenue growth; Increase employee productivity; Expand the ability to attract and retain customers
How is digital transformation taking place in the world?
Digital transformation is increasingly changing the perception of leaders who have the ability to determine the direction and ability to transform successfully of an organization. The government apparatus of many countries, having realized the importance of digital transformation in increasing operational efficiency and ensuring national security, immediately entered a new "race" for adoption. number converter.
In the past, old-fashioned technologies only had large companies, with lots of strong economic potential, to access that technology. Therefore they are always market leaders, at least a few steps. But now, whether small companies or new startups can access technology that is not inferior to those of large companies.
According to a 2017 study by Microsoft in the Asia Pacific region, in 2017, the impact that digital transformation has on GDP is about 6%, in 2019 it is 25% and in 2021 it is 60%.
McKensey's research results show that, by 2025, the impact of digital transformation on US GDP will be about 25%, with Brazil being 35%, and in Europe, about 36%. . From this, it can be seen that the possibility of the impact of digital transformation on GDP growth is very large.
The speed of digital transformation in regions and countries is different, depending on the level of technology development and the speed of business model transformation. In which Europe is considered the region with the fastest Digital Transformation speed, followed by the United States and the country in Asia.