What are digital transformation and digitization in business? The importance of this topic in the 4.0 era
The fourth industrial revolution (Industry 4.0) is a journey with breakthroughs of digital technologies leading to the intelligentization of all aspects of society. Digital transformation is the way to go in the development stage of the Industry 4.0, and it is an invaluable opportunity to develop the country.
Digital Transformation (Digital Transformation) is a concept born in the booming internet era, which has become popular in recent times, describing the application of digital technology (digitalize) to all aspects of businesses. If effective, this activity will completely change (transformation) the way an enterprise operates, increase cooperation efficiency, optimize work performance and bring value to customers.
In today's social era, we are almost no strangers to the phrase "digital transformation. With the success of the 4th industrial revolution, digital transformation is now an inevitable trend, a matter of survival for countries, organizations, businesses, and consumers around the world. Considerable changes in labor productivity, user experience, and new business models are being formed, showing the significant role and impact in today's social life of digital transformation. Affects every industry, such as industry, agriculture, commerce, and business services."
1. WHAT IS DIGITAL TRANSFORMATION & DIGITALIZATION?
It is difficult to have a clear and specific definition of digital transformation because the process of applying digital transformation will differ in each field.
According to Gartner Information Technology Research and Consulting Company, digital transformation is the application of technology in changing an enterprise's business model, creating more opportunities and new values, and helping businesses increase their business value. As a result, it accelerates growth and achieves better sales.
According to Microsoft, digital transformation is the restructuring of thinking in coordinating data, processes, and people to create new values.
Experts discuss Digital Transformation, Digital Economy, Industrial Revolution 4.0, etc. "According to the fortuneteller's way of seeing an elephant, he caught the tail and said it was AI AI (artificial intelligence), he touched the ear told Big Data (big data), he touched his feet and said Cloud Computing (Cloud computing), he touched where he didn't know but had a lot of hair and shouted that Internet of Things (Internet of things) so much Well, he was calmer when he saw the elephant walking on his own, so he guessed it was Automation." Automation (automation)
Combining the above ways of thinking can define digital transformation in an easy-to-understand and concise way as follows:
- Digital Transformation is the full integration of digital technologies into all areas of an enterprise, applying technologies to change the way it operates, its business model, and it's delivery. New value for your customers.
- Digital transformation is also a change in corporate culture, requiring businesses to constantly update, change with new things, and freely accept failures.
- For Vietnam, "digital transformation" is also understood as changing the business model from traditional to digital. Based on new technology applications (Bigdata), Internet of Things (IoT), cloud computing (Cloud)…. Change the operating method, leadership, implementation process, and enterprise culture.
- Not only does digital transformation play an important role in businesses, but digital transformation also plays a vital role in many other areas of society, such as government, scientific medicine, mass communication, etc.
“DIGITAL TRANSFORMATION(Digital Transformation) can easily be confused withDigitizing". To distinguish these two concepts, it can be understood that "Digitalization" is the process of modernizing and converting conventional systems to digital systems (such as switching from paper documents to soft files on the Internet). Computers, digitizing television, switching from analog to digital broadcasting, etc.).
Meanwhile, "Digital Transformation" is about exploiting the data obtained from the digitization process and then applying technologies to analyze and transform that data and create new values. "Therefore, Digitalization" can be considered part of the "Digital Transformation" process.
2. WHY IMPORTANT DIGITAL TRANSFORMATION? AND WHAT BENEFITS IT IS?
Reports of major market research companies such as Gartner, IDC... all show that digital transformation really brings a lot of benefits to all aspects of business activities: from executive management to research, and business……
The most recognizable benefits of digital transformation for businesses are cutting operating costs, reaching more customers in the longer term, leading faster and more accurate decision making thanks to the system. timely and transparent reporting system, optimizing employee productivity... these things help increase operational efficiency and improve the competitiveness of organizations and businesses.
Digital transformation also contributes to increasing labor productivity. Research of Microsoft shows that, in 2017, the impact of digital transformation on labor productivity growth was about 15%, by 2020, this figure will be 21%.
Digital transformation brings many benefits to mainstream coverage, businesses, and users' lives.
2.1 For the Government
"Transforming the argument using data and digital technology systems to change the user experience with public services provided by the State. Changing the technology system also changes the state apparatus's business, model, and mode of operation.
Digital transformation is also gradually changing the perception of leaders, heads of countries, and organizations capable of determining the direction and success of governments and organizations. Countries worldwide have invested a lot in information technology infrastructure systems to serve the digital transformation process before the benefits it brings. Governments of different countries gradually apply digital transformation to construct a "Digital State”, “e-Government". At the same time, many measures are also proposed to support and encourage businesses to apply the achievements of digital transformation in their business operations. For activities aimed at ensuring national security, government apparatuses of many countries have immediately used digital transformation when realizing its importance.
Facing that trend, the Government of Vietnam is also gradually applying it to the management and construction of e-government, with policies and laws being revised to have a legal system in line with current trends. Now. In addition, the Government of Vietnam also encourages industries/professions and businesses to apply digital transformation in all fields, such as the digital transformation of enterprises, the banking sector, the digital transformation in a lot of education, media work, etc.
However, the Government also needs to re-plan national digital transformation strategies appropriately and consistently to orient digital socio-economic development. On that basis, develop digital transformation strategies in each industry, each field, each enterprise, etc., to ensure the process of industrialization, transformation, and economic restructuring, in which agencies, State - enterprises - universities, and research institutes play a pivotal role."
2.2 For the Business
It can be seen that digital transformation brings many benefits to businesses, such as:
- Narrowing the gap between departments in the enterprise: When applying the digital transformation, the information linkage between departments in the enterprise is connected to a homogeneous technology system platform. Each department has its software to serve professional operations but can still communicate with other departments through the internal communication system. This will help the problems arising in the business be solved as soon as they happen, allowing the operation of the industry not to be blocked for unknown reasons, causing destructive impacts on the company, such as Customers being delayed, sales volume being reduced, etc.
- Increase transparency and efficiency in the corporate governance system: Participating in the digital transformation process, the CEO of the enterprise will be able to proactively and easily access reports on the business's activities. All business activities, such as staff recording sales, personnel changes, and customers finding out about products, will be shown on business management software; this will help reduce delays and help The CEO manages the business more effectively and transparently than before.
- Optimizing employee productivity: Digital transformation will help businesses maximize the working capacity of employees in the company. Because of low-value-added jobs, the system can automatically perform without needing to pay employees' salaries. It also helps employees have more time to improve their expertise and professionalism. Perform other essential tasks. Digital transformation also makes it easier for managers to assess the quality of each employee's work through report data received at the end of the day, at the end of the week, at the end of the month, or at the end of the quarter.
- Enhance competitiveness: If businesses own a digital platform, they can deploy and operate enterprises efficiently, accurately, and with quality because digital management and operation solutions will increase efficiency and accuracy in business decisions.
At the same time, digital transformation helps businesses improve their competitiveness with other companies in quickly interacting with customers, customer care and service policies, etc.
The most recognizable benefits of digital transformation for businesses are reducing operating costs, reaching customers in the long run, leaders quickly reporting on time, and optimizing business work productivity. employees… These things increase the efficiency and the organization's competitiveness; the company is enhanced.
