Best effective stages of digital transformation for businesses​

What is digital transformation?

Digital transformation refers to the application of digital technology such as cloud computing, big data, etc. into all activities of businesses. The purpose is to achieve high performance, thereby enhancing revenue and brand identity.

Business digital transformation is not simply the transformation of the working method from manual (recording in books, face-to-face meetings, etc.) to automated technology to reduce human effort. In fact, digital transformation is about changing business thinking, operating methods, organizational culture, etc.

Digital transformation plays a key role in business activities

Gaining more and more popularity is the current status of digital transformation in Vietnam. In particular, the impact of Covid-19 has led to 92% of businesses considering digital transformation. In fact, many businesses have applied digital transformation to their business activities.

However, most Vietnamese businesses are small and medium. They tend to lack a deep understanding of digital transformation and get confused about where to start. Many businesses have mistakenly that they have completed the transformation roadmap while only partially applying the technology. The actual number of businesses that successfully implement digital transformation is just less than 10%.

3 Stages of digital transformation for businesses

Understanding the digital transformation concept but wondering how to apply it? Consider the 3 stages of digital transformation below.

Stage 1: Digitization - Digitizing information

The first of the 3 stages of digital transformation is the digitization of information. Information digitization means the process of converting data from physical (analog) to digital form. Simply, it is about scanning documents and information in paper form to store on computer systems or electronic files such as Excel or PDF.

In this way, business data will be gathered and stored centrally for an easier lookup process. Because of the small data, small and medium enterprises are quite suitable for information digitization. This phase serves as the foundation for taking the next steps in the digital transformation journey.

3 stages of digital transformation

Practical examples:

Paper documents will be converted to electronic files on popular online platforms such as Google Drive or Microsoft 365. Therefore, businesses can conveniently share documents for easy use and quick search.

Advice for businesses:

The first important stage among all the digital transformation stages is information digitization. Businesses should determine the roadmap early and implement it seriously to well perform at this stage.

Stage 2: Digitalization - Digitizing the process

The next stage after completing the digitization of information is digitizing the process. It is about the application of technology to automate existing processes. This not only helps businesses reduce operating costs but also increases business efficiency.

At this stage, businesses can improve ineffective existing operational processes thanks to digital analytics. Businesses can also exploit modern technologies to apply to business operations.

Stage of process digitization

Practical examples:

Good examples of digital transformation for this stage are electronic signatures, electronic contracts, etc. These have become more popular during the epidemic period. Despite social distancing, businesses can normally function these operations with automated processes

Advice for businesses:

Process digitization is beneficial but only partial. This is not a comprehensive digital transformation. Businesses should refer to solutions for a comprehensive digital transformation to achieve maximum value.

Stage 3: Digital Transformation - Comprehensive digitization

The final stage among stages of digital transformation is comprehensive digitization, also known as digital transformation. This is a fundamental change in technology and thinking. The stages will create breakthroughs and total transformations in the process in the micro and macro environment. The benefits of comprehensive digitization will relate to all parties including businesses, partners, and customers.

A digital transformation strategy must be consistent with the business strategy to achieve success. In the period of comprehensive digitization, businesses must create a revolution in business operations, technology, and people. This is a condition for the breakthrough in the journey of digital transformation.

Digital transformation is a concern for most businesses. However, only large businesses with a long-term vision seriously pursue the digital transformation process. Indeed, their aim is long-term goals and sustainable development.

Comprehensive digitization process

Practical examples:

A practical example of successful digital transformation is the story of the retail giant Amazon. This is the worldwide most popular e-commerce platform. Starting with an online book-selling service in 1995, Amazon has continued to research and apply modern technology. These modern business technologies include Amazon Web Services and cloud computing services.

With the continuous development of technology, Amazon has become the third company in the world to reach a market capitalization of 1 trillion USD. The company also became a market leader in some of its businesses in September 2020.

Advice for businesses:

Businesses need a long-term plan for the digital transformation roadmap. Not only applying technology to improve operational efficiency but also integrating it with business goals. Businesses need to consider numerous factors to successfully implement digital transformation.

• The will of the leader in promoting digital transformation.
• The participation of all departments and units on the value chain.
• The needed resources for digital transformation.

5 Effective steps for the digital transformation of businesses

Many businesses in Vietnam are still struggling to find methods to implement effective digital transformation. Here are 5 effective steps to take for businesses to solve the issue of digital transformation.

Step 1: Define strategic orientation

Businesses need to accurately define their business strategy and digital transformation strategy at this step. This ensures the digital transformation roadmap of the business goes on the right track.

Step 2: Assess the current condition of the business

Businesses need to assess their actual situation related to all aspects of finance, human resources, technology, and culture. This helps businesses understand their strength to build appropriate solutions in production and business activities.

5 steps to effective digital conversion 

Step 3: Estimate the investment budget

Businesses should well estimate the investment budget for the journey of digital transformation to be more proactive. Businesses will know which option is most suitable for their current situation.

Step 4: Build a digital transformation roadmap and determine the actions to take as well as the necessary human resources

The step is when businesses need to plan their digital transformation roadmap. Businesses will determine the needed activities, the required human resources, the time for completion, and the expected results. This helps minimize time, effort, and budget in the implementation.

Step 5: Implement and evaluate the effectiveness

The last step is to proceed as planned. An effective evaluation will help the business eliminate unwanted factors. Businesses should identify risks and changes that negatively affect the implementation of digital transformation. This is when businesses can make appropriate improvements.