NResearch analyzes the factors that affect the ability to make the switch number in the small and medium business, pointing out the opportunity, potential, as well as the barriers and challenges; then to propose practical solutions to promote the conversion of sustainability in this business sector..
Convert numbers are becoming an inevitable trend in the context of the global economy increasingly digitized. For the small and medium enterprises (SMEs) in Vietnam, the group accounted for more than 97% of the total number of enterprises, number conversion not only is the opportunity to enhance competitiveness, but also is required for survival in a post-pandemic Covid-19, and deeper integration. However, the process of deployment convert numbers in SMEs still face many challenges. The article analyzes the factors that affect the ability to perform conversion of in SMEs from the perspective of management, pointed out the opportunity, potential, as well as the barriers and challenges; then to propose practical solutions to promote the conversion of sustainability in this business sector.
PROBLEM SET
Convert numbers has become a motivation essential to promote economic growth, improve operational efficiency and improve competitiveness of business in the digital era. In Vietnam, The government has shown strong determination in promoting the transition of through “the Program switch the number of countries to 2025, with orientations toward 2030” (Decision no. 749/QD-TTg of June 03/6/2020), which defines the business is one of the 3 key pillars beside digital government and social number. However, the level of participation and deployment convert numbers between business groups are uneven markedly, especially for the SMEs.
According to the report, White Books Business Vietnam 2022, SMEs account for about 97% of the total number of enterprises active in Vietnam, contributing more than 45% of GDP and create over 60% of the employment for social (MPI, 2022). Although has an important role as such, but SMEs are still facing a series of hurdles in the transition number. Common difficulties include: restrictions on capital investment, technology, capacity management is weak, manpower shortage of qualified information technology and lack of strategy digitized clear (Nguyen, 2023). Reality shows, the majority of SMEs only new approaches to convert numbers at the level of municipalities, mainly used accounting software, sales or other social networking platforms serve marketing, instead make digitized comprehensive operational processes, or business models (VCCI, 2023). Besides, the survey by Deloitte (2023) at the South East Asian region showed that the SMEs in Vietnam lag significantly compared to the business with scale in Singapore, Malaysia or Thailand in the application of technology such as AI, IoT, cloud computing and data analysis. This suggests not only a matter of perception, but also related to institutional support, incentives, technology, as well as the connection between the enterprise and ecosystem innovation in the country.
Transition of not merely apply technology, which is the process of change overall from strategic thinking, business model to the organizational structure and corporate culture. Therefore, understanding the factors that affect the ability to deploy convert the number of SMEs is very necessary. The research results not only bring meaning argument in the consolidation framework for analyzing the factors that affect the switch number, which also contributed practices for policy makers, institutions to support businesses and themselves the SMEs in the construction of the strategy and roadmap of goods more efficient in the future.
THEORETICAL BASIS
The concept of conversion of
Convert numbers to be understood as the process of integrating digital technology into all aspects of the business in order to create fundamental changes in the way organizations operate and create value for customers (Vial, 2019). Other than the process of digitizing (digitization) is the conversion of physical data to digital and automation (automation) is the application of technology to reduce the manual labor, convert numbers imply the change of strategy, organizational culture and business model (Bharadwaj, 2013).
In the context of global competition is getting fiercer and expectations of customers change quickly convert numbers no longer an option, which is the condition of survival for the enterprises, including SMEs. However, the ability to successfully implement the switch number is influenced by many internal factors, and in particular in the context of resources of SMEs is still limited.
The factors that affect the ability to convert numbers in SMEs business
- Leadership and commitment strategy
Commitment and vision of leadership plays a central role in the transition number. Leadership is people-oriented strategy, allocate resources and build organizational culture consistent with the thinking of (Westerman et al, 2014). For SMEs, where leaders often at the same time as founders, they accept change and long-term investment is a vital element (Matarazzo et 2021).
- Technology infrastructure and information systems
Technology infrastructure includes hardware, software, systems, network and data platform. The lack of platform technology, stable and flexible that many SMEs difficulty scaling to convert numbers (Li, 2023). In addition, the ability to integrate systems and ensure security network is 2-factor technique is especially important.
- Human resources and skills of
The shortage of skills, the number in the labor force is one of the biggest barriers for SMEs. Important skills include: data analysis, operating platform of skills and learning new technologies (Al-Omoush, 2022). The business lack of strategic capacity development of internal usually can’t maintain conversion results of long-term.
- Organizational culture and the ability to adapt
A culture of openness, encouraged to experiment and take risks is the foundation to transition success. Businesses are structured in rigid spanking ti order too big or fear of change often fail when put into the new technology paradigm (Vial, 2019). Culture of continuous learning, thinking, customer-oriented and innovation are seen as the pillars are important for the conversion of.
- The level of support from the ecosystem outside
Eco-system outer covering of the external agent business, play the role of support or hinder the transition number. Can divide this group into 4 specific factors as follows:
Public policy and legal framework: The assistance program of the state such as the Program Switch the number of national (2020), Fund technology innovation, or the tax incentives for business innovation can be an important impetus for SMEs conversion number. However, the popularity and accessibility to the fact of these policies is still limited (Nguyen and Le, 2022).
Partner network technology: The solution provider technology (vendor), expert advice and startup technology are resources to help SMEs choose, deploy and operate solutions to convert numbers. The lack of tightly linked to the side, this makes SMEs, self groping, deploy discrete and easy-to-failure (Li et 2023).
Intermediary organizations support business: includes associations, business center, startups and financial institutions to support SMEs. This is the place to provide resources, training, market information and connectivity technology. The uneven development between the region in which business in the local disadvantage (Nguyen, 2023).
The pressure of competition from the market: the Level of competition and the increasing requirements of the customers as well as motivation for business to make the switch. The industry such as logistics, retail, financial, etc. are being forced to change quickly to meet the market demand. SMEs active in the industry is highly competitive, tend to convert more soon.
OPPORTUNITIES AND CHALLENGES IN THE TRANSITION OF SMEs
The opportunity, potential
Transition number in the SMEs have the opportunity and the potential for certain. Specific:
Policy support from The government and organizations
The government of Vietnam has issued many policies to support SMEs in the transition number, such as “the Program Switch the number of countries to 2025, with orientations toward 2030”. In addition, international organizations such as GIZ, USAID, JICA also coordinate with the ministries and departments to implement programs to support business number conversion, including: training, consulting, and technology support.
The development of technology infrastructure and services of
The rapid development of technology infrastructure, such as 5G network, cloud and other digital platforms, create favorable conditions for SMEs approach and deploy technology solutions at a reasonable cost. In addition, the increase of the provider technology services in the country also helps SMEs easily search for suitable partners.
The consumer market of goods and new business trends
The change in consumer behavior, with the trend of online shopping and the use of digital services, creating opportunities for SMEs to expand the market and reach new customers through the channel numbers. The application of the platform, ecommerce, social networks and mobile apps to help businesses enhance customer experience and increase revenue.
The ability to improve productivity and operational efficiency
Convert numbers to help SMEs process optimization, production management, and business, thereby improving employee productivity and operational efficiency. The application of the system of modern management such as ERP, CRM, and analytics tools help data business decisions quickly and more accurately.
Opportunity to collaborate and learn from other business pioneer
Participation in the network business, association, industry, and the program supports conversion of SMEs have the opportunity to learn from the experiences of pioneering enterprise, approaching the solution the right technology and get support from experts in the field.
Barriers, challenges
Besides the opportunity, potential, transition number in the SMEs face many challenges. Specific:
Financial constraints and investment resources
One of the biggest barriers for SMEs in Vietnam in transition number is financial constraints. The investment in technology infrastructure, management software, and personnel training entails significant costs, which many SMEs cannot afford to pay. According to the survey of the Ministry of planning and investment (2023), many SMEs said that the high investment costs for technology is one of the main reasons why they slowly deployed switch number.
Deficiency of high-quality human resources and skills of
Human resources have the skill number is the key element in the transition number. However, many SMEs have difficulty in recruiting and retaining qualified staff, information technology and numerical skills required. In addition, the re-training current employees to adapt to new technology is also a big challenge. According to the report of the Department of Business development, Ministry of planning and investment (2023), shortage of technical manpower is one of the main difficulties that SMEs face when deploying switch number.
Lack of strategy and roadmap for the transformation of clear
Many SMEs have not yet been established strategy and roadmap specific to the transition number. The lack of clear direction leading to the deployment of technology solutions in a discrete way, inefficient and asynchronous. A number of SMEs does not identify the migration path of fit leads to difficulties in the application of technology in an optimal way.
Limited awareness and understanding of the conversion of
Although the concept of number conversion has become popular, but many businesses have yet to understand the nature and benefits of it. Some businesses only considered to number conversion is the application of information technology in a number of certain activities, which has not yet aware that it is a process of comprehensive change, business models and governance. According to the representative Association of Women entrepreneurs in Vietnam, many businesses do not understand, how is the switch number, which led to the investment solutions does not bring effective (Knit Stick, 2024).
Difficulties in the selection and deployment of appropriate technology
With the variety of technology solutions on the market, SMEs often have difficulty in choosing the right technology to scale and peculiarities of their activities. The lack of information and expert knowledge makes business easy to fall into a state of “astray” in the selection process and technology deployment. According to an expert in the field of conversion of the “fret” often of the SMEs is choosing the right platform to convert numbers match, because if you choose the consultant does not fit lead to loss of time and money (Process, 2023).
Cultural barriers and habits, traditional business
Change your habits and culture business is one of the major challenges in the transition number. Many businesses still maintain business methods traditional afraid to change and are not willing to accept risks from the application of new technology. According to the survey of the Ministry of planning and investment (2023), 52,3% of businesses said that the difficulty in changing habits, business practices is the major hurdle Monday that they have difficulty in switching numbers.
PROPOSED SOLUTION
To overcome the barriers, challenges, promote the conversion of sustainable, in the coming time, the SMEs need to perform the following solutions:
- One is developing transition strategies of matching numbers in each stage
Enterprises need to build a roadmap to convert numbers according to specific stages, from upgrading infrastructure technologies, applications and basic tools (such as ERP, CRM, accounting software), to step by step integrated enhanced technologies (AI, big data, IoT). Pattern “conversion of the minimum viable” (Minimum Viable Digital Transformation) should be applied to help business save cost but still effective (Li, 2023).
2. Second, investment in training and skills development of staff
Conversion of success depends on the internal capacity. Businesses need to implement training programs periodically about the skills, information technology, safety data, thinking of for staff and management. Can cooperate with universities, research institutes or the training platform online to the optimal cost.
3. Thirdly, strengthen the connection with ecosystem conversion of
Businesses need to actively participate in the support network such as the center for innovation, the association industry and the program switch the number of provincial/city. The cooperation with the technology provider prestigious help SMEs avoid mistakes in choosing solutions, at the same time quick access to the technology appropriate to the specific industry.
4. Four is, make use of the policies and programs of government support
SMEs should actively learn and sign up to join the program as “Support SMEs convert numbers” by the Ministry of planning and investment development from 2021. Incentives, credit, tax relief, support, technical consulting… is available, but little is tapped due to lack of information and capacity approach (Nguyen and Le, 2022). The local time should also be added the officer in charge to help businesses reach more effective these policies.
5. The year is change, thought leadership and organizational culture
Business leaders need to accept change, willing to experiment and create environment that encourages innovation. Organizational culture, flexibility, rapid response to change will be the foundation to the conversion of sustainability. Can learn from the model of successful small business where the CEO directly involved in commissioning group technology and implementation to convert numbers from culture working group.
CONCLUSION
Conversion number, not the destination, which is a continuous process, requiring consistency and capacity to adapt. For SMEs in Vietnam, starting from the small solution, but in the right direction will create the foundation for the sustainable development in the long term. Government support organization and the business itself need to combine our efforts to turn the switch of the motivation actually promote innovation and productivity countries./.
