Digital transformation still challenging for enterprises

Despite the need for digital transformation at enterprises being significant, a survey by the US Agency for International Development’s Linkages for Small and Medium Enterprises project (USAID LinkSME) and the Ministry of Planning and Investment (MPI) shows that businesses still face a host of barriers in applying digital technology.

Some 60.1 per cent of survey respondents said they have difficulties applying digital technology due to the high cost of investment and implementation.

This is partly due to the impact of Covid-19, which cut into revenue and resulted in a shortage of capital, thus affecting investment, implementation, and maintenance costs for digital transformation solutions, the report pointed out.

In addition, problems in changing business practices are also a major barrier, as reported by 52.3 per cent of respondents.

Enterprises do recognize that digitalization will change habits and ways of working for employees. Some have introduced new software, but employees do not use them or only partially use them, with digital transformation goals falling by the wayside as a result.

Analysts from USAID LinkSME and the MPI also found that enterprises of different sizes face barriers to varying degrees.

But, in general, micro and small enterprises with limited financial potential face the most difficulties in terms of investment cost and technological application.

Meanwhile, medium and large enterprises with better financial resources face the most barriers in terms of changing business practices.

“This is partly because medium and large-sized enterprises have more complex processes than small and micro enterprises, so it will be more difficult to adapt to change,” the report assessed.