Technology offers solutions for SME growth

Small and medium-sized enterprises (SMEs) in Vietnam have set their sights on leveraging external technology providers as a way of accelerating their digital ambitions, according to TDCX’s latest report.

SMEs are looking to tech providers such as cloud providers, system integrators, cybersecurity specialists, and digital platforms for the expertise they require as they grow their business.

According to the report, Vietnam’s digital economy has grown rapidly as the country embraces technology. Its digital economy is expected to reach $57 billion in 2025, ranking it second in Southeast Asia, with annual growth of 29 per cent. Vietnam’s SMEs, which make up about 97 per cent of the country’s enterprises, play a vital role in realizing this growth.

However, the study found that three in four (75 per cent) of Vietnam’s SMEs have either only just started on their digitalization journey or only digitalized a few functions across their business. This is slightly higher than the ASEAN average of 70 per cent.

Mr. Laurent Junique, CEO of TDCX, said that, post-pandemic, SMEs have fully come around to the benefits of going digital. “What was once a nice-to-have is now a must-have, and SMEs are making up for lost time by tapping the expertise of tech providers,” he added. “Hence, the time is also ripe for tech providers to engage with SMEs to support their digital transformation.”

Vietnam’s SMEs have recognized the need to digitalize and are taking steps to bridge the gap. The study found that their top priority over the next two years is to enhance their data analytics and innovation capabilities. To support their digitalization push, Vietnam’s SMEs are looking to work with tech providers that have strong technical skills (82 per cent), industry knowledge (67 per cent), and speedy response times (45 per cent).

In addition to improving their data analytics and innovation capabilities, Vietnam’s SMEs are focused on transforming their traditional business model to an e-commerce enabled model (75 per cent) and digitalizing operations such as sales and marketing and customer relationship management (63 per cent) in the next two years.

However, they continue to grapple with a host of challenges. These include advisory and consultation on technology adoption (79 per cent), access to knowledge and expertise (65 per cent), training programs to reskill or upskill employees (61 per cent), and having the right connections with suitable service providers (53 per cent).