The Six Pillars of Digital Transformation Success

In the context of global best practices and Vietnam’s unique circumstances, this article highlights the critical factors contributing to successful business transformation.

1. Implement a 2-3 year cyclical transformation strategy

Geopolitical fluctuations, such as recent Trump administration policies, have impacted global supply chains and trade. Technological shifts and, more importantly, changes in consumer habits and expectations towards greener options, require businesses to seriously and promptly address their transformation strategies. According to our research, developing a transformation program with a 2–3 year cycle is a best practice adopted by many successful businesses worldwide.

This approach enables businesses to update and continuously adjust their transformation programs to align with market dynamics. The 2-3 year cycle also allows sufficient time for enterprises to execute and realize the benefits of each component program.

Through our consulting experience with numerous enterprises, we have observed that the Vietnamese business community is generally paying more attention to transformation and process improvement. However, a significant portion of these enterprises only undertake small-scale transformation projects and often stop after completing certain steps. Alternatively, they execute a one-time transformation project without plans for reassessment or continuous improvement, resulting in suboptimal outcomes.

The timeline for transformation projects depends on the scale and objectives of each enterprise. Some projects may span from 6 to 24 months, while larger-scale initiatives may require a longer duration to implement and achieve the desired results.

2. Agile and visionary leadership

A 2022 study conducted by EY and the University of Oxford’s Saïd Business School revealed that in effective transformation projects, 47% of respondents indicated that their leaders were receptive to ideas from lower-level employees, compared to only 29% in less successful transformations. Additionally, 52% of respondents in successful transformations believed that their leaders made decisions for the overall benefit of the organization rather than for personal or departmental gain.

The study underscores the importance of agile and visionary leadership in transformation initiatives. Flexible leaders help the entire organization understand the message and significance behind a transformation project and allocate the necessary resources to achieve the defined goals. Employees value the role of leadership and consider it a critical factor in the success or failure of a transformation project.

3. Put people at the core

In the same study, respondents involved in less successful transformations reported feeling unheard, anxious, insecure, and lacking necessary support during and after the transformation projects. Feelings of obsolescence and insecurity are common in companies undergoing significant transformations. A recent EY predictive model also showed that having mechanisms to address employees’ concerns and emotions increases the chances of a successful transformation project by 17%.

Therefore, establishing a system that encourages all employees to ask questions, share ideas, and seek clarification is crucial for a successful transformation. Leaders need to listen to their employees’ concerns and address them constructively. In other words, a successful transformation project should put its people at the core.

4. Leverage the power of digital technology

Digital transformation is a key driver and a significant contributor to enterprise success. Digital transformation projects enable businesses to deliver seamless customer experiences and enhance operational efficiency.

The 2022 EY-Parthenon Digital Investment Index Survey revealed that customers are at the heart of most enterprises’ digital transformation programs, with customer experience improvements showing the highest positive impact. More than half (55%) of the leaders surveyed believed that enhancing customer experience is an area positively impacted by their enterprise’s digital transformation initiatives. Digital transformation allows businesses to increase investments in customer journey touchpoints, enabling stronger connections with their clientele.

5. Treat data as a strategic asset

Successful transformed enterprises consider data a valuable asset and integrate robust cybersecurity measures to safeguard it effectively. As enterprises embrace digitalization, the risk of cyber-attacks increases, raising concerns about data regulation compliance and privacy. Therefore, in addition to building databases, enterprises must implement comprehensive data protection and privacy policies alongside cybersecurity solutions.

Since 2018, the European Union has enforced the General Data Protection Regulation (GDPR), mandating organizations to adhere to stringent data security and privacy standards for individuals. These regulations apply not only to companies within the EU but also to any organization handling data of EU citizens.

In recent years, many countries have enacted strict data protection laws to safeguard consumer rights and ensure information security. In Vietnam, several laws and decrees have been promulgated to protect personal data, such as the Law on Cybersecurity enacted in November 2015, the Law on Data enacted in November 2024, and Decree 13/2023/ND-CP enacted in April 2023, which together provide a legal framework for personal data protection. These regulations require organizations and businesses to be accountable for collecting, storing, and processing personal data and to inform users about how their data is used.

Notably, the Personal Data Protection Law draft is currently under discussion at the 9th session of the 15th National Assembly. If passed, it will complete the domestic legal system for personal data protection, providing a legal corridor for personal data protection work, promoting the legal use of personal data, and serving socio-economic development.

According to published information, Vietnam has witnessed a significant increase in cyber security incidents in recent years, including data breaches and cyber-attacks targeting businesses. These attacks not only cause financial losses but also damage the reputation and customer trust. Compliance with data security regulations is crucial to protecting customer personal information and mitigating the risk of cyber-attacks.

6. Invest in human capital development

EY has observed that successful transformed enterprises proactively address skill gaps to ensure their employees can effectively contribute to the enterprise’s transformation journey.

Transformation projects often involve adopting new technologies and processes. A skilled workforce is the cornerstone of any transformation effort. Investing in human capital development ensures that employees possess the necessary skills to utilize technology efficiently.

By investing in their people, organizations can foster a culture of continuous and flexible learning, enabling employees to embrace and adapt more quickly to new ways of working and flexibly respond to changing business environments.

In conclusion, successful enterprise transformation in Vietnam demands a balanced approach, combining global best practices with deep local insights. By focusing on structured transformation strategies, agile leadership, people-centric approaches, digital technology adoption, data governance, and human capital development, Vietnamese enterprises can better navigate the current market landscape and achieve sustainable growth.

Note to readers: The views expressed in this article are the author’s and do not necessarily reflect the views of the global EY organization or its member firms.

Author: Ms. Dao Thien Huong, Deputy General Director, Leader of EY-Parthenon Strategy Consulting Services, EY Vietnam Consulting JSC