How USAID Is Supporting the Digital Transformation of Businesses in Vietnam

“These tools from USAID allow us to explore innovative business models,” said Mr. Kha.

Small and medium enterprises (SME) in Vietnam were hit hard by the economic effects of the COVID-19 pandemic, and TOMECO An Khang was no exception. Founded in 1993, the business grew from a mechanical repair workshop to a successful producer of industrial environment and agricultural machinery. The impact of the pandemic on supply chains in 2020 drove revenue down by more than 24% and Mr. Kha, TOMECO’s Chairman, needed to find a way to bounce back and ensure job security for its 150 employees.

One strategy was to make the company more efficient through the incorporation of computer-based technologies into products and processes. But Mr. Kha was hesitant, earlier attempts at fast-forwarding information technology had proved disappointing.

“In the past we invested nearly $26,000 to buy software to improve our production,” Mr. Kha said. “But we found that the software was not as effective as we expected due to our inexperience with digital tools.”

He was inspired to recommit to the digital transformation of his company at a workshop co-hosted by USAID and Vietnam’s Ministry of Planning and Investment on the resources available to SMEs in Vietnam to accelerate their digital transformation. Mr. Kha registered for one-on-one support from USAID’s Linkages for Small and Medium Enterprises project to learn how TOMECO could develop and implement a comprehensive digital transformation roadmap.

Mr. Kha talking to a worker in the office

Through this assistance, TOMECO reviewed its production and operational systems, detecting areas that needed improvement and developed an action plan. This resulted in the launching of a customer relationship management system, improving the company’s engagement with and tracking of customers. USAID also assisted TOMECO in the implementation of a new barcode system and tracking software to monitor products through the production and sales process.

TOMECO is currently in the process of adopting a master data management system to speed up its decision-making process and a state-of-the-art cyber security system to mitigate information risks and vulnerabilities.

Businesses in Vietnam can struggle to envision the benefits of digital transformation, but now they can look to TOMECO as a champion of change, and be inspired to adopt digital tools. TOMECO, its employees, and its customers have benefitted from these improvements and the company is moving forward prepared to seize new market opportunities.