FACTORS INFLUENCING SUCCESSFUL DIGITAL TRANSFORMATION AND THE IMPLICATIONS OF DATA SECURITY MANAGEMENT POLICY .... Thanks to technology and digital transformation, the Finance and Accoun
Aims of the study
Analyzing the impacts on the process of digital transformation in the Finance and Accounting sector, understanding the factors influencing successful digital transformation, and exploring the implications of data security management policies
From there, proposing solutions for businesses to achieve successful digital transformation.
Research method Error! Bookmark not defined 4 Structure of the study Error! Bookmark not defined
The essay is researched by a group of authors based on reality, with specific objects and combined with many different methods:
Methods of Analysis and Synthesis
Method of Induction and Interpretation
In addition to the introduction, conclusion, and references, the essay consists of three main chapters:
ANALYSIS OF THE IMPACTS OF THE DIGITAL TRANSFORMATION
Overview of Digital Transformation
According to Microsoft, digital transformation is a business innovation driven by the explosion of Artificial Intelligence (AI) and the Internet of Things (IoT), providing new methods to understand, manage, and transform business operations Digital transformation involves applying digital technology advancements such as cloud computing, big data, etc., to all organizational and business activities, aiming to achieve high efficiency, boost revenue growth, and enhance the brand
Digital transformation in the Finance- Accounting industry involves applying digital technology to accounting tasks such as big data, IoT, cloud computing, etc., to automate accounting processes, enabling quick and efficient deployment of accounting operations, improving efficiency, and reducing costs for businesses
1.1.2 Digital Transformation and its Urgency in the new era
Reports from major market research companies like Gartner and IDC have shown that digital transformation has brought significant benefits to all aspects of business operations, from management to research and sales
The most apparent benefit of digital transformation for businesses is cost reduction in operations, attracting more customers over the long term, and making faster and more accurate decisions through systems Timely, transparent reporting systems, optimized employee productivity, and all these factors help enhance operational efficiency and increase the competitive capacity of organizations and businesses
For individuals, digital transformation has changed the way of living, working, and conducting transactions For countries, digital transformation means using data and digital technology to change users' experience with services provided by the government, altering business processes and the methods of government operation
In summary, according to experts' analysis and market research, the five ultimate goals pursued by businesses in digital transformation include: accelerating time-to-market, strengthening competitive position in the market, driving revenue growth, increasing employee productivity, and expanding the ability to attract and retain customers
In this digital transformation, the financial- accounting field is one of the most profoundly impacted areas of the Fourth Industrial Revolution, especially in terms of the digitalization trend
Digital transformation in the financial- accounting field can be simply understood as applying digital technology to accounting tasks, enabling quick, efficient, optimized execution of accounting operations, and saving resources, time, and costs for businesses.
Overview of Digital Transformation if the Financial and Accounting Sector Error! Bookmark not defined 1.3 Analysis of VOS viewer on factors influencing the digital transformation process in the
From 2019 to 2021, due to the complex developments of the Covid-19 pandemic, our Party and State have issued many directives related to digital transformation to build a digital government, a digital economy, a digital society, and digital citizens According to the Department of Accounting and Auditing Supervision (Ministry of Finance), the assessment of the impact of the Fourth Industrial Revolution on the financial and accounting industry and the digital transformation process in this field shows that Vietnam is in the early stages However, surveys on the interest and understanding of professionals in the financial and accounting field regarding the impact of digital technology on their professions indicate a significant shift and change in mindset
Proactive engagement in digital transformation has helped the financial and accounting industry improve the quality and efficiency of financial and accounting management, administrative reforms, cost reduction, and convenience for citizens and businesses This has been highly appreciated by ministries, sectors, people, and businesses In practical applications, many financial and accounting enterprises have actively applied information technology to their work and business processes Currently, many digital technology applications have been implemented, such as electronic invoicing software, electronic accounting software, electronic sales software, electronic office software, etc In addition, businesses have allocated resources to invest in technology and human resource training to best serve their professional activities and service delivery
In state management activities, digital transformation in the financial and accounting sector is strongly emphasized by the Ministry of
Finance through the creation of a legal framework that encourages businesses to adopt digital technology The Development Strategy for the
Financial and Accounting Sector until 2030 reaffirms the orientation and goals of digital transformation: “Promote the appropriate application of information technology in the digital transformation process for the construction of legal frameworks and implementation in units; build databases related to finance and accounting to serve the activities of units and accounting and auditing management and supervision ”
For seven consecutive years, from 2013 to 2019, the Ministry of Finance and Accounting ranked first in the readiness index for the development and application of information technology (Vietnam ICT Index) among ministries and equivalent agencies Most recently, on August 8, 2022, at the 3rd meeting of the National Digital Transformation Committee, the Ministry of Information and Communications announced the results of the department-level and provincial-level digital transformation evaluation in 2021 (DTI 2021) In this evaluation, the Ministry of Finance and Accounting once again ranked first in the level of digital transformation in 2021 among the service- providing ministries This is also the second consecutive year that the Ministry of Finance and Accounting has led in digital transformation This achievement is the result of the persistent efforts of the entire financial and accounting industry in implementing the digital transformation strategy Until now, 100% of administrative procedures under the jurisdiction of the Ministry of Finance - Accounting and its subordinate units have been provided with online public services Currently, the Ministry of Finance - Accounting has 464 online public services at levels 3 and 4, achieving a nearly 60% rate Among them, the number of integrated level 3 and 4 online public services on the National Public Service Portal is 296, reaching a nearly 64% rate Over 99% of businesses nationwide have used electronic tax declaration, tax payment, and tax refund services The electronic invoice system,
Etax-Mobile, has also been implemented nationwide Recently, the Tax sector has launched a dedicated electronic information portal for foreign water providers to register, declare, and pay taxes, creating convenience, fairness, and transparency in tax registration, declaration, and payment according to international tax management trends
It is expected that in the future, the Tax sector will continue to integrate data from domestic e- commerce platforms into its operations
In the customs field, 100% of basic customs procedures have been automated, and 100% of customs departments and customs branches carry out electronic customs procedures with 99.65% of participating businesses Consequently, customs declaration, information reception, processing, and customs clearance decision-making are highly automated, with customs dossier processing time taking only 1-3 seconds These significant reforms have facilitated import-export activities, bringing great benefits to the people, businesses, and the economy
It can be seen that the Finance - Accounting sector has been determined to transform into an effective digital Finance - Accounting system, meeting the requirements of development, maximizing support for people, and businesses, and enhancing management capacity, ensuring transparency and professionalism However, alongside the self-efforts of the Finance sector, the coordination of the political system and the companionship of the people and businesses are crucial
1.2.2 Challenges Faced by the Finance- Accounting Sector in the Digital Transformation Process
However, in reality, the digital transformation process in the Finance - Accounting sector still faces many difficulties and challenges, as follows: Inadequate Information Technology Infrastructure: The Information Technology infrastructure for the Finance - Accounting sector in Vietnam has been invested in but has not kept up with the latest trends and has not been adequately addressed However, the challenging issue is that expanding digital infrastructure investment is not an easy task and cannot be implemented immediately, while the application of Industry 4.0 technologies in the Finance - Accounting field is rapidly progressing
Shortage of highly qualified Finance - Accounting personnel: In accounting work, human resources play the most important role as they possess extensive knowledge and are closely tied to the interests of many stakeholders The reality shows that the Finance - Accounting sector in Vietnam not only lacks quantity but also lacks quality in terms of human resources According to statistics from the Vietnam Association of Certified Public Accountants, up to two-thirds of graduates in the Finance - Accounting field fail to meet the requirements of employers in many aspects
Moreover, in the current digital age with the emergence of new technologies, the demand for
Finance - Accounting professionals is high
Data security concerns: The emergence of technology in the Fourth Industrial Revolution has completely changed traditional accounting methods and processes All data will be digitized into electronic information, and blockchain technology will become a colossal “ledger” However, in a network environment, the risk of financial and accounting information theft is high, requiring personnel and officials to be aware of these risks and be prepared for potential issues in implementing new technologies If security policies and measures are not implemented, information leakage or theft can easily occur
Outdated mindset and corporate culture: The mismatch between outdated thinking and corporate culture with digital technology innovation has a significant impact on the success of digital transformation A new culture must be established within organizations to ensure that employees trust the potential of digital transformation and accept changes to work towards the company's common goals
1.3 Analysis of VOS viewer on factors influencing the digital transformation process in the Finance - Accounting sector
The digital transformation process in the Finance - Accounting sector refers to the application of digital technology and information technology in the financial and accounting activities of an organization or business It involves changing the way financial and accounting information is collected, processed, stored, and transmitted from traditional forms to digital forms The transformation process typically includes new methods, tools, and procedures aimed at improving efficiency and accuracy in collecting, processing, and reporting financial information Digital technologies and information technologies are applied, such as accounting software, asset management systems, data analytics tools, process management systems, automated financial reporting systems, electronic payment systems, and more
The digital transformation in the field of Finance and Accounting is influenced by various factors, both subjective and objective However, in general, the process of digital transformation in the Finance and Accounting field is an essential part of the Fourth Industrial Revolution, as humans shift from manual work to machinery, technology, data, and digitization
Based on the information from 55 articles collected by the team and the VOS chart below, the team has decided to select eight factors that influence digital transformation in the field of Finance and Accounting for research and analysis
These factors are Innovation, application, cloud computing, cost, blockchain, organization, analytics, and management
Source: Graph from Vosviewer of the team
Factor: Innovation, Source: Graph from
In the field of engineering and technology,
‘innovation is understood as the process of ’ creating and applying new ideas, technologies, methods, or products to generate value and improvement in the areas of technology, science, and information technology Innovation is the driving force behind the overall digital transformation or specifically the digital transformation in the field of Finance and
FACTORS INFLUENCING SUCCESSFUL DIGITAL
Implications of data security management policies
Data security is a critical aspect of digital transformation as organizations collect, store, and process vast amounts of data to drive their operations and decision-making Implementing robust data security management policies is essential to protect sensitive information, maintain customer trust, and comply with regulatory requirements Some key implications of data security management policies include:
Risk mitigation: Data security policies help identify and mitigate potential risks associated with data breaches, unauthorized access, and data loss
By implementing measures such as encryption, access controls, and data backup strategies, organizations can minimize the likelihood and impact of security incidents
Compliance with regulations: Data security management policies ensure that organizations adhere to relevant data protection and privacy regulations Depending on the industry and geographical location, organizations may need to comply with laws such as the General Data
Consumer Privacy Act (CCPA), or other industry- specific regulations Compliance helps organizations avoid legal penalties and maintain a positive reputation
Protection of customer trust: Data breaches and privacy incidents can significantly erode customer trust Implementing strong data security management policies demonstrates a commitment to protecting customer data, fostering trust, and maintaining long-term relationships with customers
Organizations often store valuable intellectual property, trade secrets, and proprietary information in digital formats Data security measures protect these assets from unauthorized access, theft, or exploitation by competitors, ensuring the organization's competitive advantage
Business continuity: Data security policies include strategies for data backup, disaster recovery, and incident response These measures ensure that in the event of a security incident or system failure, organizations can quickly recover their data and resume operations, minimizing downtime and potential financial losses Vendor management: Many organizations rely on third-party vendors or cloud service providers for data storage and processing Data security management policies include guidelines for selecting trusted vendors, assessing their security practices, and establishing contractual obligations to protect the organization's data when working with external parties
Employee awareness and training: Data security policies include training programs to educate employees about their responsibilities regarding data protection By raising awareness and providing ongoing training, organizations can empower employees to make informed decisions and adhere to best practices, reducing the risk of human error or negligence
Incident response and breach notification: Data security policies outline procedures for detecting, responding to, and containing security incidents They also define protocols for notifying affected individuals or regulatory authorities in the event of a data breach, enabling organizations to handle incidents effectively and meet legal requirements
Overall, implementing data security management policies is essential to safeguard sensitive information, maintain regulatory compliance, protect customer trust, and ensure the smooth functioning of digital transformation initiatives By prioritizing data security, organizations can mitigate risks and reap the benefits of digital transformation securely and responsibly.
PROPOSING SOLUTIONS FOR SUCCESSFUL DIGITAL
Emphasizing Information Security
In the current digital era, protecting information from cyber threats is of utmost importance when information is being transferred and stored in digital environments Prioritizing information security during digital transformation helps businesses safeguard crucial information from malicious individuals, protect their reputations, and enhance customer trust Implementing information security measures that comply with network security standards also helps businesses meet legal regulations, as legal authorities increasingly focus on protecting business information to avoid penalties and disruptions to business operations
Firstly, companies must establish information security policies and regulations and implement them rigorously to ensure the security of information during the digital transformation process Secondly, companies need to utilize information security tools such as antivirus software, and firewalls to prevent external attacks, monitor and record activity logs, and employ data encryption solutions to ensure data security during the digital transformation process, limiting data sharing between departments Next, senior executives should control system access, allowing only authorized personnel to access the company's systems Lastly, regular checks and evaluations are crucial to detect and promptly address system vulnerabilities
Leading global banks such as JPMorgan Chase, Bank of America, and Wells Fargo place special emphasis on investing in technology to ensure information security for their customers Companies in the insurance, securities, and accounting sectors also focus on information security, employing technologies such as digital signatures, electronic documents, and timestamping systems to ensure validity and accuracy in transactions.
Developing Human Resources
In addition to the two solutions mentioned above, which are implementing information technology and focusing on information security and privacy as analyzed earlier, another important factor contributing to the digital transformation process in enterprises is the development of human resources, especially in the Finance and Accounting field In the era of digital transformation, new technologies such as IoT, blockchain, Big Data, and Cloud Computing have changed the way businesses operate and provide value to customers To successfully apply these new technologies, businesses need a workforce with the appropriate knowledge and skills to deploy and manage the digital transformation process They need to be aware of and prepared for potential issues that may arise when implementing new technologies To meet the changing demands and rapid development of current technology industries, employees in enterprises need to be equipped and trained in courses on new technologies and how to use them to keep up with the development of the 4.0 technology era
With the rapid impact of digital transformation in the Finance and Accounting industry, employees need to be trained and enhance their knowledge and skills in digital technologies This will help businesses effectively and optimize the application of new technologies Additionally, training enhances creativity, enabling employees to come up with solutions suitable for current digital transformation trends, and helping companies compete and thrive in the digital age Prominent examples of these new trends are Blockchain, IoT, and Big Data To effectively implement these technologies, a workforce equipped with the necessary knowledge and skills is essential
Therefore, training and refreshing young, talented employees are crucial in the digital transformation process Similarly, in safeguarding financial and accounting information from malicious actors, companies must equip their employees to improve their awareness of cybersecurity, enabling them to prevent and address potential issues The Finance and Accounting industry is one of the most fiercely competitive industries with numerous competitors
Well-trained employees provide companies with a competitive advantage and meet customer requirements
Developing the workforce also helps companies build a technology culture, creating unity throughout the digital transformation process When knowledge is uniformly distributed, it facilitates the smoothest and most efficient digital transformation Lastly, an equally important aspect of developing human resources is helping businesses adapt to the modern labor market, attracting talented individuals, and retaining them
In summary, developing the workforce during the digital transformation process is crucial to ensuring the success of any business
Changing corporate culture is simply the process of changing the values, beliefs, attitudes, behaviors, and work styles of an organization, from leaders to employees The purpose of this effort is to adapt to the business environment in the technology era, improve processes, and align labor productivity with the digital transformation process Moreover, changing corporate culture helps businesses establish a clear vision and goals, providing direction for the organization's development This is a time-consuming process that requires the support of top-level managers Changing corporate culture can impact various aspects of an organization, such as collaboration between departments and employee motivation
In the Finance and Accounting industry, changing corporate culture is crucial to creating a professional work environment with transparency, especially with the development of technology
Changing corporate culture becomes even more necessary to ensure the safety and security of financial transactions It ensures the success of the company by providing several benefits, including:
+ Creating employee acceptance and support:
While changing corporate culture can sometimes pose challenges for employees, if a company successfully implements this step, employees can easily understand and accept the changes This helps the company create a new, dynamic working environment that is suitable for the digital transformation process
+ Enhancing labor productivity and business:
Once acceptance and support from employees are established, this will make the company's digital transformation process more flexible and responsive to market changes
Consequently, it increases labor productivity and business performance
In conclusion, changing corporate culture during the digital transformation process is extremely important for all industries, particularly in the
Finance and Accounting sector It helps businesses adapt and thrive in a competitive and ever-changing business environment
In the era of the Fourth Industrial Revolution, digital transformation is taking place rapidly in various fields, including the Finance and Accounting industry The application of digital technology in the Finance and Accounting sector brings numerous benefits, including increased accuracy, transparency, and efficiency, as well as cost reduction and time savings
One of the highlights in the digital transformation process of the Finance and Accounting industry is the development of accounting software, financial management software, asset monitoring software, and other tools to facilitate easier and more automated financial and accounting management Emerging technologies such as artificial intelligence, blockchain, and cloud computing are also being applied in Finance and Accounting to enhance security and facilitate information sharing among stakeholders
However, digital transformation also poses many challenges for the Finance and Accounting industry One of the major challenges is ensuring information security Given the high sensitivity of financial and accounting information, ensuring information security becomes a crucial issue in the digital transformation process Furthermore, digital transformation requires Finance and Accounting professionals to have digital skills This means that employees need to be trained to use new tools and software effectively
To achieve success in the digital transformation process, businesses and organizations in the
Finance and Accounting industry need to invest in digital technologies and ensure that their employees have the necessary skills to use them Additionally, support from the government and relevant organizations is needed to create a favorable environment for digital transformation in the
In conclusion, digital transformation in the
Finance and Accounting industry is an inevitable trend The application of digital technology in this industry brings many benefits but also presents challenges To achieve success in the digital transformation process, businesses and organizations in the industry need to invest in digital technologies, ensure information security, and provide training for their employees to effectively use these technologies Additionally, support from the government and relevant organizations is crucial in creating a favorable environment for digital transformation in the
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