Building the IOT software development strategy for vietnam innovation value added services co , ltd during period 2019 – 2024

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - ĐÀO MINH NGỌC BUILDING THE IOT SOFTWARE DEVELOPMENT STRATEGY FOR VIETNAM INNOVATION VALUE ADDED SERVICES CO., LTD DURING PERIOD 2019 – 2024 XÂY DỰNG CHIẾN LƯỢC PHÁT TRIỂN PHẦN MỀM IOT CHO CÔNG TY TNHH CUNG CẤP GIẢI PHÁP DỊCH VỤ GIÁ TRỊ GIA TĂNG VIVAS TRONG GIAI ĐOẠN 2019 – 2024 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2019 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - ĐÀO MINH NGỌC BUILDING THE IOT SOFTWARE DEVELOPMENT STRATEGY FOR VIETNAM INNOVATION VALUE ADDED SERVICES CO., LTD DURING PERIOD 2019 – 2024 XÂY DỰNG CHIẾN LƯỢC PHÁT TRIỂN PHẦN MỀM IOT CHO CÔNG TY TNHH CUNG CẤP GIẢI PHÁP DỊCH VỤ GIÁ TRỊ GIA TĂNG VIVAS TRONG GIAI ĐOẠN 2019 – 2024 Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS HỒNG ĐÌNH PHI HÀ NỘI - 2019 DECLARATION The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration Date………………………… ACKNOWLEDGEMENT From the beginning to the end of this long and sometimes strenuous journey, I have been greatly supported and cheered along with a great number of people It is such a pleasure to offer a sincere and heartfelt thank you to them all in my humble acknowledgement In the first place I would like to record my profound gratitude to my Supervisor, Assoc Prof Dr Hoang Dinh Phi, for his guidance, supervision and tactical advice throughout the entire process of writing this research I am deeply grateful to be a student of such a kind and supportive Supervisor, who believe in my potential, and provided me with doses of encouragement and support in various ways I would also like to thank all lecturers at HSB, who have given me the knowledge and enthusiasm, helping me to complete this thesis It has been an honour and pleasure to know them Finally, I would like to express my deepest gratitude to my Father, Mother, my Wife and my two little babies for their strong support in pursuing my higher education at HSB Thank you very much! Dao Minh Ngoc CONTENT ABBREVIATION i LIST OF TABLES ii LIST OF FIGURES iii INTRODUCTION CHAPTER BASIC THEORY ON DEVELOPMENT STRATEGY 1.1 THE BASIC CONCEPTS 1.1.1 Strategy 1.1.2 The necessity of building strategy 1.1.3 Levels of strategy 11 1.1.4 Definition of strategic management 12 1.1.5 Process of building strategy 14 1.2 THEORETICAL TOOLS 15 1.2.1 Porter five forces’ framework 15 1.2.2 IFE & EFE matrix 18 1.2.3 SWOT matrix 21 1.3 INTERNET OF THINGS (IOT) 23 1.3.1 IOT Concept 23 1.3.2 Internet of Things review 24 CHAPTER ANALYSIS AND DESIGN OF IOT SOFTWARE DEVELOPMENT STRATERY FOR VIETNAM INNOVATION VALUE ADDED SERVICES Co., Ltd DURING PERIOD 2019 – 2024 28 2.1 COMPANY’S CURRENT SITUATION ANALYSIS 28 2.1.1 About Vivas 28 2.1.2 Major products of the company 29 2.1.3 Financial information 30 2.1.4 Vivas IOT Technology Center and SCP Platform 31 2.1.5 IT Software Industry Background 35 2.1.6 Agricultural production in Vietnam 36 2.1.7 IoT applications in agriculture 39 2.2 STRATEGY ANALYSIS 41 2.2.1 Porter’s Five forces framework Analysis 41 2.2.2 Summary of interview and the survey 44 2.2.3 External Factors Evaluation 51 2.2.4 Internal Factors Evaluation 58 2.2.5 SWOT Matrix 64 2.3 BUILDING THE STRATEGIES 65 2.3.1 SO strategies 65 2.3.2 ST strategies 66 2.3.3 WO strategies 67 2.3.4 WT strategies 68 CHAPTER PROPOSAL OF SOLUTIONS 69 3.1 MISSION, VISION AND CORE VALUE 69 3.2 GENERAL SOLUTIONS 69 3.3 SPECIFIC SOLUTIONS 70 3.3.1 Product solutions 70 3.3.2 Human resource solutions 72 3.3.3 Improve product implementation process 72 3.3.4 Problems may be encountered during implementation 74 CONCLUSION, LIMITATION AND IMPLICATION 76 Conclusions 76 Limitations 77 Implications 77 REFERENCES 78 ABBREVIATION Sr No Abbreviation Full form AI Artificial Intelligence APEC Asia-Pacific Economic Cooperation I²oT Industrial Internet of Things ICT IOCV IOE Internet of Everything IOT Internet of Things IT Information Technology M2M Machine-to-Machine 10 SCP Smart Connected Platform 11 VCCI Vietnam Chamber of Commerce and Industry 12 VINASA 13 VIVAS 14 VNPT Information and Communications Technology Internet of Things Open Community for Vietnam Vietnam Software and IT Services Association Vietnam Innovation Value Added Services Co., Ltd Vietnam Post and Telecommunication Corporation i LIST OF TABLES Table 1.1: Paradigms Strategy (Teece et al., (14)) 10 Table 1.2: The EFE Matrix (Hoang Dinh Phi 2015) 18 Table 1.3: The IFE Matrix (Hoang Dinh Phi 2015) 19 Table 2.1: EFE of Vivas company in IOT (Author 2019) 51 Table 2.2: IFE of Vivas company in IOT (Author 2019) 58 Table 2.3: SWOT of Vivas company in IOT (Author 2019) 64 ii LIST OF FIGURES Figure 1.1: Strategic management model (Wheelen & Hunger 2006) 14 Figure 1.2: Four elements of strategic management (Wheelen & Hunger 2006) 14 Figure 1.3: Porter five forces’ framework (business-to-you.com 2016) 16 Figure 1.4: SWOT analysis (Hoang Dinh Phi 2015) 22 Figure 1.5: IoT viewed as a network of networks (Cisco IBSG 2011) 24 Figure 1.6: Billions of Internet-Connected Devices (MIT Technology Review 2014) 25 Figure 1.7: The Digital Universe in 2020 (IDC 2012) 26 Figure 2.1: Vivas turnover bar chart (Author 2019) 30 Figure 2.2: Vivas profit line graph (Author 2019) 31 Figure 2.3: SCP Highlights (Source: VNPT Technology 2018) 32 Figure 2.4: Overall model of VNPT Technology's Smart Connected Platform (Source: VNPT Technology 2018) 33 Figure 2.5: SCP main characteristics (Source: VNPT Technology 2018) 34 Figure 2.6: Number of households and enterprises in Agriculture (Author 2019) 37 Figure 2.7: Greenhouse distribution chart (Author 2019) 38 Figure 2.8: potential and useful applications for smart agriculture (Author 2019) 39 iii INTRODUCTION Rationale One of the key words in the IT industry in 2017 and the first half of 2018 is Internet of Things (IOT) IoT is constantly mentioned in technology seminars, economic forums or dialogue programs At Consumer Electronics Show 2014 (CES), former Cisco chief executive John Chambers predicted the Internet of Things would be a $19 trillion market over the next several years Other estimates are not far off In 2013, McKinsey (an American worldwide management consulting firm) report estimated various IoT applications could have an economic impact about $11 trillion a year by 2025 During the APEC 2017 Summit, one of the most discussed topics is whether IoT will replace human labour Basically, IoT cannot replace people, but IoT will help people optimize their workforce, make the hard work become easier It does not mean that people will stomp on the spot It means that people must become smarter, more knowledgeable to master the technology Following the general trend in the world, there are quite a few companies in Vietnam focusing on developing smart technology solutions and products based on IoT There are some familiar names that have been well received by the market recently such as Lumi, BKAV SmartHome One thing in common among these suppliers is that they focus on smart home appliances (Smart Home), and target to customers who are willing to spend money to facilitate their house These products are focusing invested in designs in order to make the house more luxurious The IoT is not only applied in Smart Home but also in many areas such as health, transportation, environment, agriculture and so on In July 2011, the Vietnam Innovation Value Added Services Co Ltd (VIVAS) was officially established under VNPT Technology Joint Stock Technology, Vivas needs to continue the research and propose technical solutions that VNPT Technology can optimize and master technology - Cooperate with foreign companies to develop products and technologies - Optimize production process: software version management, standardization of the process of implementation, optimization of the steps to reduce costs, training skills to deploy products to improve efficiency in the implementation process - Develop and implement marketing strategies, introduce and advertise in large farming areas in the country - Carry out trademark registration for products as well as registration of intellectual property and industrial designs 3.3 SPECIFIC SOLUTIONS 3.3.1 Product solutions Instead of building specific and small products, Vivas needs to build a comprehensive, configurable and customizable solution that is easy to deploy and applicable to different requirements, different customers The author proposes two main groups of solutions as below Solutions to manage the environment, climate, water, energy and nutrition a Monitoring system o Monitoring soil environment, mediate environment and water o Monitoring the climate in a narrow range: hydroponic growing area, outdoor vegetable growing area, o Air Quality Monitoring Stations b Control systems o Intelligent climate control system in greenhouses o Control system in a hydroponic plant 70 c Energy analysis systems o Energy analysis and monitoring o Monitoring solar energy d Irrigation systems o Drip irrigation system o Sprinkler irrigation system e Systems to regulate and provide nutrition o Implementing solutions to provide nutrition for hydroponic plants o Adjust nutrient solution for hydroponic plants Solutions for data management and information exchange on the cloud platform a Real-time remote management and monitoring o Real-time updates can be remotely checked and controlled via smart devices o Simultaneous management of dispersed systems, nutrient level, temperature monitoring, of many different greenhouses o Grant management rights for each employee o Update real-time information and notification via SMS, email, b Analyze data and build statistical charts o Use charts to analyze and identify issues that help improve farming effectiveness o The data collected by the sensors is transmitted to the cloud for future data analysis and queries c Remote consultation o Allow users to share data and experiences between greenhouses for useful advice o Improve the effectiveness of training for farmers by regularly updating the latest green production technologies 71 d Collect data intelligently o Collect detailed information of the production system including location, farmers, soil quality, growth process, harvesting time, fertilizer used… o Automatically record information to build up data for quality control and pesticide residues 3.3.2 Human resource solutions - The HR department works with other departments to conduct a complete and comprehensive assessment with current data of professional qualifications and human resources in Vivas - Develop a detail high-quality recruitment and training plan in short term and long term - Coordinate with training centers, universities Based on the needs and development strategies of enterprises, the training centers conduct training under "orders" to quickly meet the demand and quality - Enhance international cooperation in training technical and high-tech human resources 3.3.3 Improve product implementation process When implemented correctly, the Internet of Things can increase an enterprise’s productivity and avoid wasting, create sustainable ecosystems, or increase revenue streams The author outlined a step-by-step plan for success of IoT implementation Step 1: Determine business case In this step, the most important thing that cannot skip is to determine the IoT business case Normally, the business case for IoT is built by many departments and approved by business executives or even the board of directors However, companies often face a lack of collaboration between departments and a lack 72 of focus when it comes to potential benefits A critical in first step is to have each decision-maker define his or her definition of success before the project begins In a Cisco study (31), 54 percent of successful IoT initiatives showed that collaboration between IT and business departments is an important reason for success Step 2: Select the way to implement After identifying a business case, company will have to make choices, build itself or cooperating with external partners to implement this business case The usual answer will be a combination of both options According to a Cisco study (2017), the most successful organizations engage the IoT partner ecosystem at every stage They used partners beginning with strategic planning and design and architecture through to maintenance, technical consulting, and data analytics after rollout Implementing an out-of-the box solution with an internal team with limited IoT knowledge and capacity cannot yield the same results of working with an experienced team Step 3: Proof of Concept (PoC) This step to identify a few key points, not every little detail This is very important for "Think big - a very successful and effective plan", however the beginning of the small things inside PoC allows quick and continuous testing The PoC is designed to show how an IoT solution can solve a problem or add value to a business segment Create a plan and determine which percentage of your fleet, facility or office should be piloted Step 4: Pilot implementation After PoC succeeds, businesses need to identify development scenarios and ensure IoT solutions can be integrated in large organizations The most difficult thing in this step is to train employees to use the system and be ready for the organization's change 73 Step Trade deployment At this time, when the IoT solution is deployed with thousands of devices, the management and scalability of the overall system becomes an important aspect to achieving overall success Seamless organizational change and implementation of new processes is also important to get users of the system to buy into the benefits of the solution 3.3.4 Problems may be encountered during implementation Projects take longer than expected and miss deadline: Companies that have successfully rolled-out their IoT projects often talk about how they underestimated the timeline of the project Some special IoT projects went from business case development to commercial roll-out in months But these are exceptions, the current average of time-to-market is around 18-24 months Reasons for prolonged project timeline are diversified including both business-related issues (e.g., not having the buy-in from the right stakeholders) as well as technical-related issues (e.g., not working with an infrastructure that supports scaling the solution in a commercial deployment scenario) Solution: Review the revenue and cost savings assumptions for the IoT business case and plan for contingencies in case of project hold-up Work with partners that bring in experience from similar projects Organizational & cultural change is often underestimated The breakthrough nature of IoT is changing the way businesses make money Aligning the workforce with new business models requires attention from the beginning IoT solutions are only successful when the different departments within a company work together, especially the hardware, the software and the business teams This often results in friction or even opposition 74 Solution: Ensure senior management early buy-in to unify business lines, embrace new ways of cross-departmental working The necessary skills are often not available in-house Developing end-to-end IoT solutions requires a variety of complex skills including embedded system design, cloud architecture, application enablement, data analytics, security design and back-end system integration Even when the company owns most of the necessary software and hardware skills in house, they often lack experience with real IoT projects In most cases, they have limited experience working with the technology elements that are unique to the Internet of Things Solution: Map the IoT skill gaps, cross-train and up-skill the employees with a focus on new technologies unique to IoT Work with true IoT experts from different fields with deep domain knowledge 75 CONCLUSION, LIMITATION AND IMPLICATION Conclusions The thesis is studied with the desire to apply scientific theories to provide practical and effective directions and solutions that can be applied to business activities of enterprises, in order to improve product quality, increase revenue, profit and position of Vivas in the field of software production in general and IoT in particular The author hope that the above analysis, evaluation and selection will help Vivas leaders have an additional view in the process of building and selecting the best strategy, appropriate to the current context In order to make this strategy feasible to Vivas's operation, besides the company's leadership's determination, it also requires determination and consensus from relevant departments as well as employees Action programs need to be reviewed and promoted from departments to implement the strategy in a coordinated and effective manner, especially internal communication With the above desire, the author would like to propose recommendations for Vivas as follows: - Increasing investment in new IoT product and technology research - Set up preferential policies to attract talented people - Reorganize internal assessment and quality control apparatus: Currently, the compliance with the company's processes and regulations is still not high The implementation of projects is not really effective and professional because there are not many good project managers Therefore, the control apparatus needs to work harder to warn and control risks - Internal communication: Improve the effectiveness of internal communication activities so that the strategy and objectives are spread throughout the staff and employees in the company 76 - Implementing three simultaneous objectives: developing IOT product, marketing and customer support In the process of researching and completing this thesis, the author has tried to adopt most of the new knowledge conveyed by experts inside and outside the HSB The author would like to express sincere thanks to the teachers, especially the instructor, Assoc Prof Dr Hoang Dinh Phi who has devotedly helped to complete the author’s first scientific research Limitations The author selected the exploratory method based on a qualitative approach to collect data However, combining the exploratory method with a quantitative approach would have helped the researcher to have a better understanding of the situation and narrow down the findings Future research should gather data from a larger number of respondents to have a more representative sample Within the limits of a graduate thesis, as well as the knowledge of author, it is inevitable that this thesis cannot avoid shortcomings The author wishes to continue to receive comments from teachers and colleagues in near future Implications When finishing this study, the author found that building strategy and strategic management played an important role in the success of each company In this thesis, the author only focuses on a case study of IoT for Smart Agriculture Probably it is difficult to apply to other companies or areas However, it can be concluded that every company needs an accurate strategy before they explore the market They should clearly and seriously analyze the advantages, disadvantages, mission, vision and core values, then find the place of them People can learn some successful experiences but cannot copy strategies from others because each company has its own way of characteristics and operations 77 The author hopes this thesis can help Vivas achieve better performance in near future and it may increasingly pay more attention to strategic management REFERENCES Maciej Kranz, 2018, Thiết lập internet vạn vật doanh nghiệp, Alpha books Bach Tan Sinh, 2017, Khả định hướng phát triển Internet kết nối vạn vật (Internet of Things – IoT) giới http://vietnamstijournal.net Accessed June 2019 B H Liddell Hart 1967 Strategy Basic Books George Steiner 1979 Strategic Planning Free Press Mintzberg, H 1994 The Rise and Fall of Strategic Planning (1994) Basic Books Kenneth Andrews 1980 The Concept of Corporate Strategy, 2nd Edition Dow-Jones Irwin Michael Porter 1996 What is Strategy? Harvard Business Review Hoang Dinh Phi, Lecture Notes “Management of Strategies and Plans”, Training Document for HSB -MBA, 2015 Mintzberg, H 1987 The Strategy Concept II: Another Look at Why Organizations Need Strategies California Management Review 10.Chandler, A D 1962 Strategy and Structure: Chapters in the History of the Industrial Enterprise Cambridge, MA: M.I.T Press 11.Whittington, R 2003 The work of strategizing and organizing: for a practice perspective Sage Publications 12.Barry, D and Elmes, M 1997 Strategy retold: Toward a narrative view of strategic discourse Academy of management review 78 13.Rumelt, R P., Schendel, D., & Teece, D 1994 Fundamental issues in strategy: A research agenda Boston: Harvard Business School Press 14.Teece, D., Pisano, G., & Shuen, A 1997 Dynamic Capabilities and Strategic Management John Wiley & Sons, Ltd 15.Hunger, D J., & Wheelen, T L 2006 Concepts in Strategic Management and Business Policy 10th ed Pearson Education, Inc New Jersey 16.Dess, G G., & Miller, A 1993 Strategic management Mc Grow-Hill book Co New York 17.Hoskisson, R E., Hitt, M A., Ireland, R D, & Harrison, J S 2012 Competing for Advantage Cengage Learning 18.Porter, M E 1980 Competitive strategy: Techniques for analyzing industries and competitors New York: Free Press 19.Porter, M E 1985 Competitive Advantage: Creating and Sustaining Superior Performance, New York, NY: Free Press 1985 20.Ovidiu Vermesan & Peter Friess 2014 Internet of Things – From Research and Innovation to Market Deployment River Publishers :8 21.Klaus Shwab 2016 The Fourth Industrial Revolution World Economic Forum 22.Siemens 2014 Facts and Forecasts: Billions of Things, Trillions of Dollars Https://www.siemens.com Accessed 10 January 2019 23.AbiResearch 2013 More Than 30 Billion Devices Will Wirelessly Connect to the Internet of Everything in 2020 Https://www.abiresearch.com Accessed 10 January 2019 24.Analytics Insight 2018 Intelligent Enterprise Index Marks an Increase in Asia-Pacific’s IoT spending by 12% https://www.analyticsinsight.net Accessed 03 March 2019 79 in 2018 25 Microsoft 2016 Ten reasons your business needs a strategy now to capitalize on the Internet of Things https://blogs.microsoft.com Accessed 11 January 2019 26.Vietnamnet 2018 The power of Vietnam’s software industry https://english.vietnamnet.vn Accessed 15 January 2019 27.Vietnam Economic News 2018 IT industry in Vietnam enjoying boom http://ven.vn Accessed 20 January 2019 28.General Statistics Office of Vietnam 2017 Result of Rural, Agricultural and Fishery Census 2016 https://www.gso.gov.vn Accessed 20 February 2019 29.Hanoitimes 2018 Prospects for IoT development in Vietnam's agriculture http://www.hanoitimes.vn Accessed 16 February 2019 30.Intel 2017 The IoT Value Chain https://blogs.intel.com Accessed 16 March 2019 31.Cisco 2017 Internet of Things: Challenges, Breakthroughs and Best Practices https://connectedfutures.cisco.com Accessed 15 March 2019 80 APPENDIX: IoT Questionnaire Question 1: Who is in charge of the IoT business strategy for defining mission, vision and core value? CEO Board of Director Business team Technology & IT team Business team together with Technology & IT team Other Question 2: What is the area of application of IoT we should follow to get success? Connected Industry Smart City Smart Energy Connected Cars Smart Agriculture Connected Health Transportation Other Question 3: What are the key standards, technologies and architecture models to reach your IoT and sustainable development goals? Cloud Computing using Data Centres Cloud Computing and Fog computing with Data Centres Big Data using Hadoop Big Data using MongoDB, MySQL & NoSQL 81 IEC/ISO Architecture Model Other Question 4: What is your most pressing reason for your business to adopt IoT for Smart Agriculture solutions? Data growth Customer requirement Growth in IT Infratructure Reputation and Branding Cost reduction for enegy Technology changes Support from Goverment policies Not many competitors right now Pressure from VNPT Other Question 5: Which are the most important technologies / developments impacting IoT applications for agriculture? Sensor Wireless communication Miniaturization of hardware Processing power Energy harvesting Interoperability of devices/nodes Device/node intelligence Human machine interaction Internet Technology Data Analysis 82 Other Question 6: What is the biggest challenge when Vivas implements IOT in smart agriculture? Human resource Cost Harsh climate and climate change in Vietnam Hardware device Security Difficult to get customers Practical for testing Agriculture knowledge Connectivity ROI Other Question 7: What is your primary experience with building IoT solutions? I develop IoT solutions for my company I am learning about IoT technology in my space time I am researching IoT solutions for myself I am researching IoT solutions for my company I develop IoT solutions in my space time No experience Question 8: How you foresee the human resources getting utilized in these challenging times for deploying IoT? ……………………………………………………………………………… ………………………………………………………………………………… 83 ………………………………………………………………………………… ……………………………………… Question 9: What changes in the organization are you experiencing or foresee for governance, processes and policies to support IoT? ……………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ……………………………………… Question 10: In your opinion, IoT application development strategy is the correct choice of the company? ……………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… ……………………………………… Name Interviewee: Position: Organization: Date: 84 ... ĐÀO MINH NGỌC BUILDING THE IOT SOFTWARE DEVELOPMENT STRATEGY FOR VIETNAM INNOVATION VALUE ADDED SERVICES CO., LTD DURING PERIOD 2019 – 2024 XÂY DỰNG CHIẾN LƯỢC PHÁT TRIỂN PHẦN MỀM IOT CHO CÔNG... long-term strategy to ensure the survival and sustainable development of the company This is the main reason for the author to choose the topic "Building the IOT Software Development Strategy for Vietnam. .. DEVELOPMENT STRATEGY CHAPTER ANALYSIS AND DESIGN OF IOT SOFTWARE DEVELOPMENT STRATERY FOR VIETNAM INNOVATION VALUE ADDED SERVICES Co., Ltd DURING PERIOD 2019 – 2024 CHAPTER PROPOSAL OF SOLUTIONS CONCLUSION,