Digital Kaizen at FPT Software: Principles and Practices for Digital Transformations

Abstract

(a) Situation faced: While companies are leveraging technologies to improve their business performance, digital transformation is still perceived as an abstract concept. Most companies do not know where and how to start. FPT Software’s lack of synergy prevents the company from reaping the benefits of its digital transformation activities. The large-scale transformation also requires a ready-to-change culture, which can be daunting to a company with more than 28,000 employees across geographies with different technological capabilities. This chapter explores the applications of Digital Kaizen methodology in guiding FPT Software’s digital transformation journey and in helping them to commercialize their digital transformation solutions. (b) Action taken: FPT Software tackles cross-functional pain points by implementing technological initiatives that improve business processes and increase employee engagement. These initiatives are well aligned with the company’s strategic goals; thus, they are sustainable and scalable digital transformation solutions. First, cross-functional pain points are identified by both managers and working-level employees through conducting workshops. Second, a series of manageable digital transformations are performed to change business processes, the employees’ mindsets, and work processes. Last, FPT Software commercializes its own successful digital transformation initiatives and sell them as solutions to the clients. Two digital transformation projects, MyFPT and AkaLink, are presented in this chapter. (c) Results achieved: The Digital Kaizen methodology has urged FPT Software to continuously optimize and improve their business operations through implementing innovative transformations. By implementing incremental improvements, MyFPT has resolved 22 strategic pain points until June 2020. AkaLink has addressed 19 pain points, resulting in approximately USD700,000 in terms of monetary benefits. It is projected to rise to USD2.5 million after 1 year. These digital transformation projects also produced spillover effects, i.e., driving people engagement and nurturing the culture of change, which benefit the whole company. FPT Software commercializes its digital transformation solutions by using successful projects as practical case studies. (d) Lessons learned: FPT Software’s digital transformation journey offers three main lessons. First, driving digital transformation through making incremental changes enables companies to realize the benefits quickly. This subsequently motivates transformation activities at large scale across the entire organization. By selecting the cross-functional pain points that are aligned with strategic objectives, FPT Software has solved operational issues without losing sight of its long-term vision. Second, companies should improve organizational change capacity by engaging their own employees who are the drivers of digital transformations. Third, as digital transformation is an ongoing process, a philosophy-driven digital transformation, such as that guided by Digital Kaizen, would develop a climate of engagement and creativity among organizational members at all levels.