ASSESSING THE SITUATION OF TECHNOLOGY MANAGEMENT AND DEPLOYMENT OF TECHNOLOGY DEVELOPMENT STRATEGY .... In other words, technology development strategy is the plan and action that guides
Rationale
The world has gone through a lot of tough times after COVID-19, with the fight between Russia and Ukraine and growing problems in the Middle East making the world's economy even weaker These issues have had a big impact, affecting commodity prices, including fuel and precious metals, and exerting additional pressure on supply chains and inflation In the era of the Fourth Industrial Revolution (Industry 4.0), businesses are compelled to adapt swiftly to survive and thrive This necessitates embracing digital transformation, optimizing operations through advanced technologies, and innovating within their business models They need to use digital tools, make their work more efficient with new tech, and find new ways to do business Businesses that use the benefits of Industry 4.0 can make their work smoother and find chances to grow, even when times are hard It is a period that demands resilience and a forward-thinking approach to navigate the complexities of a rapidly changing economic landscape
On one hand, Vietnam is actively fostering a culture of innovation, with the government playing a pivotal role in this transformation Recent initiatives have focused on enhancing the country's science, technology, and innovation capabilities, aiming to drive sustainable economic growth and propel Vietnam towards its goal of becoming a high-income economy by 2045 The establishment of the Vietnam Innovation Challenge 2024, focusing on key sectors like semiconductors and artificial intelligence, reflects the nation's commitment to nurturing innovation This challenge is part of a broader vision to support pioneering enterprises and develop a robust innovation ecosystem, making Vietnam an attractive destination for technology and innovation investors With policies that encourage firms to invest in research and development, and the creation of organizations like the National Innovation Center, Vietnam is laying the groundwork for a future where innovation contributes significantly to its economic prosperity
On the other hand, the reinsurance market is facing numerous challenges during the era of the Fourth Industrial Revolution and the explosion of artificial intelligence (AI) The adoption of new technologies such as AI, Big Data, and the Internet of Things (IoT) requires insurance companies to make significant investments in technological infrastructure and workforce training The massive volume of data from connected devices and other sources needs to be managed and analyzed effectively to make accurate business decisions At the same time, the risk of cyber security threats is increasing, necessitating robust measures to protect data and information systems Traditional insurance companies need to change their business models to adapt to new trends like Insurtech, where technology is deeply integrated into insurance processes The rapid and complex changes in technology can lead to a crisis of trust from customers if not managed well However, alongside these challenges, there are also many opportunities for insurance companies to enhance operational efficiency and provide better services to customers
Additionally, technology development strategy management is a crucial process that significantly impacts organizational performance and competitiveness It involves creating value, assisting differentiation, enhancing productivity, guiding creativity and initiative In an environment characterized by uncertainty due to rapid technological change, the strategic management of technology development configures capabilities and resources within organizations These capabilities include the ability to search for innovations, select the most advantageous ones, and appropriately capture their returns Investing in sources of innovation, such as R&D and collaboration with external partners, is essential for effective managing technology development strategy However, the dynamic nature of technology and innovation means that strategies must be emergent rather than prescribed They are exploratory rather than determinable The advantages created by technology and innovation are often transitory To address these challenges, organizations need to consider not only physical and intellectual capital but also human, social, and natural capital Organizational culture and behavior play a crucial role in shaping
3 successful technology strategic management In summary, technology development strategic management is a multifaceted process that requires adaptability, learning, and a comprehensive approach to capitalize on innovation while navigating the complexities of today's operating environments It involves iterative planning, considering multiple time horizons, focusing on action, and prioritizing strategic options By aligning technology strategies with overall organizational goals and fostering a culture of continuous improvement, companies can effectively manage technological change and drive sustainable growth Additionally, from a bird eye view, a technology development management ecosystem is a network of interrelated technologies, providers, and partners that enables a large enterprise to deliver value to its customers, stakeholders, and society A technology management ecosystem can help a large enterprise achieve strategic flexibility, operational efficiency, innovation, and competitive advantage in a rapidly changing and complex environment In other words, technology development strategy is the plan and action that guides how a corporation uses and manages its technological resources, such as research and development, innovation, intellectual property, and digital transformation By improving the technology development strategy to build a comprehensive technology management ecosystem, it will be a huge step forward for businesses in their competitiveness
As the very first and one of the biggest players in the Vietnam insurance market, VINARE has its own unique journey at finding its core technology to manage/access risks, and as well as applying technologies in corporation operations However, to maintain its competitive edge and achieve its goals, VINARE needs an improved technology development strategy with a reasonable vision and step by step effective, specific and scientific implementation to address the challenges and opportunities of the industry A suitable, calculated technology development strategy could help VINARE to:
- Enhance its core competencies and create value for its customers and stakeholders
- Improve its operational efficiency and productivity
- Reduce its environmental impact and carbon footprint
- Adapt to the changing market demands and customer preferences
- Foster a culture of innovation and learning within the organization
- Collaborate with other actors in the ecosystem, such as suppliers, partners, regulators, and competitors
Therefore, improving a technology development strategy is an urgent and essential task for VINARE at this time, as it can determine its long-term success and survival in the dynamic and competitive market.
Literature review
Research in technology applications and management of its strategy in enterprises has always flourished worldwide In recent years, the topic could be divided into 2 types, Technology in financial sector, and Business strategy research The following paragraphs will provide insights into the current state of research on technology strategy across different contexts
Firstly, recent research such as Analysis of financial technology acceptance of peer to peer lending (P2P lending) using extended technology acceptance model (TAM) by Gustita Arnawati Putri et al (2023) explore the importance of addressing both technological and psychological factors to sustain user in finance service by using TAM
Secondary, Harvard Business School faculty conduct research on various aspects of business strategy Topics include maximizing competitive advantage, strategies for digital businesses, and building resilient businesses in turbulent times For example, in the episode named Can Sustainability Drive Innovation at Ferrari?
In the podcast Cold Call, they discuss how Ferrari, the Italian luxury sports car manufacturer, committed to achieving carbon neutrality and to electrifying a large part of its car fleet
As for research papers related to technology in the insurance industry include Impact of Technology on Insurance Industry by Coline Michael Sabu (2023) explores how technology is affecting the insurance industry and evaluates how the adoption of new technologies can enhance organizational efficiency While examining Insurance Companies’ Use of Technology for Innovation by Davide Lanfranchi & Laura Grassi (2021) focuses on the role of technology and market drivers in fostering innovation initiatives within the insurance sector And finally, The Impact of Artificial Intelligence Along the Insurance Value Chain by Martin Eling et al (2021) analyzes the impact of artificial intelligence on the insurance industry, using Porter’s value chain and Berliner’s insurance criteria
Research on technology development strategy in Vietnam is an important and emerging topic that has implications for the country's economic development, innovation and competitiveness These are some of the examples of the research on technology development strategy in businesses in Vietnam that can provide valuable insights and guidance for policymakers, practitioners, and researchers The research on this topic is expected to grow in the coming years as Vietnam continues to pursue its digital agenda and embrace the opportunities and challenges of the Fourth Industrial Revolution According to a report by PwC Vietnam (2021), Vietnam has significant opportunities to further accelerate digital readiness and leverage technology to transform various sectors and industries However, the report also highlights the challenges and gaps in terms of skills, infrastructure and policy that need to be addressed to ensure a successful digital transformation Vietnamese universities and entities focused on reviewing the impacts, defining, and shaping up the digital transformation within state-owned enterprises, which are the pioneer in the field For example, Hoang Xuan Vinh and Nguyen Tung Linh
(2022) pointed out that the digital transformation in an enterprise (Vietnam Electricity Corporation, specifically in this case) requires not only a plan and culture within the enterprise but also the attention for training and management of
6 authorities such as the Ministry of Industry and Trade and the Ministry of Education and Training Additionally, Nguyen Hong Minh (2020) proposed a digital transformation model within the oil and gas industry and the associated digital transformation model attached to governance policies These shaped elements form a digital environment called a digital ecosystem
In domestic research articles, there is a lack of research related to the application of technology in technology management of insurance/reinsurance companies Although there is an article on Insurtech in Vietnam: Digitalization of the Application Process in Private Health Insurance: This study analyzes the impact of digitalization on Vietnam's insurance industry, particularly in private health insurance by author Nguyen Minh Nguyet (2021) and a study on the position and challenges of the Vietnamese insurance market in the new era Insurtech in Vietnam: Digitalization of the Application Process in Private Health Insurance by Hung Nguyen Tien et al (2021) analyzes the impact of digitalization on Vietnam's insurance industry, particularly in private health insurance.
Aims of research
Clarifying the theoretical basis related to technology development strategy in general and improving the technology development strategy at VINARE in the current context This research would examine and analyze VINARE’s current technology development strategy based on its industry, position in the market, volume, and historical transformation process Naturally, understanding VINARE’s technology development strategy gives the author a more thorough and comprehensive view of the corporation and, most importantly, is going to be a crucial part of improving the technology strategy for VINARE amid the challenge of transformation period, which lays the foundation for improving quality of work and increasing labor productivity, contributing to the sustainable development of VINARE and towards international integration Ultimately, with this research the author wants to contribute a small part to the on-going shifting within the digital
7 transformation of VINARE specifically and Vietnamese economy landscape generally
1- The author synthesizes theoretical frameworks for analysis and clarification of the technology transformation history of VINARE in the past 10 years in terms of management and the ability to acquire and master necessary technologies to serve the process of operation, management and business 2- The author assesses the current situation of technology management and deployment of technology development strategy to grow business at VINARE
3- The author applies theoretical frameworks to provide solutions to help VINARE improve its strategic technology management as well as its ability to access, select, and master technology to meet its business targets in the 2025-2030 vision.
Objects of research
Technology development strategy includes a few main contents including theoretical basis for technology development in enterprises by doing so to reviewing and determining the current situation at VINARE
Also, factors affecting the behavior of employees using information technology at work in insurance/reinsurance companies in Vietnam will also be dissected, discussed, and researched quantitatively in this thesis Thereby investigates its findings, and cautiously predicts its future trajectory and proposes some solutions to develop technology strategy at VINARE in the coming years (to 2030).
Scope of research
- Spatial range: VINARE’s headquarter at Hanoi and branch at Ho Chi Minh City
- Time range: VINARE’s technology transformation from 2014 up to now And propose solutions to improve VINARE’s technology development strategy for its business targets planning vision 2025-2030
- Subjects conducting qualitative survey: VINARE’s IT experts and managers, VINARE’s partners
- Subjects conducting quantitative survey: Vietnamese insurance/reinsurance companies’ employees.
Research methodology
The author uses theoretical frameworks to have a comprehensive view of the past 10 years of VINARE's management process, search capacity, and technology application Then next the author would operate mixed research methods, both qualitative and quantitative The research is based on Professor Hoang Dinh Phi's technology definition equation, developed into a separate interview with several information technology department experts in VINARE plus short interviews with company employees and partners of VINARE with additional of the author's practical experience in the corporation's working environment to form a clear, specific and accurate view of the strategy as well as the internal advantages and disadvantages as well as the current technology development strategy of the corporation The research paper from which there are comments to propose solutions to help VINARE improve the technology capacity development strategy to suit the current business situation and the proposed business plan for the vision of 2025-2030 The research paper in this section will go deeper into analyzing the factors affecting the level of completion of the technology development strategy, from the leaders and the board of directors (the leaders) and from the group of people responsible for propaganda and education of employees (the workers) By conducting an extensive interview with the purpose of understanding the behavior in using information technology of insurance/ reinsurance companies’ employees in Vietnam based on Technology Acceptance Model by Fred Davis, to better understand the causes that will have positive impacts on these employees' technology using behavior; to create a more detailed textures construct solutions for VINARE to achieve its goal by improving the technology development strategy.
Thesis structure
Chapter 1 Theoretical background on Technology development strategy
Chapter 2 Assessing the situation of technology management and deployment of technology development strategy to grow business at VINARE
Chapter 3 Proposing solutions for improving technology development strategy for business targets planning vision 2025-2030
THEORETICAL BACKGROUND ON TECHNOLOGY
Theoretical background
There are a lot of definition of strategy nowadays, according to Greg Fisher et al (2020) in their book Strategy in 3D: Essential Tools to Diagnose, Decide, and Deliver: Strategy involves identifying and understanding a business challenge or opportunity, making decisions on how to address it, and implementing a series of actions to achieve these decisions - the goal is to create a lasting competitive advantage and achieve superior returns compared to competitors But it could be defined by "Strategy is a document, either written, printed or electronic, in which the responsible people set out long-term mission & vision, and strategic objectives for an organization for 5 years as standard, as well as the resources to be mobilized and solutions to be implemented in order to achieve the set objectives." - Assos Prof Hoang Dinh Phi (2013) The definition could be understood by the following formula: Strategy = Mission + Vision + Core Value + Objectives + Resources + Solutions Whereas strategy is the result of combining several elements that define the purpose, direction, principles, goals, means and methods of an organization or an individual These elements are:
Mission: The reason the organization or the individual exists, what they want to achieve and how they contribute to society
Vision: The desired future state of the organization or the individual, what they aspire to become and how they will measure their success
Core Value: The fundamental beliefs and standards that guide the behavior and decisions of the organization or the individual, what they stand for and how they treat others
Objectives: The specific and measurable outcomes that the organization or the individual wants to accomplish within a certain time frame, what they need to do and how they will track their progress
Resources: The assets and capabilities that the organization or the individual has or needs to acquire, what they have and what they need
Solutions: The actions and strategies that the organization or the individual will implement to achieve their objectives, what they will do and how they will do it
Also, Hoang Dinh Phi (2013) believed: “A technology is the innovative combined use of 3 factors as of machines/tools, knowledge, and skills to transform the input into a product or a service” This definition is followed by Technology Equation:
Technology = Machines/Tools + Knowledge + Skills Whereas,
Machines or tools are physical objects that can perform tasks or functions that humans cannot do or do inefficiently
Knowledge is the understanding of how things work and why they work that way, this is also represented for software
Skills are the ability to use machines or tools effectively and efficiently
Technology enables humans to solve problems, create new products or services, improve existing ones, and enhance their quality of life Technology is not static, but dynamic and evolving It is influenced by various factors such as scientific discoveries, social needs, economic conditions, environmental issues, ethical values, and political decisions Technology also influences these factors in return, creating a complex and interrelated system of interactions and feedback loops
Combining those two definitions finally, “Technology strategy management is a process in which people with responsibility and authority according to the law
12 of the organization/corporation carry out all necessary activities from consulting, research, and forecasting to build, adopt and organize the implementation of one or more related strategies to develop technology or technology systems according to the sustainable development goals of the organization or corporation.” – Hoang Dinh Phi (2013)
Based on the above definitions, it is not difficult to relate and develop the definition and benefits of technology development strategy in an organization A technology development strategy, within the realm of technology strategy management, is a comprehensive plan that outlines how an organization will use technology to achieve its business objectives It encompasses the identification of new technologies that can provide a competitive advantage, the alignment of technology initiatives with business goals, and the creation of a roadmap for technology adoption and integration This strategy is crucial for fostering innovation, driving business growth, and maintaining market relevance in an ever- evolving digital landscape Technology development strategy is a crucial process that significantly impacts organizational performance and competitiveness It involves creating value, assisting differentiation, enhancing productivity, and guiding creativity and initiative In an environment characterized by uncertainty due to rapid technological change, the strategy development of innovation configures capabilities and resources within organizations These capabilities include the ability to search for innovations, select the most advantageous ones, and appropriately capture their returns Investing in sources of innovation, such as R&D and collaboration with external partners, is essential for effective technology management However, the dynamic nature of technology and innovation means that strategy must be emergent rather than prescriptive They are exploratory rather than determinable The advantages created by technology and innovation are often transitory To address these challenges, organizations need to consider not only physical and intellectual capital but also human, social, and natural capital Organizational culture and behavior play a crucial role in shaping successful
13 technology strategy In summary, technology development strategy is a multifaceted process that requires adaptability, learning, and a comprehensive approach to capitalize on innovation while navigating the complexities of today's operating environments It involves iterative planning, focusing on action, and prioritizing strategic options By aligning technology strategies with overall organizational goals and fostering a culture of continuous improvement, companies can effectively manage technological change and drive sustainable growth
To have a solid theoretical basis before determining and analyzing an organization's technology development strategy, it is important to clearly identify the levels and methods of technology transfer In which according to Technology transfer syllabus and learning materials provided by Truong Vu Bang Giang (2013) Technology transfer theory can help shape, define, and plan all activities related to the process of transferring, purchasing, researching, and developing technology of an organization or country There are in total 4 levels of technology transferring The first level is Knowledge Exchange which defines the transfer process is conducted at imparting knowledge by giving formulas, know-how, guidance, and technical advice The second level is Turnkey, in which the transferor must perform tasks such as: installing machines, guiding the process, Improving the entire production process and the recipient only needs to receive the project and put it into operation The third level is Product Handover, where the transferor is not only responsible for helping the recipient improve the installation of the entire production line, but also for helping them successfully produce products using the transferred technology Finally, the highest level of technology transfer – Market Handover, in which in addition to the responsibility for transferring technology to the receiving party, the transferor must also handover a part of its market, where it has successfully entered, to the receiving party On a different note, the degree of
“market transfer” is expressed in the word “joint ventures” Assos Prof Giang also pointed out that there are quite a lot of forms of technology transfer However,
14 based on the technology supply there are two types of forms which are “Vertical” transfer and “Horizontal” transfer “Vertical” transfer which refers to the direct transfer of technology from research organizations (institutes, research centers, etc.) to production organizations (enterprises, factories, etc.), this form usually takes place mainly between either industrialized countries, or the transferor is in a developed country and the recipient is in a developing country or vice versa While
“Horizontal” transfer refers to the transfer of technology from the production bases to the production bases, or from the “parent corporation” to the subsidiary This method is very popular nowadays because the fierce competition forces manufacturers to constantly innovate technology, accompanied by the transfer of “out of fashion” technologies to production facilities in other countries On the same document, Assos Prof Giang also classified technological strategies into 6 types: Leading Strategy, Following Strategy (Johnson & Onwuegbuzie, 2004)Trend following), Imitative Strategy, Dependence as a Strategy, Traditional Strategy and Opportunity Strategy Whereas Leading strategy is for entities that want to earn a pioneering posture in technology, heavily invest in R&D with strong financial resources and open to take risks Following Strategy (Trend Following) is for the entities wanting to become the 2 nd , 3 rd entering the market with products and processes improved based on the first version, however this strategy requires technological competent to be successful Imitative Strategy is for entities that often enter the market late, when the market is in a slow or ripe growth phase, and their competitive advantage in terms of low cost, the product has favored functions and is often aimed at larger markets Dependence as a Strategy is for entities that get little or no involvement in R&D, depend entirely on customers and rely on other businesses’ technology Traditional Strategy is where enterprises do not conduct any R&D activities And finally, Opportunity Strategy is for enterprises that want to respond quickly to market opportunities for short-lived products
The author will also use this entire theoretical framework to identify the levels and types of VINARE's technology development strategy, because the
15 technology transfer theory does not simply stop at the technology being exchanged between two parties, but also determines the capacity, accessibility, and ability to use and master the technology of a business in the next stage of its business plan.
Research framework
Mixed methods research is an approach that combines both qualitative and quantitative research techniques to provide a more comprehensive understanding of research problems This methodology, as described by Johnson and Onwuegbuzie
(2004), "integrates the strengths of both qualitative and quantitative approaches, allowing researchers to draw on the benefits of both paradigms" Creswell (2014) outlines that "mixed methods research involves collecting, analyzing, and integrating both forms of data in a single study or a series of studies" Academically, this approach has been widely adopted across various fields, including education, health sciences, and social sciences, to address complex research questions that cannot be fully explored using a single method alone By leveraging the complementary strengths of qualitative and quantitative data, mixed methods research provides richer insights and more robust conclusions
To analyze the user behavior regarding the adoption of innovative technology, several behavioral decision theories and intentional models have been developed by scientific literature in recent times According to the purpose of this study, and due to the relevance regarding the explanation of employees' behavior, the author has used the attitudinal model, and theories based on Social Psychology, such as the Technology Acceptance Model, or TAM (Davis et al 1989) The TAM has been regarded as the most robust, parsimonious, and influential model in innovations acceptance behavior (Davis et al., 1989, Pavlou, 2003), and as a result the author would use this theoretical model as a base for the purpose of the present study
The Technology Acceptance Model (TAM) by is a theoretical model that explains the acceptance of information systems by individuals It postulates that the acceptance of technology is predicted by the users’ behavioral intention, which is, in turn, determined by the perception of technology usefulness in performing the task and perceived ease of its use (Marikyan et al., 2023) TAM was developed to address the need for reliable measures to investigate attitudinal factors mediating the relationship between Information Systems (IS) characteristics and system use It was built upon the Theory of Reasoned Action (TRA), which was used to predict the attitudinal underpinnings of behaviors across a wide range of areas (Marikyan et al., 2023) The model consists of two main constructs: Perceived Usefulness (PU) and Perceived Ease of Use (PEOU) PU refers to the degree to which a person believes that using a particular system would enhance his or her job performance, while PEOU refers to the degree to which a person believes that using a particular system would be free of effort (Ursavaş, 2022) The TAM posits that PU and PEOU influence a user's attitude towards using a system, which in turn affects the user's intention to use the system, and finally, the actual system use The model has been widely used in various fields, including education, to understand what factors affect teachers’ acceptance and use of technology (Ursavaş, 2022) It postulates that the acceptance of technology is predicted by the users’ behavioral intention, which is, in turn, determined by the perception of technology usefulness in performing the task and perceived ease of its use (Marikyan et al., 2023)
The Technology Acceptance Model 2 (TAM 2) extends the original Technology Acceptance Model by including additional key determinants of perceived usefulness and usage intention Developed by Venkatesh and Davis in
2000, TAM 2 incorporates factors such as subjective norm, image, job relevance, output quality, result demonstrability, and perceived ease of use, which are instrumental in understanding user acceptance of information systems The model's robustness and predictive power have made it a valuable tool for researchers and practitioners in assessing the likelihood of technology adoption in various contexts (Nguyen Hong Anh, 2020)
Source: Viswanath Venkatesh & Fred D Davis, 2000
The Technology Acceptance Model 3 (TAM 3) builds upon the foundational models that explain the factors influencing the adoption and use of technology in organizational settings Introduced in 2008 by Venkatesh and Bala, TAM 3 integrates various determinants of perceived usefulness and perceived ease of use, providing a comprehensive framework for understanding user acceptance of information technology It emphasizes the role of interventions in enhancing IT adoption and utilization, which is crucial for managerial decision-making in IT
18 implementations The model's development was a response to the need for a more nuanced understanding of how different factors, such as management support and peer influence, impact technology acceptance and use (Nguyen Hong Anh, 2020)
Source: Viswanath Venkatesh & Hillol Bala 2008
While the original TAM focuses on two primary factors: perceived usefulness and perceived ease of use, which determine an individual's intention to use a system and its actual usage TAM 2 incorporates additional social influence variables (subjective norm, voluntariness, image) and cognitive instrumental processes (job relevance, output quality, result demonstrability), providing a more comprehensive understanding of user acceptance in the workplace TAM 3 further extends the model by including factors such as perceived ease of use determinants
(computer self-efficacy, perception of external control, computer anxiety, playfulness, perceived enjoyment) and perceived usefulness determinants (objective usability), which offer a deeper insight into the user's interaction with technology
ASSESSING THE SITUATION OF TECHNOLOGY
Introduction on VINARE
The Vietnamese National Reinsurance Corporation (VINARE) is a leading reinsurance corporation in Vietnam, established in 1995 as a state-owned enterprise VINARE provides reinsurance services to domestic and foreign insurance companies, covering various lines of business such as property, casualty, marine, aviation, engineering, agriculture, life, and health VINARE has been listed on the stock exchange for a long time and has become a joint stock enterprise, and based on Article 88 of Enterprise Law No 59/2020/QH14 promulgated by the Vietnam National Assembly, VINARE is not considered partially state-owned enterprises, however with the State Capital Investment Corporation (SCIC) holding 40.36%, Bao Viet Group 9.18%, and Bao Viet Fund 8.019%, VINARE is still an enterprise which the state has the majority of the votes VINARE also participates in regional and international reinsurance markets through its network of partners and brokers VINARE's mission is to contribute to the development and stability of the insurance industry in Vietnam and the region, by providing high-quality reinsurance solutions, enhancing risk management capabilities, and promoting professional standards and best practices VINARE's vision is to become a reputable and reliable reinsurance partner in the global market, with a strong financial position, a diversified portfolio, and a customer-oriented culture VINARE has achieved remarkable results in the past year, despite the challenges posed by the COVID-19 pandemic and the natural disasters that affected the country VINARE's gross written premium increased by 8.7% to reach 2,507 billion VND, while its net profit rose by 17.4% to 255 billion VND VINARE also maintained a high solvency ratio of 236%, well above the regulatory requirement of 150% (VINARE, 2024) VINARE's performance reflects its commitment to delivering value to its clients, shareholders, and employees, as
20 well as contributing to the development of the insurance industry and the economy of Vietnam
However, despite the impressive achievements VINARE contains only over a hundred employees with a small representative office in Ho Chi Minh City together with a head-quarter in Hanoi Still, under the definition of Vietnamese law stated in Decree No 39/2018/NĐ-CP, VINARE still identifies as a large enterprise (Chính phủ Việt Nam, 2018) Below is the strategy table reflecting VINARE’s position on the market during the two most recent terms of the board
2.1.2 VINARE business targets plan and vision for 2030
According to the Annual reports, VINARE has set for itself not small and market-leading goals for its 2025-2030 business goals as follows: “VINARE's business plans and vision for 2030 are centered around providing long-term solutions and services of international quality, supporting the Vietnam insurance industry, and aiming for sustainable market growth with enhanced and stable profitability The company is committed to assuming social responsibility to support the socio-economic development and international competitiveness of Vietnam As a leading reinsurer in Vietnam and the region, and a professional investor, VINARE is actively involved in promoting sustainable development in Vietnam The company aims to deliver optimal benefits to relevant shareholders by improving the efficiency and profitability of the Vietnam insurance market VINARE plays a leading role in progressing a sustained insurance market in Vietnam, with targets such as an average gross written premium growth of 12% per year, an average net written premium growth of 16% per year, and a maximum average combined ratio of 98% Additionally, VINARE aims for a minimum average pre-tax profit growth of 7% per year, a minimum dividend ratio of 12%, and a minimum average return on equity (ROE) of 10% VINARE contributes to the sustainable development of the Vietnam insurance market by raising awareness about insurance, providing reinsurance capacity, and supporting the development of insurance products for a large portion of the population The company resonates sustainable development
21 values to shareholders, employees, the community, and other stakeholders By 2024, VINARE plans to increase its charter capital to VND 2,000 billion The company holds a unique position in the market as the first and national reinsurer, working closely with the Vietnam Ministry of Finance and the Insurance Supervisory Authority VINARE is well-established in Southeast Asia and the international market, with a broad network of international reinsurers, insurers, and brokers Its majority shareholders include prestigious and influential entities such as the State Capital Investment Corporation (40%), Swiss Re (25%), and eight key players in the domestic insurance market (25%) VINARE's experienced, committed, and internationally trained employees emphasize strict compliance with underwriting discipline, risk management, and prioritizing operating performance The company provides training on risk transfer to local insurers, consulting on risk assessment for the domestic market, and bridging the domestic market to the international market VINARE also explores nearby regional insurance markets, supports and collaborates with international reinsurers to develop new products for the domestic market, and hosts workshops, forums, and conferences on various levels of insurance expertise for the region and domestic market Furthermore, VINARE is executing its already built ESG roadmap to further sustainable and responsible growth.” (VINARE, 2024)
As the very first and one of the biggest players in the Vietnam reinsurance market, VINARE has its own unique journey at finding its core technology to manage/access risks as well as building a technology ecosystem to support the corporation mission in long term Building a management technology ecosystem in an enterprise is a complex but rewarding endeavor By adopting a design-led approach that embraces business ecosystems as a source of value creation, enterprises can enhance their customer experience, operational excellence, innovation capability, and competitive edge in a dynamic and uncertain world In the case of VINARE, there is no doubt that the entire technology ecosystem developed around its core business software The next following parts would
22 examine the decisions that were made to shape up VINARE’s digital transformation and technology development strategy To get a clearer, more comprehensive view, and more importantly, a clear assessment of VINARE's technology development strategy Does the corporation have a technology development strategy? How has it changed? And why?
VINARE transformation history
It would take VINARE several years to break out from ancient software to be able to access advanced technology (at the time) To be able to do this, the IT department had traveled aboard for months from time to time with the purpose of fully customizing, gasp the core function of WEBXL, furthermore VINARE had to improvely restructured to work more efficiently with the new software Finally, in
2014, VINARE started to roll out its newer core software with advanced features that has been incubated for years within IT department and the transferor of the technology – a French giant in insurance solutions - Effisoft WEBXL is a software solution developed by Effisoft, a leading provider of insurance management systems WEBXL enabled reinsurance underwriters to manage their contracts, claims, accounting, and reporting in a secure and efficient way WEBXL supported all types of reinsurance, including proportional, non-proportional, facultative, and retrocession WEBXL also offered advanced features such as workflow automation, data analysis, and regulatory compliance WEBXL was designed to be flexible, scalable, and adaptable to the specific needs of each client WEBXL was used by more than one hundred reinsurance companies worldwide, including some of the largest and most prestigious ones
At this time, Vietnam's economic landscape in 2014 was marked by robust growth, driven by exports, foreign investment, and domestic demand According to the General Statistics Office (2015), the GDP rose 5.98 percent, surpassing the government's target of 5.8 percent The economy benefited from the recovery of
23 major trading partners, such as the United States and the European Union, as well as the expansion of manufacturing and services sectors Specifically, the insurance industry is characterized by rapid growth, increasing competition, and product diversification According to a report from Statista, the total insurance annual revenue in 2014 was 55,859 billion VND, with a GDP contribution of 2.1% The market consisted of 61 insurers, including 29 non-life insurance companies, 17 life insurance companies, 2 reinsurance companies, 1 foreign life insurance branch and
12 insurance brokers (Nguyen, 2024) The most popular insurance products were motor vehicle insurance, health insurance, property insurance and damage insurance The number of insurance agents was 294,593 and the number of new insurance contracts was 1,266,800 The insurance industry, on the back of a boom year, was also very healthy, the big players such as PJICO, BAO VIET, PTI etc all had money to blow and were ready to look for a more efficient way to manage their business And more they are ready to collaborate with foreign developers For example: PJICO collaborated with an Indian software corporation to build its core However, with all the opportunities mentioned above, there also were threats
VINARE specifically and Vietnamese insurance industry generally, such as it would take a long time to develop a new core software especially in terms of insurance/reinsurance business, and they would be no guarantee of the software catching up with its time of technology
At the time, VINARE on the other hand had its own difficulties/weaknesses, as it was still the only one of two reinsurance companies within the borders of Vietnam (this stays true until this day) And reinsurance management is complexly different from insurance, therefore it was quite a challenge to find a reliable partner to develop its new core software However, the reputation of VINARE international has always been extraordinarily strong, being the national reinsurance corporation, the strength in financial health and Support and determination from Board of directors Lastly, because of their reputation VINARE was most likely to be able to
24 access proven products in international forums, and most importantly they had the finance to afford those technologies
Considering all the options they had, VINARE carefully picked WEBXL from Effisoft as its new core software because of the Dependence strategy In which, WEBXL had been transferred to VINARE vertically direct from Effisoft in the form of a License Agreement with a one-time payment and maintenance/support/upgrade fee of 200 thousand Euro/year At level 1-2 of technology transfer – Knowledge exchange and turnkey: Effisoft was not only responsible for helping VINARE improve the installation of the entire software operation but also helping VINARE successfully manage, customize, and fix after the product launch While VINARE only needed to adopt the tech and put it into operation
Follow diagrams will demonstrate clearly how WEBXL operating:
Diagram 2.1: WEBXL Contract management module
Diagram 2.2: WEBXL Policy management module
Diagram 2.4: WEBXL module Technical Account (for underwriting accountants)
Diagram 2.5: WEBXL module Financial Account (for accountants)
2.2.2 The gap between WEBXL and ViCore
Before, the core business of the corporation was divided into four underwriting departments, namely the Marine Department, Property Department, Special Lines Department, and Engineering Department These divisions Improvely enforced every aspect of VINARE’s core business, from underwriting in-out contracts to deducting and handling compensation (underwriting accounting) Though the workflow was not suitable for the new core software, VINARE had restructured by splitting underwriting accounting teams from these four departments and creating a new department named Business Claim Administration Department
(BCA) to handle claims and statements of accounts (SOA) The structure has remained unchanged until today
As the diagram suggests, from the point of view of the directors, a single core business software was not enough to satisfy the corporation’s processes, systems, data, resources, goals, challenges, and needs VINARE had multiple standalone functions and applications that were not connected or synchronized, resulting in data silos, duplication, inconsistency, and errors Moreover, VINARE faced challenges in managing its resources, such as inventory, materials, equipment, human capital, and finances Spontaneously, VINARE wanted to automate and optimize its workflows, reduce manual work, and increase operational efficiency, as well as enhance its security and compliance with regulations and standards and improve its decision-making and strategic planning Facing all the needs and challenges, a new project was on the horizon for the BOD and the IT Department VINARE needed an ERP system that can provide real-time and predictive analytics, dashboards, KPIs, and reports that can help the enterprise gain insights into its performance, trends, opportunities, and risks VINARE once again weighed all the internal and external factors together with their strengths, weaknesses, opportunities, and challenges However, this time the technology strategy was different Because of the scale of the organization, self-building and managing the ERP was something possible; hence, VINARE had changed the strategy from dependence to a partly dependence and largely imitative strategy Similarly to
WEBXL, VINARE received a license agreement with a one-time payment and a maintenance, support, or upgrade fee of 14,000 dollars per year for SAP BusinessObject Business Intelligence, a report and business analysis software at levels 1-2 of technology transfer, knowledge exchange, and turnkey And the rest of the IT Department mimicked existing ERP software to cut costs and, more importantly, took the first step in a long journey of mastering the technology as ViOffice officially launched
The honeymoon with WEBXL was too short, as the demand for new technology rose Nowadays in the rapacious capitalist market, the cycle of technology has been shortened more than ever, WEBXL growth too old to satisfy the workload of the corporation In beginning of 2022, VINARE once again needed a new core software that could solve all the puzzle within its operation: manage risk contracts, claims, accounting, reporting in all the types of reinsurance practices and additionally but importantly it needs solve them at the modern speed
On one hand, COVID-19 had posed unprecedented challenges to the global and regional economy, and Vietnam was no exception Despite its success in containing the pandemic and maintaining a positive growth in 2020, Vietnam's economy had faced significant headwinds in 2021 due to the resurgence of COVID-
19 cases and the prolonged lockdown measures According to the Asian Development Bank (2021), Vietnam's economic growth was expected to slow down to 3.8% in 2021, compared to 6.5% projected by the International Monetary Fund in March 2021 The main drivers of Vietnam's economy, such as foreign direct investment, exports, and domestic consumption, had been severely affected by the pandemic The key export markets of Vietnam, such as the United States, China, and the European Union, had also experienced sluggish demand and trade disruptions To mitigate the economic impact of COVID-19, Vietnam had implemented well-targeted fiscal and monetary policies to support vulnerable sectors and households, while maintaining macroeconomic stability and external resilience However, there were still considerable uncertainties and risks for Vietnam's economic outlook, depending on the evolution of the pandemic, the effectiveness of the vaccination program, and the pace of recovery in its major trading partners
The Vietnam non-life insurance market witnessed a strong growth in 2021, despite the challenges posed by the COVID-19 pandemic According to the Vietnam Insurance Association report for Ministry of Finance, the total premium revenue of the non-life insurance sector reached 66.5 trillion VND (2.9 billion USD) in 2021, up 12.3% compared to 2020 The main drivers of this growth were the segments of health, motor, and property insurance, which accounted for 77.4% of the total market share The outlook for 2022 is also positive, as the Vietnam non- life insurance market was expected to benefit from the recovery of the economy, the expansion of digital channels, and the increasing awareness of insurance among consumers The Vietnam Insurance Association forecasts that the non-life insurance
Assessing the situation
As discuss on previous parts, VINARE has been implementing technology strategies in a flexible way based on the time, needs, and internal and external impacts, strengths, weaknesses, opportunities, and challenges at each time to produce appropriate strategies VINARE had, in time, followed the strong digital transformation occurring in Vietnam following the Prime Minister’s Decision No 749/QD-TTg and had successfully implemented a tailored approach to effectively navigate the digital transformation process and achieved certain initial successes However, as it advances in digital transformation with government support, VINARE will still face challenges not only within the corporation but also from external factors as well This part of the paper will delve deeper into the current situation of technology development at VINARE in terms of the staff, experts and managers of the IT department, along with opinions from interviews with VINARE's partners to have a more comprehensive view of the challenges and opportunities that the company is facing and has encountered, plus the author's own experience when working here using qualitative research methods, thereby a relatively accurate conclusion can be drawn on how technology development strategy has been implemented at VINARE In addition, the research also delves deeper into the factors that directly affect employees' willingness to change, and then draws accurate conclusions based on data to create a premise for solutions for the corporation in the next chapter
Approach - in order to explore how technology development strategy was carried out at VINARE, a qualitative research methodology was employed In particular, the author chose to use the technology definition by Assos Prof Hoang Dinh Phi that mentioned in the first chapter as a backbone for this research
Participants - a hundred percent capacity of VINARE IT department – four members (including a manager/a deputy manager and two executives) participated in the research They are all male and have at least 6 years’ experience working at VINARE
Data collection and analysis - an interview in Vietnamese was asked all four of them in private separately by the author, the interview was constructed to obtain honest opinions and specifically exploit their personal experience when they carry out direct actions in the process of implementing the technology development strategy at VINARE One answered the interview via email, the other three answered on tape audios and was transcribed by hand
1 Who are informed about the corporation's Technology Development Strategy?
2 What difficulties and advantages have you encountered in the process of implementing the technology development strategy so far? In terms of hardware? In terms of software? In terms of (training) using technology skills?
3 What competitive advantages does VINARE's current technology have compared to businesses in the domestic market? And internationally?
4 Technology development orientation in the future? About hardware? About software? About (training) technology skills?
5 What competitiveness does that orientation bring to the corporation? In the domestic market? International market?
The first question is to determine whether the technology development strategy and plans are clearly and specifically communicated to VINARE's experts and employees From there, the author can evaluate the level of internal communication about these plans, and then consider adding to the overall picture of whether the technology development strategy is truly optimal and effective The next four questions delve deeper into the technology field, technology development
40 implementation process and future orientation based on Hoang Dinh Phi's theory Thereby the author can collect more objective and realistic information which comes from experts who directly involve and implement technology development strategy This study will contribute a perspective of how VINARE implementing technology development strategy in a technical and step-by-step view
Surprisingly, from the deputy manager level downward, all interviewees confirmed that they were not informed about the corporation's development strategy In addition, the head of the IT department at VINARE confirmed that discussions on technology development strategy at VINARE rarely went beyond the scope of the Board of Directors and the Board of Management, and all subordinates were only given step-by-step instructions
In the second question, on one hand, in implementing the technology strategy so far, at manager level they all agree the difficulty of hardware at VINARE is that currently, the corporation has not focused on replacement, although many devices are old and have stopped being supported by developers, and there are no clear mechanisms or policies in determining the replacement of the above In terms of software, these interviewed subjects believe that because the software is self- developed, thereby there are many complicated cases at many different levels, hence the handling often requires the IT department to have come up with solutions outside of the book, moreover the data of VINARE is diverse and relatively huge They also believe that in term of training on using technology at VINARE, most employees do not read the user manual issued by the corporation, the number of people who read and understand as well as self-implement is very small, so they must guide each person on a specific case At the executive level, their answers highlighted that the department's staff is very thin, so one person must handle many different tasks, leading to overload and not ensuring the quality of the work In addition, the technology system management process is too strict, which creates barriers in handling work Moreover, the creative ideas of the corporation in the
41 field are almost non-existent and poor Training in technology use or technology development at the corporation is also almost non-existent, mainly for employees to learn, research and propose on their own
On the other hand, at manager level the interviewees agree on the advantages in implementing the technology development strategy at VINARE as follows In terms of hardware is that the corporation always uses the latest, synchronous equipment from famous and prestigious brands in the world and these products often have long warranties, support from good manufacturers, and the IT department often recommends buying a configuration higher than the needs of the job, so in terms of hardware devices, they are always guaranteed to be strong and meet the needs of the workload In terms of software, the programming language of VINARE's self-built programs with libraries and modern programming languages (such as java, SQL, angular) For databases and data analysis, VINARE is currently a strategic partner of a major world brand, Oracle In addition, the next advantage in this field is that since 2021, VINARE has cooperated to build software with domestic companies, which creates favorable conditions for exchanging, building, supplementing and modifying improvements Finally, in terms of skills, the self- built core software is 80% similar to the old software, thereby most employees already have muscle memory for operating on the new software As for the executives, they only replied that VINARE's hardware devices were quite redundant, even overbuilt for the job, thereby that could also be an advantage in technology development strategy
To answer the third question, at the managers level the interviewees believe in the domestic insurance/reinsurance market, VINARE has always been a company that promotes office digitalization, leading in the field of self-building and developing core software However, it is very difficult to consider about competing with insurance companies in this field, partly because insurance companies’ organization as well as distribution channels are often many times larger than VINARE, so their models are larger, with more modules, and their infrastructure
42 development goals are also larger Therefore, VINARE’s technology serving daily office work such as meeting rooms, infrastructure, Wi-Fi, communications, and databases are only marginal to the market However, VINARE's self-built software belongs to reinsurance underwriting, which is totally the first in the domestic market because reinsurance management and business are completely different from insurance underwriting and management, which creates conditions for VINARE to be able to open and share its software with the reinsurance department of domestic insurance companies They also intimate that in terms of international competition, Vietnam is still 5-10 years behind the world in general application and technology development in work is still very limited VINARE also follows that situation, for example, Cloud deployment - Big Data application - Remote working, etc
As for the executive level, they have the following comments about the competitive advantages of technology at VINARE: the technology is quite advanced, and they are willing to invest in purchasing hardware and software every year
To answer the fourth question about VINARE's future direction of technology development strategy, there is a certain consistency at both the management and staff levels When managers said that in terms of hardware, the company will have regulations on information security mechanisms, thereby there is a mechanism to purchase related to focusing on replacing depreciated equipment or old equipment that has been used for more than ten years This is a big improvement compared to before when the company did not have these regulations, the replacements only happened when the equipment was broken As for software, the corporation will now focus on improving performance and user convenience because the software is also relatively new Only when deploying a new product has no precedent in the corporation's database, then it is necessary to improve new functions and develop more features Regarding technology training for employees, they will most likely continue to guide people case by case, and issue manual guides whenever there is a new operating system, new interface, etc While the