Strategic cooperation between Hoa Phat Group and CMC to promote comprehensive digital transformation
The steel giant transforms
Hoa Phat Group was established in August 1992 as a company specializing in trading construction machines. After nearly three decades of development, in 2020, Hoa Phat is one of the largest private corporations in Vietnam, operating in four main areas: Iron and Steel, Steel Products, Real Estate, and Agriculture. In early 2021, Hoa Phat surpassed Formosa to become the largest steel manufacturer in Vietnam and Southeast Asia with the output of 2 million tons of crude steel. Despite many difficulties due to Covid-19 pandemic, the profit after tax of Hoa Phat still reached over 13,500 billion VND in 2020.
Going strong with great success, Hoa Phat Group is still facing the challenges of Industry 4.0.
At the end of 2020, phase 1 of Hoa Phat Dung Quat project began to exploit the plant's maximum capacity. However, Hoa Phat's plant still maintains many manual steps, which have not been fully digitalized, leading to the inconsistency between production lines and products. In addition, an IT system has been invested in by the Group, but has not been synchronized and optimized to fit one of the largest steel factories in Vietnam.
Hoa Phat Group digitally transforms to build future competitiveness.
Hoa Phat is faced with two choices: Expand or compress, and how to build competitiveness in the future. To accommodate the changes in business model, Hoa Phat Group launched a strategy to build competitiveness based on digital technology.
The Group will change the IT governance model towards being lean and efficient, and ensuring to achieve strategic goals. In addition, to develop the business, it is necessary to make the process transparent and scientifically connected to the global logistics chain. Internally, the Group will focus on automation and professional operation management by data.
The handshake between the steel giant and CMC Corporation
At the end of 2020, Hoa Phat Group signed a strategic cooperation agreement with CMC Corporation to build a comprehensive digital transformation roadmap. The project lasts half a year with the aim of helping companies and the steel manufacturing business of the Group to digitalize production and business processes.
Regarding the selection of CMC as the strategic consultant, a representative of Hoa Phat affirmed that CMC has more than 28 years of experience in the field of information technology and has executed many projects in different industries. The firm is also a reputable partner who has carried out many IT projects for Hoa Phat. CMC spent a lot of time to learn about business activities and operations, as well as the IT system of Hoa Phat, and is trusted by leaders of the Group.
Hoa Phat Group selects CMC as the strategic consultant for digital transformation due to its confidence in the technology capacity and experience of CMC.
In addition, CMC's various solutions and services, from infrastructure, security and applications to new technologies (Big data, IoT, automation, ERP, supply chain management, etc.) will meet the needs for transformation in terms of operation, management and business of Hoa Phat Group. As a certified partner in Vietnam of many technology giants, such as IBM, Microsoft, Oracle SAP, etc., CMC ensures to support customers to access the most advanced technologies and solutions.
A professional digital transformation roadmap for Hoa Phat
According to Mr. Luong Tuan Thanh - Chief Technology Officer of CMC Corporation: "To solve Hoa Phat's operational problem, CMC has a scientific methodology based on the viewpoint of: Outlining a long-term, feasible and practical vision, suitable for steel manufacturing and heavy industry, and towards the model of multi-industry company".
"CMC has focused on synchronizing the digital capacity building strategy with business strategy and activities; at the same time, we will also identify, select and evaluate some initiatives that can be prioritized to implement following the formula of: Increase revenue, reduce costs, optimize assets and limit risks", said Mr. Thanh.
Hoa Phat is a multi-industry group, so for a comprehensive transformation, CMC proposes to form a dedicated team to work with key stakeholders in order to reach consensus throughout the Group at all times.
Accordingly, the transformation roadmap is divided into three phases: Phase 1 focuses on building the foundation of technology and governance; Phase 2 focuses on effectively exploiting digitalization for operation and production with excellent user experience; and Phase 3 gradually helps Hoa Phat's leaders to comprehensively manage activities using data, and expand the management to other business areas.
Digital transformation helps Hoa Phat change its IT governance model towards being lean and efficient, ensuring the achievement of strategic goals in the future.
The digital transformation in operations will create new channels of interaction between agents and the Group to automate the ordering process, track delivery of goods, and increase customer experience. Board of Directors of Hoa Phat Group will also better understand how to apply information technology solutions to corporate governance so that the management and administration apparatus works effectively.
“Hoa Phat transforms to improve efficiency and develop, thus create new values, enhance customer satisfaction and find new markets in an easier, more widely and faster manner. The direction consulted by CMC will help us cut costs, control risks, and improve work and business efficiency”, said Mr. Tu Thanh Hai - Head of IT Department of Hoa Phat Group - Head of Digital Transformation Project.
According to Mr. Luong Tuan Thanh - Chief Technology Officer of CMC Corporation, to solve the operational problem of Hoa Phat, CMC has a scientific methodology and a methodical roadmap.
“During 6 months of the project, CMC worked with the spirit of understanding and accompanying customers. There have been many heated discussions between the two companies to reach consensus. The process of consulting for customers is also the process of self-learning and self-improvement of our technology capacity", said Mr. Luong Tuan Thanh.
During the assessment of Hoa Phat's IT infrastructure, in addition to directly surveying the system's quality, CMC also coordinates and guides the customer to use automation tools for quantitative assessment in order to get the most accurate results. CMC is committed to accompanying Hoa Phat Dung Quat factory in ensuring the stability and safety of the plant's IT operations within two months after the consulting project ends.