In June 2020, the Prime Minister has approved the plan for National Digital Transformation Program to 2025, vision to 2030, in which education is one of the most prioritized domains. In this program, higher education takes the pioneer mission to accelerate innovation process, enhance education quality, actively contribute to the nationwide digital transformation. This article researches the meaning of the term “digital transformation” and its impacts, as well as analyzes the application of digital transformation in higher education, in relation to the traditional higher education in Vietnam, in order to understand the insufficiencies of the current model of education and the needs of applying digitalization. The article also names the challenges that education institutions must face when bringing this plan to reality. Defining these challenges is a prerequisite of providing solutions and building the strategy, to ensure the success of digital transformation mission in Vietnam higher education.