Vietnam software outsourcing might be small, but it’s mighty!

15 October, 2019 Ha Bui

The success of Vietnam software outsourcing industry worries Indian partners as companies such as Intel, IBM, Samsung Display, Nokia and Microsoft continue to invest in Vietnam.

India has for many years been considered the world leader in business process outsourcing (BPO), but time has changed everything. According to the Nasscom Trade Association, the Indian BPO industry has just witnessed the largest decline in the number of jobs in seven years, while the information technology (IT) unemployment rate has increased for two consecutive years.

While India adjusts to meet demands and expectations, it is time for new areas to emerge as software outsourcing centers.

According to Forbes, Vietnam is known as a small but very powerful outsourcing workshop in Asia – Pacific region. Few believe that Vietnam can become a second Silicon Valley, but the spirit of technology and countless talents make people really think of the beginning of the US technology industry in the past.

The history of IT outsourcing industry in Vietnam

The truth is that Vietnam software outsourcing industry is quite young. More than a decade ago, a number of multinational technology companies like fram^, Intel or Oracle have started exploiting the workforce in this developing technology industry in Vietnam. In addition to developing new policies that attract high-tech businesses, Vietnamese government has invested heavily in STEM education, and as a result, there’s an abundant workforce with excellent technological skills.

Since then, the IT and software outsourcing industry in Vietnam has grown significantly. Vietnam rose five places to the Global Services Location Index, a ranking of outsourcing services from A.T. Kearney consultancy. The success of Vietnam’s IT industry worries Indian partners as companies such as Intel, IBM, Samsung Display, Nokia and Microsoft continue to invest in Vietnam.

The potential in the eyes of foreign investors

Perhaps some foreign enterprises are expecting more solidity from Vietnamese outsourcing service providers. The difference in institutions as well as culture makes them a little bit afraid. However, Vietnam is still considered very suitable for technology working and development.

Vietnam’s economy has changed rapidly. From the foundation of agriculture, Vietnam has now transformed itself into a modern, developed business market.

Vietnam joined the World Trade Organization (WTO) in 2007 and has made a lot of efforts to open the door, making it easier for foreign businesses to access. Investment from abroad helps economic growth, and in the past 10 years, adaptive culture has brought a skilled IT force.

In-house Software Development vs Outsourcing - The Good, the Bad and the Ugly.

Technology experts in Vietnam very quickly become part of the global customer network, ready to challenge the standards and constantly innovate.

Vietnam’s education system is also working hard to ensure that English becomes a second language rather than just a foreign language, sending a strong message that English proficiency is very important for Vietnam.

Also, Vietnamese people are very loyal to the company they are doing. This stems from loyalty to the family. In India, the Philippines or Malaysia, engineers often accept to go abroad to pursue a career, while many Vietnamese engineers often want to work close to home.

Vietnam software engineer resources

Vietnam is working hard to develop a highly skilled workforce to compete with regional neighbors such as Singapore, Malaysia and the Philippines, and commit to higher education and STEM. For example, Cornell University, USA is consulting to develop a world-class university in Hanoi, while Fulbright University will soon open a branch in Ho Chi Minh City.

With an ongoing investment in university-level research and science, Vietnam is ensuring that the majority of university graduates will have STEM degrees.

The gender diversity in technology fields in Vietnam is also impressive. Currently, fram^ is using more female employees than men, and women are leading, advancing on a par with men.

The challenge and opportunity

Viet Nam is currently the IT and software outsourcing center. Vietnam has strengths in: technology, financial services, media, games, software integration. Many businesses are also looking here for emerging trends like AI, machine learning and block-chain at a reasonable cost.

For most businesses, the biggest challenge in Vietnam is to adapt with a team of skilled engineers 5,000 to 10,000 miles away. The only way is by training and connecting. Training a remote team in the way that internal staff members are trained will lay the foundation for success, creating a unified process.

This requires setting up a communication system regardless of time and distance, and teams will be working smoothly and coordinating effortlessly. It is important to take advantage of time zone differences to create productivity advantages. The advantage of outsourcing in Asia-Pac for western businesses is the nearly 24-hour production cycle.

While India is facing a number of difficulties, regions like Vietnam are continuing to grow. As with other hotpots other than Asia-Pacific such as Cambodia and Thailand, Vietnam needs to actively train its talents.

Sustainable government investment in STEM education and the expansion of multinational corporations will boost both the workforce and the Vietnamese market.

Founded in 2013 with just a small team of developers, fram^ team has grown into a team of over 130 digital talent working under one goal: to help businesses around the world with premium software outsourcing services to build their custom software at the best price and quality.

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