Aside from double big IT outsourcing zones like China and India, our country is the new developing destination attracting more attention to some international businesses. Getting a wide range of unfair benefits, Vietnam has taken the lead ahead of software development centers’ potential area. In Vietnam, outsourcing is a growing business, with the IT outsourcing industry expected to increase by 13.47% by 2027.
Affordability and a vast pool of IT talent are two of the main reasons the nation draws global leaders seeking cost-effective solutions to manage their staff. As promising as it appears, there are several factors for CXOs to consider when recruiting for the first time from a foreign nation such as Vietnam. As a result, the purpose of this essay is to provide you with the most unbiased information regarding outsourcing in Vietnam, including all of the benefits and drawbacks you should be aware of.
1. Introduction to IT Outsourcing in Vietnam
Vietnam's IT industry is expected to generate 136.1 billion dollars in sales by 2021, more than tripling its 2016 figure. Furthermore, given Vietnam's developing status as an APAC technology hub, large tech giants such as Intel, IBM, Samsung Display, Nokia, and Microsoft have invested in the nation. All of these accomplishments have aided Vietnam's rise as a top location for IT outsourcing.
More specifically, the country ranks sixth in Kerney's 2021 Global Service Location Index. This index measures a country's capacity to outsource software based on a variety of characteristics. These can include financial attractiveness, talents and availability, business climate, and digital resonance.
2. Fabulous statistics about the new IT outsourcing location in Vietnam
Based on the Vietnam software or IT services bureau, the development of the IT outsourcing industry is the exponential ratio (until 30% ratio per year through the ten years cycle).
One of the critical competitive elements for switching our country to an appealing market and a positive IT outsourcing location is the low-expense and well-qualified workforce.
Simultaneously, Vietnam’s residents are more than 98 million individuals, and nearly 70% are even in the labor force. It shows that the nation owns a high potential to supply a skillful IT worker force for the competitive market.
Apart from it, our national government supports the engineering industry to approach more than two million developers by 2020.
2.1 Hiring development outsourcing firms in Vietnam is less expensive than in China or India
Currently, India and China are the market leaders in terms of outsourcing development firms. The Vietnam market began to emerge as a new outsourcing location. Offshore projects include:
Services for web applications
Applications for mobile devices
Automation of Artificial Intelligence
Digital Transformation, for example.
Because Vietnam is becoming known as a high-quality software manufacturer in Asia. According to CIO magazine, software development outsourcing in Vietnam is around 90% less expensive than recruiting US employees. In comparison to India, software development outsourcing in Vietnam is one-third to one-seventh the cost. These are the stats international firms are seriously evaluating when deciding where to locate their offshore software development in Vietnam. When the Indian and Chinese markets reach the mature stage, the cost of processing tends to rise. Outsourcing to Vietnam is significant for businesses trying to develop in the most cost-effective manner. Vietnam ranks 20th among the top countries identified as excellent outsourcing locations in the Global Service Location Index 201.
International businesses could realize language proficiency as a critical element to enhance operational efficiency. To boost the plants to the new IT outsourcing location around our country, some of Vietnam’s organizations usually specialize in enhancing and being well-qualified with customer languages. Because Vietnamese, like English, is written in the Latin alphabet, native Vietnamese speakers find it far easier to learn English than speakers of other Asian languages.
English is the country's second most frequently spoken language, and many of Vietnam's college graduates are fluent in it. According to the EF English Competence Index 2020, Vietnam ranks 13th in Asia and 65th overall in English competence. As a result, 90% of IT workers in Vietnam working on outsourcing Vietnam projects can converse in English at an intermediate or higher level.
The key component of customers can be English or Japanese-speaking nations, so it is good to understand one of them to obtain a great job with a higher salary and a wonderful working environment. Thus, it is seen as the platform for Vietnam’s programmers and engineers to study more or use English.
2.3 Availability of trusted outsourcing companies
In Vietnam nowadays, you may find a large range of software outsourcing services. Many people all around the world are looking for a reputable service provider with a proven track record. Vietnam is home to various prominent service providers, like Innotech Vietnam, which has customers in several countries, including the United States, Australia, Singapore, Japan, and others.
Leading software outsourcing businesses in Vietnam provide high-quality offshore software development services at remarkably low costs. They provide high-quality bespoke software development, software outsourcing, web application development, mobile app development, and UI/UX design services.
Customers are satisfied with IT outsourcing services, in which Vietnam’s vendors offer different technologies or alternatives to optimize the campaign’s requirements or the control to make them within budget.
On the contrary, a shortage of experience with code reviewing or test cases might be a big gap that they want to handle if they do not want to cause late deliveries to the customer.
2.5 Government Stability
Vietnam’s regarded as one of the most politically stable countries in Southeast Asia, with little conflict in religious issues. The stable society, paired with a friendly government, has earned the country a global ranking of #29 in Open For Business. This makes it an attractive choice for businesses wishing to avoid risks connected with unfavorable social conditions.
There is no ethnic or religious strife in Vietnam. Almost 95 percent of the population is ethnic Vietnamese, while more than 80 percent has no recognized religion. As a consequence, Vietnam is devoid of the social and religious tensions that afflict other outsourcing locations. In these days of rising security worries, it’s worth mentioning Vietnam was named the safest country in Asia in 2002.
When evaluating IT outsourcing locations in Vietnam, it is essential to carefully consider various aspects, including crucial skill sets such as business skills and working attitude. These factors play a significant role in uncovering the secrets behind successful IT outsourcing ventures.
In terms of technical skills, Vietnam's engineering facilities have shown proficiency in adapting to state-of-the-art technologies, such as Blockchain and IoT, which are pivotal in the era of innovation. With the support of these advanced technologies, the efficiency of the plants can experience a significant boost, ensuring they remain at the forefront of technological advancements. The ability to adapt and leverage these cutting-edge tools positions Vietnam as a competitive player in the IT outsourcing industry. By harnessing leading technologies’ power, the country's engineering workforce can deliver exceptional results and meet the demands of global clients.
2.7 Business environment
Since its centrally planned economy was reformed through "doi moi" thirty years ago, Vietnam has experienced a free market. Today, Vietnam's policies foster a friendly and inviting climate for international investment. Along with the FTAs signed with the EU in 2019 and the successful containment of the Covid-19 pandemic, Vietnam has attracted a massive influx of investment from international technology giants and manufacturing groups, most notably Apple, Canon, Microsoft, Nokia, Intel, LG, and Samsung. Not to mention that other IT companies from Japan and Hong Kong are looking to set up shop in Vietnam, according to Savills Vietnam research.
2.8 Campaign management
In this branch, our country owns great leadership or other skills. Thanks to internal campaign management operations, some campaign managers can do their projects in assessment and even in order.
When the campaign produces some problems, it shows that project bosses might not precisely evaluate the effort needed so the project could not optimize the deadline.
As for huge Vietnam software outsourcing plants, scalability could be a problem they might note. In other cases, scaling up might be super difficult for them, particularly for other niche requests from customers.
Vietnamese software outsourcing facilities are prioritizing substantial investments to ensure a highly secure working environment. However, they may encounter challenges with internet connectivity, primarily stemming from disruptions caused by breaks in submarine cables operating across the oceanic region.
Despite the efforts to fortify security measures, the impact on seamless online operations caused by these cable interruptions remains a concern for Vietnam's outsourcing industry. Adapting to evolving circumstances and exploring alternative solutions will be crucial to maintaining uninterrupted workflow and sustaining the country's reputation as a reliable outsourcing destination.
After reading this article, you can gain a deeper insight into hiring outsourcing development plants around Vietnam. On the other hand, our country’s renting cost is lower than opponents such as China or India. Finally, we hope that all of you could look for better outsourcing ways one day.
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