We live in the globalization age when nothing is constrained to a single nation. Many businesses have people working on the same product and project in multiple places worldwide. Top companies have widely adopted this tactic, especially during the lockdowns caused by Covid-19. And it didn’t take long for everyone to realize how effective remote working can be as some companies have already let their staff work from home permanently.
- Dropbox will let all employees work from home permanently. Existing office space will become Dropbox Studios, where people can work in person.
- Atlassian employees can work from home permanently.
- Quora has adopted a remote-first policy, allowing nearly all employees to work remotely and relocate anywhere the company can legally employ them.
IT Outsourcing and Software Development Companies can easily accomplish this since it is unnecessary for all programmers working on the same project to be located in the same area. They can easily update the code and share their progress with the rest of the development team. In 2022, IT Outsourcing to Vietnam is gaining recognition as a cost-effective, high-quality software development solution in Asia.
1. Why Would Business Choose To Outsource?
|Provide access to skill not available in-house||46%|
|Free up resources to focus on core business||35%|
|Adds scale to my IT organization||33%|
|Improve flexibility in use of resources||29%|
|Improve ability to innovate||10%|
Top reasons why companies outsource information technology (IT) services worldwide in 2018. Provided by Statista
Compared to onsite jobs, those new to outsourcing will be worried that overseas companies cannot deliver high-quality work, collaborate with onsite teams, or reach defined milestones and objectives with the same aptitude and excellence. In addition, language barriers, difficulty establishing and maintaining communication, and other issues can make outsourcing seem too risky.
However, many outsourcing firms concentrate not only on providing low-cost solutions to their customers but also on ensuring that these solutions are of the highest standard, adhere to strict specifications, deliver utmost commitment, and meet all deadlines.
Asia, Eastern Europe, Latin America, and North America are common destinations for offshore software production. In terms of Asia outsourcing, India and China, to many, still hold the top two spots as the world’s most dominant outsourcing destinations. However, among Asian-Pacific countries, Vietnam, an emerging powerful IT outsourcing and offshore development center, is getting noticed day by day.
Despite Vietnam’s relatively short history of IT outsourcing (roughly 20 years), the country has risen to prominence in the sector, becoming the natural extension of global clients due to many inherent capabilities and transformations. According to the 2019 Tholons Services Globalization Index, Vietnam is ranked 13th among the world’s top 50 digital nations.
2.1. Young Population & Education Level
Vietnam Level of Qualification
The primary benefit of outsourcing to Vietnam is the country’s youthful population. In Vietnam, approximately 70% of the population is under 35, and roughly 45 percent is between 15 and 35. This advantage in terms of age suggests that about half of the population is ready to work.
According to TopDev’s report, Vietnam has about 400.000 IT Enginners and over 50.000 graduated IT Students from over 153 IT Institutions per year.
- Vietnam ranks 29th in terms of Skillvalue Worldwide in Developer Skills Chart Of Skill Value Report in 2018.
- Top 06 worldwide in Developer Skills Charts Of Topcoder Report in 2016.
- Rank 23rd worldwide in Developer Skills Charts of Hackerrank’s Report in 2016.
Soon, Vietnam will be the destination for many significant technology corporations in the world. For example, apple’s supply chain Vice President Rory Sexton said Apple is ready to meet up and find opportunities for future cooperation with Vietnam ICT enterprises wishing to join Apple’s supply chain. Besides Samsung – one of the foreign capital corporations that help accelerate Vietnam’s economy, the participation of Apple in the future probably will continue to strengthen Vietnam’s wave of foreign investment in 2020. Notably, in 2020, Samsung said they would invest an additional $300 million in R&D in Hanoi and needs 4,000 more IT employees in the near future.
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2.2. IT Specialized Schools
MoU Signing Ceremony between Savvycom & RMIT University Vietnam
MoU Signing Ceremony between Savvycom & Phenikaa University – On providing training & higher education for IT Graduated Students
|Passion for technology, programming & computer||78%|
|Good logic & computer background||54%|
|Prospective career development||42%|
Why Would Vietnamese Students Choose To Follow IT Career
Companies looking to outsource software development want graduates with a specialization in information and communication technology. In the field of information and technology, there are over 250 colleges and universities that offer courses. In addition, 187 technical schools deliver courses in Information and Technology.
Thus, students can learn about subjects that will aid them in pursuing a career in software development. As a result, as more businesses outsource to Vietnam, more students will choose to pursue a career as a software developer.
Most candidates choose to follow the programming industry because of their interest and passion for it. What makes them feel most satisfied is that they can be trained and have the opportunity to develop their skills. Career path and salary are also two key factors fulfilling candidates’ satisfaction.
2.3. Low Development Cost
According to MarketsInsider, Vietnam is ranked 5th in the “Best countries to outsource to in the World in 2019” list. Depending on the developer’s skillset, hourly rates for Vietnam developers range from $20 to $40. Compared to the $100 hourly rate in developed countries, this represents significant cost savings for US and Western European businesses.
Furthermore, many Vietnamese IT & Solution Providers are now open to potential innovations such as AI, machine learning, and blockchain… As a result, Vietnam is the ideal location for companies seeking cost-effective solutions that are also technologically advanced.
2.4. Vietnam’s Stability During Covid-19
Vietnam is by far one of the best countries in the world to handle the Covid-19 situations thanks to the swift actions taken by the Vietnamese Government. As a result, heading into 2021, most Vietnamese Tech Companies don’t have to resort to work from home anymore, which significantly boosts work enthusiasm and communication.
Additionally, Vietnam does not have any instability politically for more than 30 years with the same party in power. The country still retains steady economic growth even during Covid-19 (2.9%).
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2.5. Big Investors
According to the World Bank, Vietnam is now one of the most thriving emerging economies in East Asia. Vietnam has achieved sustainable and inclusive economic growth thanks to comprehensive market-oriented and outward-looking economic policies. On the human capital index (HCI), this country ranks 48th out of 157 countries, second only to Singapore in ASEAN.
Many foreigners fear the communist political system’s rigidity, but it is the firm foundation for this fast-growing economy, as well as a stable and safe nation. The Vietnamese government is working to make the economy more modern and business-friendly. Foreign investment is welcomed, making it simple for foreign businesses to set up shops in the country.
2.6. Cutting-Edge Technology
Vietnam – one of Asia’s fastest-growing economies – is making its mark on a global stage in terms of technology. The country is leading with several cutting-edge technologies, such as Blockchain, IoT, AI & Machine Learning, Cloud Computing, etc. Vietnamese IT Outsourcing Companies can adopt whatever technology your businesses want to apply. This can be achieved thanks to the technical expertise through studying and the hands-on experience working on complex, large-scale projects accessed by millions of users worldwide.
2.7. Highly Proficient in English
Unlike other countries in Asia, such as Thailand, India, China, Korea, Japan,etc. Vietnamese uses the Latin alphabet, just as English does, making it relatively easy for Vietnamese speakers to learn English. As such, English is the second most popular language in the country, and most of Vietnam’s college graduates have high proficiency in English. Consequently, most IT workers in Vietnam can communicate easily in English when working on outsourcing projects.
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3. How To Choose The Right Vietnam IT Outsourcing Provider?
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With the growing number of software outsourcing companies in Vietnam, finding the right one for your company could be difficult. Therefore, it’s essential to have a clear picture of your software development priorities, performance indicators, and growth expectations before deciding on potential outsourcing vendors in Vietnam. Some of the most important factors to remember are:
- Sufficient/Fluent English and communication skills
- Knowledge and industry experience
- Developers’ expertise in the required technologies
- Quality standards
- QA and testing
- Pricing model and software development methodology (e.g. Agile)
Overall, it’s preferable to work with a firm that already has an established software development framework in place and clarity and flexibility in terms of project changes.
4. Final Thought
IT Outsourcing is the best option for those who want to balance high-quality service and a reasonable price. If you’re a startup or a well-established business, the global outsourcing industry will help you transform your ideas into reality. You could find Vietnam as an emerging and trusted hotspot for offshore software growth, taking advantage of the geography, the nature of the talent pool, and the cost-effective rate.
Savvycom – Your Trusted Tech Partner
From Tech Consulting, End-to-End Product Development to IT Outsourcing Services! Since 2009, Savvycom has been harnessing the power of Digital Technologies that support business’ growth across the variety of industries. We can help you to build high-quality software solutions and products as well as deliver a wide range of related professional services.
Savvycom is right where you need. Contact us now for further consultation:
- Phone: +84 24 3202 9222
- Hotline: +84 352 287 866 (VN)
- Email: [email protected]
Significant advantages of IT Outsourcing include scalability, more robust disaster recovery, more accessible experts with the required skill and experience, lower costs, and being able to focus resources on core business development.
- Google: Google started as a simple search engine but has since become a massive organization offering hardware and software services in addition to its advertising services with employees distributed around the world. Today Google is almost a proverb for the internet itself. Its name has become a verb used by everyone when talking about searching online.
- Alibaba: When talking about online eCommerce firms, several names come to mind. You have Amazon and eBay, of course, but a company that has quickly come to the fore is Alibaba. Alibaba is another example of companies that outsources. Still, unlike Amazon and eBay, Alibaba is based in China, which makes the challenges of outsourcing somewhat different.
- WhatsApp: When thinking about companies that outsource, WhatsApp is an excellent example of outsourcing as it has been doing it from the very beginning. As early as 2012, WhatsApp was a small organization with only 30 full-time employees and five part-timers. Based out of Mountain View, California, they understood that they needed to keep costs down if they wanted to grow.
- Apple: However, while Apple designs excellent products, it does not make or manufacture them all by itself. Apple is another example of a company that outsources. It depends on multiple partners in the US, Asia, and the Far East to produce hardware and services. In some cases, these relationships go back decades. By outsourcing its supply chain and manufacturing facilities, Apple can focus on its core strength – designing great products that people like to use.
At Savvycom, we recommend mapping out your Outsourcing strategy before reaching out to vendors. Currently, these are the 03 most popular IT Outsourcing Models: Full Process Outsourcing, Dedicated Teams, and Staff Augmentation.