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IT Outsourcing Vietnam – Ideal Destination For Growth Hacking

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%
Saves money 36%
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.

Savvycom Web CTA 12. Why Would Business Choose Vietnam for IT Outsourcing?

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

Junior 42%
Middle 33%
Senior 17%
Lead 8%

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.

Learn More On: Full Guide Of IT Outsourcing Models

2.2. IT Specialized Schools

MoU Signing Ceremony between Savvycom & RMIT University Vietnam

Savvycom Phenikaa University 1

MoU Signing Ceremony between Savvycom & Phenikaa University – On providing training & higher education for IT Graduated Students

Passion for technology, programming & computer 78%
Attractive salary 63%
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.

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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%).

Learn More On: IT Outsourcing Costs

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.

Learn More On: Software Project Estimation: The First Step To Success

3. How To Choose The Right Vietnam IT Outsourcing Provider?

Savvycom presents – The Art of Coding – Meet The Artist Behind The Code

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.

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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.

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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:

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  • 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.

Opportunities and Challenges in Vietnam Mobile App Industry

Life is all about fulfilling the needs and creating things to fulfil the needs. Even after years of civilisation, that primitive rule remains the same – the only difference shall be what our demands change into.

With the now-going penetration of smartphones to every corner of the world, including Vietnam, the basics then shift from eating, sleeping and drinking to clicking, surfing and scrolling.

Within the national border, many endeavours have been given on fertilising the Vietnam mobile app industry to satisfy this need-of-a-time. However, the development always goes with adversities, therefore, poses many “Whats” on those opportunities and challenges.

opportunities and challenges in Vietnam mobile app industry by savvycom

Vietnam mobile app industry finds both opportunities and challenges.

Overview

Industry introduction

With the rocketing consumption of smartphones in this 4.0 generation, mobile app production has escalated to a million-dollar industry. Complex as it may sound, the success of the mobile app industry is actually very easy to reason: its core competency to fill in what customers lack.

Mobile apps are outstandingly convenient, user-friendly (light-weight, portable, simple and having transparent interfaces that are optimised from other PC or laptop apps). They also make our smartphones more entertaining, more “edgy”, more multitasking, therefore, more valuable.

In short, they meet every criterion of the so-called 3F, the ultimate expectations of customers: fast, fun, fabulous. No wonder why the mobile app business rocks!

Vietnam mobile app industry in a nutshell

mobile app industry in a nut shell by savvycom

Demographic landscape

The latest report from Appota shows the demographic profile as 97 million of population, therein 70% are the working-age, 24% are millennials, 40% are under 25 years old. These figures show that Vietnam population are quite young and dynamic, thus are likely to be open-minded, tech-savvy and willing to try the new.

Moreover, the report indicates that the percentage of internet users in Vietnam exceeds 57%, with 45% of which are using mobile internet and 70% of mobile internet users subscribe to 3G/4G.

Economic and technological situation

Vietnam, for better or for worse, is still a developing country. As a result, it’s pretty open to forces from various industries in order to boost its pace.

Moreover, because Vietnam is still in progress, its resources are highly focused and flexible to be seeded, to change and nurture. Some indicators might be:

  • The number of technology companies is exploding (14,000 companies as reported in 2016. It shall be a lot higher lately).
  • Aggressive investment in telecommunication, therefore, quickly put the population under the 3G/4G coverage as calculated above.
  • The dramatic rise of smartphone penetration (smartphone sale accounts for about 90% of the mobile market in Vietnam).
  • The focus on technological ecosystems that uniform every user action.

Political environment

The political environment in Vietnam is sort of expansive in this matter, such as the government’s encouragement upon technology development. However, in Vietnam, there are lots of legal loopholes when it comes to companies’ intellectual property – the bloodline of every business, especially technology companies.

The national law poorly covers the deep-rooted aspects of the patent right, copyright, etc, the political forces perform unfavourable management and the majority of the population often ignores the originality of products consumed as well as carry out the low level of law compliance.

Cultural shape

As Vietnam is striving to become one of the leading countries in South-East Asia, the hustle bustle lifestyle is becoming part of common sense. Therefore, the Vietnamese now want things to be simple, time-saving and effortless.

Besides, Vietnam is currently in an “ape generation”, where people are being trend-washed and unselectively chasing after trend. This is a double-edged knife, which poses both chances and threats.

Other factors of the culture might be Vietnamese cash-consuming society, i.e, mainly use cash for purchases rather than credit; or the growing digital, tech-savvy aspect among Vietnamese people nowadays.

Vietnam mobile app industry in a nutshell by savvycom

Opportunities for Vietnam Mobile App Industry

Enterprise solution apps

The characteristics in Vietnam technological and cultural landscape are suitable for various types of mobile apps, including enterprise solution ones. With enterprise solution apps’ tendency to build technological ecosystems, i.e, a common platform to connect everything from TVs, PCs, laptops, tablets, smartwatches to smartphones, the efficiency will be maximised.

Users can now keep track of their documents, locations, and all other information whenever and wherever they wish to without using the same device as when they save the information into. It’s fast, convenient and very time-efficient, which totally fits the busy lifestyle in Vietnam.

Moreover, as mentioned in the overview, Vietnam is highly encouraging manufacturers to develop the whole ecosystem so there might be lots of support from the government and stakeholders on the resources needed.

E-commerce apps

During primitive times, humans’ needs can only be met in physical ways: to book a hotel room in person, to arrange a date in person, to shop in person. However, these days, those demands can be satisfied in just a click with you staying at your post or lying in your bed through e-commerce apps.

Vietnam has lots of internet users and is currently under good accessibility to 3G, 4G thanks to its concentration to telecommunication. This is a chance for e-commerce app developers to build and utilised online platforms to serve customers’ needs.

On the other hand, since Vietnamese are junkies to smartphones and are inclined to trend – they ceaselessly look for the latest items, the most up-to-date vogue – they’d probably like to use an e-commerce app to keep track of what’s hot. That’s another reason making Vietnam the ideal market for mobile online trading, e.g, e-commerce apps.

Trendsetters

Vietnam, a country of trend-wash, is likely to follow every new thing setting out there. They are driven by changes and would open up their heart for whatever pops up first on the trending bars. From the social aspect, it might pose a crucial cognitive problem.

However, from the managerial point of view, it’s one hell of a chance for innovation and creativity: there would be less pressure on customer reception. Also, the innovation level in Vietnam is not so high and yet to be saturated, so there are still lots of space for mobile app developers to showcase.

All of those make Vietnam an easier-to-breathe market when it comes to “trend-making”. If you are able to present something new, chances are you will win in an easier way than that in other countries.

Vietnam has not only a prosperous market for trendsetters but also great developers to come up with new trends.

Let’s take a look at Savvycom, an agile development team from Vietnam. Recognising the rising cost in health care services and the poor accessibility to medical professionals that are in sharp contrast with the rising demand from patients, Savvycom’s engineering team gave birth to Jio Health, a cost-effective, smart-engaging telemedicine and telehealth solution helping patients access to medical professionals in no time.

This project has not only breathed new, innovative, healthy air in the Vietnamese community but also shed light on a new era for mobile app in Vietnam – the time of telehealth. Thanks to those “wow” factor Savvycom embedded into Jio Health, it has become a real pioneer and succeeded in the Northern region of Vietnam, evidencing for Vietnamese developers’ capacity to be ‘real’ trendsetters.

Challenges for Vietnam Mobile App Industry

Besides those many perks, there are some restrictions and challenges you might face when joining the mobile app game in Vietnam.

In-app purchases

Vietnam once mentioned above, is a cash society. According to Appota’s research, nearly half of the population (46%) say they don’t want to use mobile payment because they don’t have a bank account, and concerns about losing banking information. They prioritise the power of cash rather than any type of credit and are often hesitated to make online payments. This poses a problem to in-app purchases as manufacturers must not only promote the product but also educate users on using e-banking for purchases as well as gain trust from the users.

That’s being said there will be a larger budget, heavier marketing and HR pressure to look for quality marketing specialists. Lots to concern!

Retention rate

Vietnamese are willing to try the new and follow the trend, which means there is a high likelihood that they leave. To keep them stay, manufacturers must simultaneously give out new ideas and changes in business activities as well as new product premiers.

If you are not sure about your level of innovation, you would have to think twice about your decision to enter the mobile app industry in Vietnam. The probability that you lose because of poor innovation in Vietnam is higher than in many other countries in the world.

Intellectual property protection

The legal wall in Vietnam is not well-built and well-protected by the government, moreover, intellectual protection is often ignored by the majority, so in case there is any violation of patent or copyright, chances are you have to fight by your own feet.

Overcome Challenges

There are various ways you can do to tackle those challenges, such as building an effective and collaborative R&D team to understand the market and prepare for the product line or outsourcing a proficient, well-trained native team who understands the domestic landscape well.

In case you need any further consultation and cooperation on the Vietnam mobile app industry, we – Savvycom are very happy to give you a hand.

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