Vietnam IT outsourcing – Opportunity or Challenge?

explaination if vietnam it oursourcing market is challenge or opportunity

India and China have been two most well-known hotspots for any foreign technology company to get outsourcing IT support. Besides, Vietnam has managed to catch up and draw comparative numbers of businesses’ attention looking to their needs in recent years. Nowadays, more and more businesses notice Vietnam IT outsource for its groundbreaking growing IT infrastructure.

explaination if vietnam it oursourcing market is challenge or opportunity

Vietnam as an IT Outsourcing Destination | Source: Savvycom.

Vietnam IT Outsourcing – how cost is reduced?

Reducing cost is one main factor for Vietnam IT outsourcing’s appeal. To hire labour here, it doesn’t cost you much. The cost of labour is just about one-third of the cost of labour in India.

People are young, enthusiastic about the work they are assigned. educated talent pool. About two-thirds of the population is under the age of 30

Vietnam seems to be an attractive destination to invest if you introspect other factors like wage inflation, salaries, real estate costs… Moreover, with 30-50% less in terms of cost of operations than India, many companies now are seeing Vietnam as a great potential outsourcing place.

Workplace loyalty in IT field in Vietnam

Loyalty Workplace

Vietnam staff in IT companies are loyal, creative, committed and hard-working | Source: the Internet.

If labour cost is what attract foreign businesses outsource to Vietnam, workplace loyalty is a crucial thing they want to invest in the long term. It seems to be a characteristic of Vietnamese culture, influencing attrition rates. According to remoteresources.com, this rate in Vietnam is just between 6 and 8%, compared to this rate in India at about 20%.

Moreover, Vietnamese talent in the software development industry is prestigiously valued for their hard-working spirit, flexibility and adaptability to the fast-changing environment.

The large talent pool for the software industry

  • According to the research of World Economic Forum in 2015, Vietnam is in the top 10 countries with most engineering graduates
  • Supply will continue to exceed demand for many years. Many start-up companies in e-commerce, Fintech, payment solutions, online lending platforms, blockchain and similar fields offer many jobs for technology talent with high salaries. Overall, it appeals more and more students to get into these attractive fields. They keep improving their capacity to meet and overachieve companies’ requirement to get higher and higher wages.
  • Nearly 130,000 Vietnamese students are studying abroad: 6th in the USA, 5rd in Australia, 2nd in Japan (Australian Embassy Vietnam, University World News, Japan Student Services Organization)(JASSO, 2017)

In addition to many other appealing factors below, big corporations such as Microsoft, Samsung, LG, and Intel decide to invest heavily in operations in Vietnam.

Growing IT Infrastructure

Although IT outsourcing in Vietnam is quite new, its significant growth proved that this country is a promising potential market. With a fast-growing GDP, high technical talent, modern technological infrastructure and high retention rates, Vietnam is making their way to attract global companies, also further develop its already-strong IT infrastructure.

Challenges of Vietnam IT Outsourcing

While Vietnam is gaining their reputation to become a premier country to outsource IT support, there are still many challenges to deal with. According to The World Economic Forum’s 2017 Global Human Capital Report, Vietnam is ranked at 64th out of 130 countries. For companies having incentives to establish large-scale IT outsourcing, it may be still out of reach. For a multi-thousand-person operation, Vietnam still needs some time to offer such infrastructure.

What are the challenges of IT outsourcing that Vietnam has to deal with?

What are the challenges of IT outsourcing that Vietnam has to deal with? | Source: Savvycom.

Also, there are fewer vendors which mean fewer options for your business. Substantial focus on key business practices and operating norms is one thing you want to notice when IT outsourcing in Vietnam

Government organisations don’t fully support you to find real estate, navigate real estate filings and put you in touch with HR organisations and the telecom vendors, so you might be prepared to do this legwork yourself.

Promising future in Vietnam IT outsourcing

In spite of the below challenges, there are optimistic signals that could be changing to be better.. STEM (science, technology, engineering, and math) fields are further developed in Vietnam. Well-known universities have consulted and given useful pieces of advice to encourage the development of a major university in Hanoi and Fulbright University adding a campus in Ho Chi Minh City.

To grasp a better view of the challenges/opportunities, organizations and companies outsourcing in Vietnam should research and build a strong connection with them to fully understand Vietnamese culture. It will benefit businesses to optimize recruitment, get an overview of the political landscape, tax code, and to ensure appropriate licenses and documents.

Where can you find trustworthy Software Outsourcing Companies in Vietnam?

A growing economy, stable government, and an increasing population of skilled, well-educated, young labours is a positive side I can depict about Vietnam. Software development companies here can provide adept programmers for mobile app, web, and IOT development. Many companies also expertise in offshore software development topics like business intelligence, big data, QA, and software testing.

Which city is your choice?

Which city is your choice? | Source: Savvycom.

Ho Chi Minh City

Also known as “Saigon” before, this is the most populous area in Vietnam, with nearly 10 million residents. Ho Chi Minh City is in the southern region – about 1100 miles away from Hanoi. It is a highly urbanized, international city with many respected universities, including the Ho Chi Minh City University of Technology.

Da Nang

Located between southernly Ho Chi Minh City and Hanoi in the north with a beautiful beach, Da Nang has been a popular tourist destination for many years. The Da Nang University of Technology is one of the most well-accomplished and prestigious universities in Vietnam. Lots of software companies in this area recruit their talents from this institution.

Ha Noi

Being the capital of Vietnam, Hanoi is the social cultural-educational centre. The elite Hanoi University of Science and Technology is located in the city centre, with over 40,000 students attending it annually. Other tech-focused schools in Hanoi like FPT University also provide well-educated, capable IT professionals each year – often with English fluency.

Having developed nearly 10 years in Vietnam IT Outsourcing Industry, Savvycom hopes to share valuable information and up-to-date news of technology with you.
Located in the heart of Hanoi, with the power of more than 100 professional IT engineers, Savvycom has served clients across the globe, from Asia countries, EU to the US. We deliver software outsourcing services in a wide range of industries such as Retail & E-commerce, Banking & Finance, Logistics, Education, Healthcare and many more. Following the Agile methodology, we are committed to being highly responsive and providing our clients with high-quality, cost-effective and time-saving IT outsourcing services. Read more: 

Book a free consultation now

For further enquiries related Vietnam IT outsourcing, please do not hesitate to contact Savvycom at:
Phone: +84 24 3202 9222
Hotline: +84 32 657 2886
Email: contact@savvycomsoftware.com
Head Office: 12th floor, Viet A Tower, Duy Tan Street, Hanoi, Vietnam

We would love to give you a free consultation and suggestions to achieve your goals.

Vietnam IT outsourcing – Opportunity or Challenge? at: January 25th, 2019 by admin