IT Outsourcing to Vietnam in 2023: A Smart Choice for Accelerated Business Growth

Over the past few years, Software Outsourcing Services have gained global popularity. While China and India were once considered the leading nations in this field, the landscape has changed, and countries like Vietnam are emerging as a growing market in IT Outsourcing. An increasing number of organizations and businesses are turning to Vietnam to outsource their projects. But what makes Vietnam highly regarded as a promising destination for foreign investors? Let’s delve into the reasons to gain a better understanding.

1. What Is IT Outsourcing?

Outsourcing is a business arrangement where a company contracts with a third-party provider to handle various technology functions. Within the realm of IT outsourcing, this involves tasks such as software development, infrastructure solutions, and software support. When engaging with a B2B outsourcing company, clients typically have two main types of cooperation to choose from: Offshore Development Centre (ODC) and Project-based collaboration models.

Based on the Statista report, the projected revenue for IT Outsourcing Services is expected to reach US$359,832.3m by the end of 2021, with a continuous upward trajectory leading to a market volume of US$551,956.3m by 2026. This accelerating trend indicates the widespread adoption of outsourcing teams by businesses, irrespective of their scale, whether it’s a small start-up or a large corporation. The rationale behind this trend lies in the substantial advantages that outsourcing offers, encompassing cost savings, efficiency improvements, and a heightened competitive advantage.

2. Why Would Business Choose To Outsource?

When individuals are new to the concept of outsourcing, they often harbor concerns regarding the ability of overseas companies to deliver work of high quality, effectively collaborate with onsite teams, and successfully achieve defined milestones and objectives with the same level of proficiency and excellence. Additionally, language barriers, challenges in establishing and maintaining communication, and various other issues can amplify the perceived risks associated with outsourcing.

However, it is important to note that numerous outsourcing firms prioritize more than just providing low-cost solutions to their customers. They place significant emphasis on ensuring that their offerings are of the highest standard, adhering to strict specifications, demonstrating unwavering commitment, and meeting all deadlines. These firms recognize the importance of building strong partnerships with their clients and understand that trust, reliability, and consistent delivery of exceptional results are crucial elements for long-term success.

To mitigate concerns regarding quality, outsourcing firms often employ rigorous quality control measures, implementing robust processes, and investing in skilled professionals with expertise in their respective domains. They understand the significance of maintaining high standards of workmanship and continuously strive for excellence in every project they undertake.

Moreover, language barriers and communication difficulties are effectively addressed by outsourcing firms through various means. They often have proficient bilingual or multilingual teams that facilitate seamless communication between the client and the outsourcing provider. Additionally, advanced collaboration tools and technologies are employed to bridge any gaps in communication, ensuring smooth and effective collaboration throughout the project lifecycle.

3. Why Would Business Choose Vietnam For IT Outsourcing?

When it comes to offshore software production, businesses often consider Asia, Eastern Europe, Latin America, and North America as popular choices. In terms of outsourcing in Asia, India and China have traditionally been regarded as the top two dominant destinations worldwide. However, among Asian-Pacific countries, Vietnam is steadily gaining recognition as a powerful and emerging center for IT outsourcing and offshore development.

Vietnam’s rise as an outsourcing destination is notable, as the country offers a combination of favorable factors that contribute to its growing prominence. With its skilled workforce, competitive costs, and favorable business environment, Vietnam has become an attractive option for businesses seeking IT outsourcing services.

Vietnam has quickly emerged as a prominent player in the IT outsourcing industry, despite its relatively brief 20-year history in this field. The country’s inherent capabilities and transformative efforts have made it a natural choice for global clients. This recognition is reinforced by its impressive ranking of 13th among the top 50 digital nations in the 2019 Tholons Services Globalization Index.

3.1. Young Population & Education Level

Vietnam’s youthful population stands as a significant advantage when it comes to outsourcing. With approximately 70% of the population under 35 and about 45% falling within the 15 to 35 age range, it indicates that nearly half of the population is ready to contribute to the workforce.

According to a report by Top Dev, Vietnam boasts around 400,000 IT engineers and over 50,000 IT students graduating from more than 153 IT institutions annually. These numbers highlight the country’s commitment to nurturing a skilled IT workforce.

In terms of global recognition, Vietnam holds an impressive position. It ranked 29th worldwide in Skillvalue’s Developer Skills Chart of the Skill Value Report in 2018. Additionally, it secured a spot within the top six in Topcoder’s Developer Skills Chart in 2016 and ranked 23rd in Hacker Rank’s Developer Skills Chart in the same year. These rankings showcase Vietnam’s proficiency and expertise in the IT field.

3.2 Top Professional IT Engineer Workforce

Vietnam is no doubt a promising location for seeking a reliable B2B Outsourcing Company because of the dynamic and talented labor. According to TopDev’s report, Vietnam has about 400.000 IT Engineers and over 50.000 graduated IT Students from over 153 IT Institutions per year. Besides, in order to meet the ever-growing demand for human resources, many IT firms have collaborated with education institutions to set up the training courses, give scholarships in order to improve the Vietnamese Tech Talented. Such talents also have an opportunity to study abroad in the US, UK, and other developed nations to broaden their knowledge in the technical field.

Vietnam is no doubt a promising location for seeking a reliable B2B Outsourcing Company because of the dynamic and talented labor. According to TopDev’s report, Vietnam has about 400.000 IT Engineers and over 50.000 graduated IT Students from over 153 IT Institutions per year. Besides, in order to meet the ever-growing demand for human resources, many IT firms have collaborated with education institutions to set up the training courses, give scholarships in order to improve the Vietnamese Tech Talented. Such talents also have an opportunity to study abroad in the US, UK, and other developed nations to broaden their knowledge in the technical field.

3.3 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.

3.4. Low Development Cost

According to Markets Insider, 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.

3.5. Social Stability

Compared to India’s Kashmir wars with Pakistan or the 2006 Thai coup, Vietnam is considered one of the most secured Asian nations. According to Minority Rights, 95% of citizens are ethnically Vietnamese and more than 80% of them do not belong to any specific faith group at all. Such statistics have proven that Vietnam is really free of religious conflict. Furthermore, Vietnam was also listed at the 12th ranking as the safest among the Asia-Pacific Region by Global Peace Index 2020. So, it can be said that Vietnam is a stable socio-economic and political situation country, and especially, its strategic location in the Asia Pacific region, which can create a hospitable business environment for outsourcing.

3.6. 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.

3.7 Cutting-Edge Technology

Vietnam, known for its rapid economic growth in Asia, is leaving a lasting impact on the global technology landscape. The country is at the forefront of various cutting-edge technologies including Blockchain, Internet of Things (IoT), Artificial Intelligence (AI) & Machine Learning, and Cloud Computing, among others. Vietnamese outsourcing companies possess the adaptability to cater to businesses’ needs, regardless of the specific technology they aim to implement. They have gained technical expertise through extensive study and hands-on experience working on complex large-scale projects that serve millions of users worldwide.

3.8. English Proficiency

In recent years, Vietnam has made significant progress in overcoming language barriers, which often pose challenges to success in the IT industry. Alongside their mother tongue, the majority of graduates in Vietnam are exposed to a second language, with English being the primary focus regardless of their field of study. As a result, Vietnam now ranks 13th in Asia in terms of English proficiency. This proficiency extends to the entire outsourcing team, including project managers, sales teams, and software developers, who have no language barrier when it comes to using English. In fact, their English skills often surpass the national average. This seamless communication enables foreign businesses and Vietnam IT outsourcing companies to interact, engage in in-depth discussions, and comprehend project requirements, ultimately leading to successful product launches. When combined with other favorable factors, Vietnam’s language proficiency contributes to its position among the top IT outsourcing countries in the world.

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

When selecting a software outsourcing company in Vietnam, the increasing number of options available can make the decision challenging. To ensure you make the right choice, it is crucial to have a clear understanding of your company’s software development priorities, performance indicators, and growth expectations. Keep the following key factors in mind during your selection process:

4.1 Expertise and Experience

Look for a provider with a proven track record of delivering successful IT projects. Assess their expertise in the specific technologies and services you require. Consider their experience in handling projects similar to yours, as well as their industry knowledge and domain expertise.

4.2 Portfolio and References

Review the provider’s portfolio to get an understanding of the projects they have completed. Look for case studies, client testimonials, and references to gauge their quality of work, reliability, and client satisfaction. Reach out to their previous clients if possible to get direct feedback on their experiences.

4.3 Technical Skills and Talent Pool

Evaluate the provider’s technical skills and the depth of their talent pool. Ensure they have a team of skilled professionals with expertise in the required technologies. Consider their recruitment and training processes to ensure they can provide you with highly competent and qualified IT professionals.

4.4 Communication and Language Proficiency

Effective communication is vital for successful outsourcing. Assess the provider’s communication channels, responsiveness, and English language proficiency. Look for clear and transparent communication practices, as well as their ability to understand and address your project requirements.

4.5 Infrastructure and Security

Verify that the provider has robust infrastructure, including hardware, software, and data security measures. Assess their data protection policies, confidentiality agreements, and compliance with relevant industry standards and regulations.

4.6 Scalability and Flexibility

Consider the provider’s ability to scale resources based on your project requirements. Evaluate their flexibility in accommodating changes, adapting to evolving technologies, and meeting project deadlines. Ensure they have the capacity to handle your project’s future growth and expansion.

By considering these factors and conducting thorough research and due diligence, you can choose the right Vietnam IT outsourcing provider that aligns with your project goals and ensures a successful outsourcing partnership.

5. Conclusion

Vietnam’s outsourcing industry has experienced rapid growth in the past decade, thanks to a supportive government, a skilled bilingual workforce, and international competitiveness. Vietnam has emerged as a leading IT outsourcing powerhouse in the BPO service industry.

These factors have earned Vietnam recognition from experts as a leading destination for IT outsourcing. Through this post, ONEXT DIGITAL sincerely hopes to assist you in selecting the best IT Outsourcing Firms In Vietnam that align with your specific requirements.