The world after COVID19 pandemic enhances trends of remote healthcare, e-learning, and remote working. That’s why the demand for software outsourcing is rising globally.
Recently, the IT outsourcing industry in Vietnam become more attractive than ever due to cost advantages and high qualifications of software companies. In 2020, the Vietnamese government officially concentrates on supporting companies to adopt the plan of becoming the typical IT nation. In which, Vietnam will speed up the strategies of digitalization in all sectors, attracting more clients and investments from the Western.
Vietnam Software outsourcing industry on the top of the world
To approach the vision of industry 4.0, Vietnam got ready to make an enormous transform in the whole market. The evidence is that besides China, Vietnam is seemingly the top choice of companies in America, Europe, and Australia. Whereas, AT Kearney ranked Vietnam at the top 6 countries for software outsourcing globally. Additionally, Resorz revealed the most favorable outsourcing destinations of Japan IT companies tends to be Hanoi and HCMC (the two largest cities in Vietnam).
- Vietnam had ranked at the position of 42, according to the Global Innovation Index (GII) in 2019.
- Last year, the US News and World claimed that Vietnam attracted totally US$ 26.16 millions of FDI, which made it to one of the most attractive countries for investment.
- Public reports calculated the total revenue of the IT outsourcing industry in Vietnam at approximately US$ 5 billion, which significantly increase by 10% than that in 2018.
- According to the latest reports about the economy in South East Asia, the market size predicted to reach US$ 300 billions in 2025. By which, it expected to become the fastest-growing locations for IT and e-commerce development solution due to the high portions of tech-savvy citizens.
- In 2020, Vietnam and other countries in post coronavirus pandemic tend to focus on developing software to on-demand delivery, food and beverage orders, fintech, healthcare, and even travel and tourism.
Destination of several tech giants
Although parts of the world suffer massive losses in economics due to the effort of deterring COVID-19 spreading, Vietnam did a great job at the beginning that the economy has only seen negligible damage. As a result, many tech giants expressed the desire to invest in Vietnam. Notably, Apple has a plan to extend its supply chain by cooperating with some ICT companies in Vietnam. Besides, Samsung stated that they would invest more by US$ 300 million for R&D in Hanoi, which creates more than 4000 jobs to Vietnamese engineers.
One of the reasons encouraging foreign clients choosing outsourcing vendor in Vietnam refers to the loyalty among Vietnamese developers. In which, the personnel fluctuations rate among companies claimed to be lower than other countries in this region. Particularly, IT engineers in the Philippines, Malaysia and India have an incentive to work in a foreign country, while the majority of Vietnam IT developers express their expectation to be employed by local firms.
Related article: IT outsourcing services – What are the trendy software development contract and model
Software outsourcing pros and cons
|Time and cost-efficiency|| |
Leverage professionals with latest Technology
| In practice, roundly 59% of business owners claimed that they choose software outsourcing for lower cost of production. Expressly, employing in-house developers charge companies higher price than using outsourcing dedicated software development team, due to the reduction of non-salary benefits, including training cost or office supplies.|
Apart from that, the income gap between developing countries and developed countries also lead to the cost advantage of software outsourcing. Hiring software development companies in Vietnam or some other Asia countries refers to absolutely cheaper than using Western developers.
In particular, several international IT rankings, Asia developers have got high rank. As a result, tech giants worldwide have employed Asia IT engineers to many key positions.
|Hiring a dedicated outsourcing team means you break the geographic limitation. There are more and more tools for supporting remote works nowadays, which allow businesses to work smoothly with their outsourcing vendors.|
Additionally, software outsourcing companies tend to have strong technical expertise, accumulated through several projects with clients in different background and requirements. To better adapt to the rapid changing of the software development market, outsourcing companies have to steadily up-to-date with the latest tools and skills. By which, hiring them you would handily access the top of the line technology advancement.
In most of outsourcing dedicated development team, Agile and Scrum methodologies have been applied thoroughly to deliver their services, which reduce the time to perform the projects.
|Focus on core business goal||Higher product quality|
|Leaving unspecialized tasks to outsourcing vendors means that you have more time and resources to perform your internal strength. By which, the workload of your in-house team could be reduced due to the optimization in business processes.|
Expressly, software outsourcing companies have their own labors and methodologies that they can directly start doing the projects without any additional time-consuming. As a result, your employees only need to focus on their core expertise, leading to improving the productivities to both companies
|In research, outsource your projects to a dedicated software development team bring you the final product with higher quality and less bug. As professional software development companies, outsourcing vendors are responsible for testing and assuring the software work smoothly.|
Furthermore, leveraging comprehensive experiences, outsourcing dedicated team might rapidly find the appropriate solution and innovative idea to carry out the projects.
Related article: Vietnam – The next giant in Software outsourcing development
Drawback of hiring software outsourcing company
|Communication challenge||Privacy and security risks|
|One of typical difficulty of software outsourcing market refers to the gap in language, time-zone and culture, which lead to miscommunication among in-house team and outsourcing team. That’s why a business should consider the language ability of outsourcing vendors as well as developers before signing the contracts.|| Revealing the business process and data to the other companies might hurt your firms in terms of the security aspect. |
Your final products face the risk of being source code leaked or stolen. Additionally, if outsourcing vendor has unethical acts, your sensitive information will be sold to other firms without your agreement. As a result, be careful when choosing an outsourcing vendor.
In conclusion, software outsourcing tends to remain the chief industry that software outsourcing companies in Vietnam. It expectedly has more chance to capture more the market share by approaching massive project value from clients in Western countries. If you are looking for a professional outsourcing vendor with rich experiences and capacity, a Vietnam software development company might be an ideal choice.