Vietnam IT Outsourcing Hotspot: A Small But Mighty Powerhouse

Estimated reading time: 6 minutes

India reigned for decades since the world’s most dominant business process outsourcing (BPO) destination, but times have changed. In accordance with trade association Nasscom, the Indian BPO industry has just seen its largest employment drop in seven years, while its information technology (IT) sector saw its second year of increasing unemployment. As India adjusts to changing expectations and demand, new regions are emerging as powerful IT outsourcing hubs.

One country, referred to as a tiny but mighty outsourcing powerhouse in the Asia-Pacific, is Vietnam. It’s a nation few would want to equate with Silicon Valley but one with a technology spirit and talented population that reminds lots of the industrious beginnings of America’s storied technology epicenter.

The History Of Global IT Outsourcing In Vietnam

The truth is, IT outsourcing in Vietnam is rather young. Higher than a decade ago, Harvey Nash, the organization where I been employed by since 2005 — and additional multinational technology corporations, including Intel and Oracle — began tapping into the growing tech workforce in Vietnam. Additionally to developing new policies that appealed to tech businesses, the Vietnamese government had invested heavily in STEM education, and the end result was a workforce abundant with skilled technologists.

Since that time, the Vietnamese tech and outsourcing industries have become steadily. In 2017, Vietnam rose by five places in the Global Services Location Index, a ranking of software outsourcing services from consulting firm A.T. Kearney. The country’s outsourcing success is becoming a competitive concern for the Indian counterpart as companies like IntelIBM, Samsung Display, Nokia and Microsoft continue to buy Vietnam.

Read more: Big Potential for Vietnam’s IT Services

What Surprises Outsiders?  

Within my experience, some Western business leaders expect rigidness from Vietnamese outsourcing providers. Sometimes it’s assumed based on which they believe operations must resemble in a socialist republic with a history of Communist political influence. Sometimes it’s deficiencies in insight into the Vietnamese culture. What they find inside Vietnam, however, is a very adaptive way of work and tech.

Rapid change has defined the Vietnamese economy, which includes evolved from its agrarian foundation to become a modern, business-driven marketplace. Vietnam joined the World Trade Organization (WTO) in 2007 and has striven to create it easier for Western companies to begin a footprint in Vietnam. Western investment is widely viewed as great for economic growth, and throughout the last 10 years, I have experienced firsthand how a cultural comfort with change has yielded a very adaptive IT workforce. Technology specialists in Vietnam are more comfortable with quickly becoming an all-natural extension of global clients, prepared to challenge norms, and bring innovative suggestions to the table. The education system is striving to make sure that “English becomes an additional language at universities rather than a spanish,” sending a solid signal that English proficiency is very important to Vietnam.

However, there’s a social rigidity in Vietnam that affects the workplace: loyalty. Vietnamese employees usually are very loyal to their employers, reflecting the powerful loyalty the culture places on family bonds. Vietnam workers are expected not merely to supply due to their immediate families but in addition, give support for their extended families. It’s a social distinction that always keeps Vietnamese professionals near home and loyal to good employers. Where in India, the Philippines, and Malaysia, professionals often leave their house countries and pursue career advancement abroad, Vietnamese professionals are prone to stay near home.

Local Workforce Facts 

Vietnam is working to cultivate its highly skilled workforce to be able to contend with regional neighbors Singapore, Malaysia, and the Philippines, and it’s committed to raised education and STEM learning. Cornell University, like, is advising on the development of a world-class university in Hanoi, while Fulbright University will quickly open a campus in Ho Chi Minh City. With this type of continued investment in research and the sciences at the university level, Vietnam is ensuring that many of its college graduates can have STEM degrees.

Gender diversity in the tech sector in Vietnam can be impressive. At Harvey Nash, we employ more women than men currently, and women are leading and promoted at the exact same rate as men.

Challenges And Opportunities 

Vietnam is a center of business process outsourcing alongside IT outsourcing. It’s a great complement for multinational corporations managing big datasets and searching for data cleansing in front of software development. Predicated on my firsthand experience in this region, the sectors most regularly leveraging outsourced IT talent in Vietnam include technology, financial services, media, gaming, software integrators, and businesses trying to cost-effectively explore emerging trends such as for instance AI, machine learning, and blockchain.

For many businesses, the key IT outsourcing challenge in Vietnam is adapting to presenting a talented innovation team that sits 5,000 to 10,000 miles away. It’s a modification best overcome with training and communication. Training an offshore team in the exact same way an internal staff is trained sets a basis for success, establishing common processes for collaborative work.

Success requires establishing smart communication protocols in order that despite time and distance, teams work fluidly and smartly together. The main element is by using timezone differences to a productivity advantage. For instance, as opposed to playing catch-up with the remote team, businesses should proactively plan workloads. The job a distant team does the night time before should feed the area team the following day. That’s the sweetness of outsourcing to Asia-Pac for Western businesses: a nearly 24-hour cycle of productivity. The program development life cycle can fold effectively into this structure with offshore teams testing overnight what’s been developed throughout the day.

The Outsourcing Outlook In Vietnam 

While India is experiencing some bumps on the outsourcing road, areas like Vietnam continue steadily to see growth. Much like other Asia-Pac outsourcing hotspots like Cambodia and Thailand, Vietnam needs to keep its diligence in cultivating talent. Sustained government investment in STEM education and expanding the footprint of multinational corporations will fuel both workforce and marketplace in Vietnam. It’s a tendency I’ll explore in future articles as I share my real-world experience in other global outsourcing hotspots, including Australia and Singapore.

Source: Forbes

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