Forbes: Vietnam to become IT outsourcing powerhouse

Vietnam has progressed towards promoting IT development, calling for investment from tech giants around the globe - Photo: sggp.org.vn

The New York-based business magazine has run an article by Anna Frazzetto - a leading expert on digital technology and technology solutions working for the recruitment consultancy and IT outsourcing service provider Harvey Nash - said that Vietnam is emerging as a potential IT outsourcing centre.

The prestigious US magazine described Vietnam as “a small but mighty outsourcing powerhouse in the Asia-Pacific,” saying that it is a country few would think to equate with Silicon Valley but “one with a tech spirit and talented population that reminds many of the industrious beginnings of America’s storied technology epicenter.”

The fact is, IT outsourcing in Vietnam is fairly young, Forbes stated. More than a decade ago, a few multinational technology corporations, including Intel and Oracle, began tapping into the growing tech workforce in Vietnam. In addition to developing new policies which appealed to tech businesses, the Vietnamese government had invested heavily in STEM (science, technology, engineering and mathematics) education, and the result was a workforce rich in skilled technologists.

Since then, the Vietnamese tech and outsourcing industries have grown steadily. In 2017, Vietnam rose 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 has become a competitive concern for other IT outsourcing giants, such as India, as companies like Intel, IBM, Samsung Display, Nokia and Microsoft continue to invest in Vietnam.

Rapid change has defined the Vietnamese economy, which has evolved from its agrarian foundations to become a modern, business-driven marketplace. Vietnam joined the World Trade Organisation in 2007 and has strived to make it easier for Western companies to establish a footprint in Vietnam. Western investment is widely seen as good for economic growth, the article wrote, adding that cultural comfort with change has yielded a highly adaptive IT workforce.

Vietnam is considered a bright star in IT outsourcing - Photo: Shutterstock

Technology specialists in Vietnam are comfortable with quickly becoming a natural extension of global clients, ready to challenge norms and bring innovative ideas to the table, Forbes assessed. Along with that, the education system is striving to ensure English becomes a second language at universities rather than just a foreign language, sending a strong signal that English proficiency is important for Vietnam.

One factor considered favourable for IT development in Vietnam is that “Vietnamese employees are usually very loyal to their employers, reflecting the powerful loyalty the culture places on family bonds.” Vietnamese workers are expected not only to provide for their immediate families but also to give support to their extended families. It’s a cultural distinction that often keeps Vietnamese professionals close to home and loyal to good employers.

For that reasons, Vietnam is “a hub of business process outsourcing along with IT outsourcing,” the article stated. According to the author of the article, the sectors most frequently leveraging outsourced IT talent in Vietnam include technology, financial services, media, gaming, software integrators, and businesses looking to cost-effectively explore emerging trends such as AI, machine learning and blockchain.

The article also pointed out the main IT outsourcing challenge in Vietnam for most businesses that is “adapting to having a skilled innovation team that sits 5,000 to 10,000 miles away.” It’s an adjustment best overcome with training and communication. Training an offshore team in the same way as internal staff sets a foundation for success, establishing common processes for collaborative work, Forbes noted.

It suggested that as with other Asia-Pacific outsourcing hotspots like Cambodia and Thailand, Vietnam needs to maintain its diligence in cultivating talent. “Sustained government investment in STEM education and expanding the footprint of multinational corporations will fuel both the workforce and marketplace in Vietnam,” Forbes concluded.