Vietnam Software Outsourcing

Vietnam is now one of the 10 most attractive global services location in the world, according to an assessment report for the year 2009 produced by US consultancy group, A. T. Kearney, and reported by the Vietnam News Agency. The assessment was based on a survey of 50 countries that evaluated the costs, labor force skills and business environments in each country. This change reflects an increasingly busy offshoring industry, especially focused on iT.  The report noted that Vietnam's software processing industry is growing rapidly. Vietnam's position was up nine rankings compared to the group's rating in 2007.  While India continues to top the lists, followed by China, Malaysia and Thailand.

Software outsourcing location vietnam, india, china, thailand, philippines, malaysia

Vietnam was the first choice of Japanese companies seeking foreign partners for software outsourcing orders, according to a survey by the Japan Information Technology Services Industry Association in 2009.

Vo Hong Ky, director of HCMC’s HPT Software Center, told Saigon Times newspaper that local software businesses perform all software outsourcing services, but most orders they receive are related to software testing and data entry. Specialist in this field actually wanted high-level orders, but the country's current capacity does not allow them that, Tuan said.  Nguyen Van Hien, director of iNet Solutions Corporation added that on a scale where one is the easiest task and five is the most complicated service,Vietnamese outsourcing contractors generally perform level 2.5 services. According to the government’s software outsourcing industry development goals, the industry must achieve a 35-40 percent growth rate with sales of US$800 million per year by 2010. The goal aims to make Vietnam one of the 15 most developed software outsourcing industries in the world.

IT workforce skill and availability, india, china, singapore, indonesia, thailand,malysia, philippines, vietnam
From the above table: People skills and availability (30% of Total Score)
Remote services sector experience and quality ratings

- Size of existing IT and BPO sectors
- Contact center and IT center quality certifications
- Quality ratings of management schools and IT training
Labor force availability
- Total workforce
- University-educated workforce
- Workforce flexibility
Education and language
- Scores on standardized education and language tests
Attrition risk
- Relative IT and BPO sector growth and unemployment rates

Vietnam Software industry revenue

Influenced by the economic crisis, the growth rate in 2008 and 2009 dropped substantially; but in 10 years, Vietnam Software Technology revenue increased nearly 19 times, with an average increase of nearly 35% per year
  • In 2009 there are more than 1,000 software companies employing about 64,000 people.
  • Over 200 companies, with average size of 150-200 employees, engaged in software outsourcing services.
  • There were two businesses that achieved CMMI level 5 certification, and dozens of companies have CMM-4, CMM or ISO-9001-3.
  • There are some companies with more than 1000 employees, such as FPT software, FPT Information Systems, TMA, PSV, etc.
  • Software applications focused on electronic entertainment,  value-added services on the Internet and mobile networks are the current focus.
  • Prime Minister issued Decision 50/2009/QD-TTg on 4/29/2009, "Regulation on Management & Development Program of the software industry and the development program of the digital content industry in Vietnam" in order to remove obstacles and promote the implementation of development programs and software industry.

Software Industry's Demand for Manpower:

According to the Online Employment Indicator Report by VietnamWorks, the country's largest online recruitment site, Vietnam’s sales sector has the highest demand for manpower of all segments of the country’s economy. Software specialist follows sales in the number five position in terms of demand.  The list in terms of skills in demand by business is currently accounting/finance, administration, IT-software, and marketing.

IT workforce in Vietnam, Hardware, softweare, digital

Vetnam is a country to watch

According to the Kearney Report, Vietnam is a country to watch. 

Known for their nationals skills and diligence, Vietnam also offers low production costs. Furthermore, Vietnamese software companies have strived to earn international certifications such as the ISO-9000 and Capability Maturity Model (CMM) of all 5 levels. In addition, Vietnamese authorities and agencies have been building and operating software parks.

wages for IT, hardware, software workers in Vietnam

Software Industry Needs Improvement in Two Weak Points:

The Principal of the University of Information Technology in HCMC, Hoang Kiem, has pointed out in the Thanh Nien news that most graduates from IT institutions, including the country’s best schools, have two weak points: foreign language skills and the ability to understand new technology.   Vice chairman of HCA and director of the HCMC-based branch of CMC Corporation, a software company, Phi Anh Tuan, suggested that in order for Vietnam to be one of the world’s largest software outsourcing markets, Vietnamese workers have to meet international standard - solely a cheap price is not a competitive edge anymore. 

Runckel & Associates has worked on projects in this sector and continues to follow development of the software industry nationwide in Vietnam. Please contact us for assistance


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