Outsourcing has now become a common way of doing business. Many companies realise that it is a more cost-effective and productive way to assign projects with dedicated contractors assigned to the tasks. In this blog we will be looking at why people are lining up for Vietnamese outsourcing services.

IT outsourcing has grown dramatically in the past 15 years with developed countries like America, Japan and Australia seeking partnerships with developing countries such as Vietnam to strategically develop and manage IT.

In fact, Vietnam has been Japan’s preferred partner for IT software development and service outsourcing since 2014.

Since the Vietnamese Government has started encouraging foreign investment, there is now more than $US10 billion a year flowing into the country in foreign investment projects.

According to 2021’s Global Services Location Index, Vietnam emerged as a new digital hub ranking sixth with four main categories: financial attractiveness, people skills & availability, business environment and digital resonance. Vietnam also ranked 9th in Tholon’s Top 50 Digital Nations.

From an obsolete country with barely any technological advancements 20 years ago, Vietnam has spurred rapid digital transformation to the point that our ICT businesses not only provide services to the domestic market but also export a great deal of software and other solutions.

According to the Vietnamese Government, its ICT market had an estimated value of $US7.7billion in 2021 and is expected to grow at approximately eight percent per year from 2023 to 2026 as both the public and private sectors increase adoption of ICT solutions.

The government of Vietnam has identified ICT as a major industry and socio-economic growth driver and is urging government agencies at all levels to apply advanced ICT solutions towards the goals of improving operational efficiencies and providing better governance services.

The Vietnamese Government has approved the National Digital Transformation Program through to 2025, with vision to 2030, which will further support the growth of the ICT market. The private sector, especially key industry stakeholders such as aviation, banking, energy, healthcare, broadcasting, telecommunications and urban infrastructure management, are increasingly employing advanced ICT solutions in order to enhance operational efficiencies and support sustainable growth.

Currently, Vietnam has approximately 400,000 IT engineers working in multiple fields and there are approximately 50,000 students who graduate from training institutions annually.

About 50% of the IT workforce have three years of experience and many Vietnamese tech engineers have senior/lead project expertise.

According to the Global Skills Index 2020, Vietnam’s technology skill sets rank second in Asia Pacific and 22nd globally.

Also in Coursera’s 2021 Global Skills Report, in terms of technology, Vietnam ranked third in Asia Pacific. More specifically, Vietnam ranks third in computer engineering and software programming, which augurs well for Australian companies looking to outsource software development services.

In Vietnam, English is the dominant language in the IT market. A vast majority (90%) can communicate in English, with 67% being at intermediate level or above.

Vietnam’s fixed broadband speed (February 2023) reached 91.6 Mbps, ranking 39/181 countries/territories. Fixed broadband Internet speed in Vietnam has increased by 17.18% over the past 12 months (November 2021 to November 2022) and is higher than the world average (74.54 Mbps).

For mobile Internet, mobile broadband speed in Vietnam is currently 40.82 Mbps. Mobile Internet speed has increased by 12.7% over a 12-month period (November 2021 to November 2022) and is higher than the world average (33.97 Mbps).

Australian businesses looking to establish a foothold in Vietnam should consider using Away Digital Teams (ADT), which is an Australian owned, Vietnam based outsourcing company. ADT provides Australian businesses with the ability to contract highly skilled software developers in Vietnam on a fulltime, ongoing basis who work from ADT’s Ho Chi Minh, Vietnam office.

The Vietnam office also benefits from 3 internet pipelines at 300 Mbps each and near on 100% uptime. Power is also the same benefitting from ample power supply and a 12 hour generator as a redundancy with a 20 second switch over.

Vietnam really is perfectly set up for anyone looking to outsource part of their software development capability. If you want to learn more then download our ebook, “Your guide to integrating an outsourced Software development team into your business”.

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Frequently Asked Questions(FAQ)

What specific factors have contributed to Vietnam's emergence as a preferred partner for IT outsourcing, particularly in comparison to other developing countries, and how have these partnerships evolved over time?

Vietnam’s emergence as a preferred partner for IT outsourcing can be attributed to several key factors. Firstly, the Vietnamese government’s encouragement of foreign investment has facilitated a significant influx of capital into the country, fostering a conducive environment for business growth. Additionally, Vietnam’s impressive digital infrastructure and technological advancements, as evidenced by its high-speed broadband and mobile internet, have positioned it as a competitive player in the global outsourcing market. Furthermore, Vietnam’s rapidly growing pool of skilled IT professionals, with approximately 400,000 engineers and a substantial annual influx of graduates, provides a vast talent pool for companies seeking outsourcing solutions. Over time, partnerships between developed countries like Japan, America, and Australia and Vietnam have evolved strategically to leverage each other’s strengths, resulting in mutually beneficial collaborations and the strategic development and management of IT projects.

Beyond the statistics on IT infrastructure and technological capabilities, what cultural or business practices in Vietnam contribute to the success of outsourcing initiatives, and how do these factors differentiate Vietnam as an outsourcing destination?

Beyond statistics on IT infrastructure and technological capabilities, several cultural and business practices in Vietnam contribute to the success of outsourcing initiatives and differentiate Vietnam as an outsourcing destination. Vietnamese culture places a strong emphasis on education and learning, resulting in a highly skilled workforce with a strong work ethic and dedication to continuous improvement. Moreover, Vietnamese professionals are known for their adaptability, creativity, and problem-solving skills, making them valuable assets for companies seeking innovative solutions. Additionally, Vietnam’s strategic location in Southeast Asia offers logistical advantages and time zone compatibility with key markets, facilitating seamless communication and collaboration between clients and outsourcing partners. These cultural and business practices contribute to Vietnam’s reputation as a reliable and attractive outsourcing destination.

How does the presence of companies in Vietnam address potential concerns or challenges related to outsourcing, and what advantages do Australian businesses gain by partnering with such companies in terms of access to talent, infrastructure, and operational support?

The presence of companies like Away Digital Teams in Vietnam addresses potential concerns or challenges related to outsourcing by providing Australian businesses with access to a reliable and experienced outsourcing partner. By leveraging Away Digital Teams’ expertise and infrastructure in Vietnam, Australian businesses can benefit from a skilled workforce, state-of-the-art facilities, and robust operational support. Additionally, partnering with a company like Away Digital Teams offers Australian businesses access to talent recruitment, HR management, and administrative support, streamlining the outsourcing process and mitigating risks associated with managing offshore teams independently. Moreover, the infrastructure and operational support provided by Away Digital Teams, such as high-speed internet connections, reliable power supply, and backup systems, ensure uninterrupted workflow and productivity. Overall, partnering with companies like Away Digital Teams in Vietnam offers Australian businesses a competitive edge in accessing talent, infrastructure, and operational support for successful outsourcing initiatives.