WHAT IS OUTSOURCING ? WHY SHOULD INTERNATIONAL BUSINESSES CHOOSE VIETNAM AS A SOFTWARE OUTSOURCING DESTINATION?
Outsourcing is becoming more and more popular in the technology age, when the demand for technology positions and resources is no longer easily found in the domestic market. Moreover, with the rise of the startup ecosystem, outsourcing has given company founders the opportunity to access top technology talent at an optimal cost. Through this article, let’s learn about outsourcing with Tech Town , famous outsourcing companies as well as strengths when outsourcing in Vietnam.
What is outsourcing?
According to Wikipedia, Software Outsourcing (English: Offshore Software R&D) is understood as outsourcing part or all of software projects as Outsourcing of Products instead of Owning Products. Product disposition belongs to the place of outsourcing .
simple terms, outsourcing is a process in which a company hires another company or an individual to perform tasks – tasks that are normally performed by the company’s employees. This can help reduce personnel load, improve work efficiency, especially save costs of management, operation, recruitment, ..
Benefits from outsourcing services
In the 4.0 era, technology factors contribute greatly to deciding the competitive advantage of an enterprise. Outsourcing is an indispensable service in the context of businesses “racing” technology, business leaders consider this as an effective strategy to promote and bring high efficiency to their operations. its business.
Outsourcing company is the unit that will be in charge of building the entire system including employees, machinery and equipment to perform the task. Because the demand for technology and digital transformation of businesses is increasing day by day, outsourcing services have also become popular since then, they often perform jobs such as software development, application programming. , technical support and many other specific services.
In addition to those benefits, businesses now decide to outsource software outsourcing to use the expertise of the provider. The reason is because they are experts in the field of technology, specializing in performing and better able to perform IT tasks than the team that businesses recruit themselves.
With such benefits, modern businesses always appreciate the solution of using the services of an outsourcing company , from which they can rest assured and focus their resources on professional tasks, gain a competitive advantage in the market.
Cons of this service
Everything has two sides and so does outsourcing . Before many of the great advantages above, outsourcing also has a few disadvantages that businesses also need to understand.
The first is about software security risks, because the outsourcing process requires working with other partners, so information and data of the business may be leaked and not meet the needs of customers. enterprise security needs.
Secondly, when cooperating with software outsourcing companies abroad, enterprises may encounter some communication and exchange problems, leading to product quality not reaching 100% as expected.
Hiring a software outsourcing company is similar to a business investment, the greater the benefits, the greater the risk. Therefore, this completely depends on the current situation of the business, the budget and the decisions of the leaders.
Outsourcing service in Vietnam: Why should you choose?
Almost every business wants to reduce operating costs to increase profits. Outsourcing will help businesses achieve that, it allows businesses to access a more diverse talent at a lower cost. This is beneficial for both parties involved, it creates jobs in developing countries, and at the same time brings great profits for companies using outsourcing services .
When considering countries that develop outsourcing services , although India is known as a bright destination, the Indian market is reaching saturation, causing businesses to look to other countries. Southeast Asia like Vietnam. Vietnam has the potential to become the next India, currently surpassing Thailand and ranking in the Top 6 destinations for quality software outsourcing . There are many reasons that outsourcing software outsourcing in Vietnam will bring advantages such as:
- The main advantage of outsourcing to Vietnam is the young population. About 70% of Vietnam’s population is under the age of 35 and about 45% is between the ages of 15 and 35. About half of the population is healthy enough to join the labor force.
- Vietnam has a literacy rate of 97%, producing 30,000 to 40,000 graduates in the field of Information and Communication Technology every year. They are prime candidates for outsourcing companies looking for new talent.
- Graduates have received intensive training in Information and Communication Technology. Because Vietnam has more than 250 colleges/universities and more than 187 vocational schools offering courses in the field of Information Technology. Students have many opportunities to get educated and pursue a career in software development.
- Vietnamese engineers are hard-working people who always want to stick with the company for a long time. A hard-working and inquisitive workforce not only speeds project completion, but also fosters corporate spirit, inspires, and works better together.
- And most importantly, the cost of hiring a Vietnamese software developer is significantly lower than that of an American developer. Compared to famous software outsourcing locations in Asia like India, outsourcing costs in Vietnam are up to 30% lower.
- Vietnam’s economy has a stable growth rate, Vietnam’s GDP growth rate is 7.4%. In addition, about 90% of the population of Vietnam do not follow any religion. This means that Vietnam will not have any ethnic, religious, economic or political conflicts within the country.
Stages of working with outsourcing companies in Vietnam
Stage 1 – Selection
1. Defining the objective, from which the requirements and acceptance criteria are set
Not understanding each other about the context and goals of the project is one of the most common reasons for project failure. This presents even more challenges before it comes to outsourcing, as your partner may be too new to not only your business, but also the culture and market context. your. That is why it is important to clearly define your business needs and the goals you want to achieve before starting any other endeavor. Therefore, make a list of specific requirements, try to make it detailed but brief. Business fundamentals include project schedule, deadline, contract duration, scope of work, desired product functionality, features and technology, etc. The next platform in this preparation phase is acceptance criteria, defining the method of approving the finished product and the tasks to be performed in different situations. With these documents in place, the business is ready to move on to the next step.
2. Make a list of potential outsourcing companies and gradually narrow the list
Here are the sources to find outsourcing partners :
- Introduction: This is not necessarily the best source, but often the safest. If you find in your network a partner with direct experience in outsourcing in Vietnam, ask for their opinion. Even if it is not possible to choose from the companies they recommend, there is a lot of useful information that businesses can learn, especially for the purposes of setting criteria and comparing rates.
- Search engines (mainly Google): anything can be found on Google. However, businesses run the risk of being “flooded” between too many options or even worse, choosing the wrong partner. To get the most out of your Google search, try to use keywords that are relevant and have a variety of categories. Besides common phrases like “software outsourcing company in Vietnam” or “Vietnamese outsourcing company ”, try phrases that are more specific to your specific project, such as “ app development company in Vietnam”.
- Industry Categories: For the software industry in particular, there are some reliable listings such as Clutch.co, G2.com, sortlist.com, goodf Firm.co. These sites have detailed breakdowns of outsourcing service providers as well as customer reviews, benchmarks against competitors, etc. One small thing to keep in mind: Recommended rankings in categories don’t necessarily apply to your unique situation. A place in the top 30 is acceptable for cooperation, the rest will depend on other factors.
By digging through those sources while targeting project characteristics and criteria, you will quickly discover some prominent company names. Try to narrow your listing down to an appropriate number (10 or less for a small or medium-sized project).
3. Check company information and customer testimonials
Customer reviews can tell a lot of interesting things about the company in question. Where can businesses find those reviews? Once a list of potential companies has been identified, their own websites should be the first places to visit. However, testimonials on these sources are often “filtered” and edited by their team for marketing purposes. Fortunately, there are better solutions like: review sites. Not only more authentic, company reviews on platforms like Clutch.co , G2.com , sortlist.com or goodf Firm.co also provide more diverse insights like project size, Budgets, timelines, and customer ratings for different aspects, giving you comprehensive information about your prospective partner.
Stage 2 – Before setting up the contract
1. Conduct interviews and selections
After thorough investigation, the listing of the business has now been fine-tuned. Start contacting each company and interviewing them. During interviews, try to assess all the details that are not mentioned on public channels, such as available resources, communication skills, problem-solving abilities, level of expertise, project results, etc. From such interviews, it is possible to choose 3-5 outsourcing partners that are most suitable for your project and arrange them in order of priority. Work more with the top supplier, but keep in touch with the other companies on the list as a backup plan.
2. Performance of a mutually beneficial contract
Now is the time to make a deal with your chosen outsourcing partner. Contract specifications will vary depending on the specific case of the project. In general, the essentials may include payment terms, liabilities, warranties, notice periods, privacy and data protection, intellectual property rights, no solicitation provisions, as well as jurisdiction. In terms of contract type, there are three main pricing models: fixed price, time & materials, and dedicated team. To achieve win-win goals and minimize potential risks, do not underestimate any factor involved in a contract. It is certainly good to consult a lawyer because a valid contract will help the business prevent problems in the process of cooperation with its partner.
Phase 3 – During the project
1. Ask the partner to provide documents
While documentation can be done simply and quickly in internal teams, it has become a must for outsourcing projects . Try to make every progress that the partner team is working on. Updating detailed project documentation is especially important every time a new product or feature is improved, as it can help prevent potential problems and serious misunderstandings. While this requirement may create some additional costs for the project, it will ultimately save your budget by reducing duplication significantly.
2. Get demo business early and often
Periodic project trials can be a great solution to help you track your partner’s progress and spot problems as they happen. Having the right schedule for all stakeholders to do the demo will help keep the process going. Demos can be scheduled to be received preferably once every 1 to 2 weeks, or adjusted to the will of both parties, as long as it is conducted regularly.
3. Establish effective communication and management methods
Communication gap is one of the most common reasons for an outsourcing project to fail. To prevent this problem, effective communication channels and management systems need to be developed and agreed between the parties at a very early stage. Scheduled updates and regular follow-up through meetings or reports should be planned to ensure mutual understanding and problem-solving capacity. Businesses can use some built-in project management tools like Trello, ClickUp, Jira, Asana.
When done right, outsourcing in Vietnam can be a wise strategy. By sharing the principles and best practices mentioned above, we hope to help businesses in finding outsourcing partners for long-term companionship.
Top 5 software outsourcing companies in Vietnam
Tinh Van Software Company
As a member unit of Tinhvan Group established in 2006, Tinh Van Software Export Joint Stock Company (formerly known as Tinh Van Software Export Center – Tinhvan Outsourcing – TVO) has gradually built up a company in Vietnam’s software outsourcing and exporting industry with in-depth experience in implementing outsourcing projects in many different fields, based on many different technology platforms.
After many years of operation and with drastic investment, the projects at Tinhvan is deployed based on international standards in quality management and project management such as ISO 9001, ISO 27001 and CMMi Level 3. Therefore, with Tinhvan Outsourcing, partners and customers come from many countries such as the US, Germany, Singapore, and Japan have been firmly believing in the successful results of 95% of the projects.
Tinhvan Outsourcing provides customers with perfect software outsourcing and development services from support, consulting, maintenance to comprehensive software and applications development. The products and solutions deployed by the company are guaranteed to have a high level of safety, are scalable, deliver quality satisfaction and cost-effective satisfaction.
Qsoft Vietnam Joint Stock Company
With more than 15 years of operation and continuous development from 2005 until now, QSoft company has achieved remarkable achievements. Up to now, Qsoft Vietnam has become one of the leading Outsourcing companies, attracting a lot of attention from customers and partners. Qsoft’s experienced and skilled staff is always ready to advise customers on effective solutions in areas such as digital transformation, software upgrade, and website design.
Currently, Qsoft Vietnam is capable of providing customers with many different services and products. Not only active in Vietnam, this company has successfully completed countless other large-scale projects for foreign partners.
Tech Town software outsourcing company
Tech Town is a Vietnamese technology company that specializes in providing technology solutions with the application of the most modern technology techniques such as Blockchain, AI, machine learning… Tech Town is also a professional software outsourcing company that has been recognized as a professional outsourcing company. Previously cooperated with partners from many countries around the world such as the United States, Canada, Netherlands, Japan, Australia, United Kingdom, New Zealand, Singapore.
Tech Town’s team of programming engineers are all elite members from leading technology companies, proficient in many programming languages such as: Ruby on Rails, Node JS, PHP, Java, Python…, has experience in building and designing websites, developing blockchain applications, applications on Android / iOS mobile platforms and consulting the latest technology solutions. The professional and dedicated working style of Tech Town engineers is the key to bringing satisfaction to customers in the right software solutions at the most reasonable cost.
Through finished products, completed earlier or on time as committed, with tight support and warranty, Tech Town has become the outsourcing solution of many major domestic and foreign partners. countries such as: QTS Australia, Nedcoffee Vietnam, Bliss Bank, Trung Thuy Group, Revollet International Limited, R-point, Bookmarkx, Rev Capital Fund and many other international partners.
RIKKEISOFT . CO., LTD
Rikkeisoft is one of the most prominent brands in Vietnam in the field of software outsourcing and manufacturing, Rikkeisoft’s strength is in Web-app and Mobile App programming for Japanese partners. Rikkeisoft has been making great efforts on the way to becoming one of the largest software outsourcing companies in the region, the first successes were recognized when VINASA recognized Rikkeisoft as one of the top 30 IT enterprises in Vietnam. Vietnam helps to bring the image and reputation of the company to a higher level and receive more trust from foreign partners.
SAVVYCOM JOINT STOCK COMPANY
Savvycom specializes in providing a variety of related services in the information technology industry. Savvycom’s strength is building and developing Website applications (Web-app) and applications in mobile app stores (App Store, Google Play…).
With a state-of-the-art working environment and a team of skilled programmers who have many years of experience working in the application field, Savvycom always gives customers satisfaction with a good level of application completion and the required time. Design, build fast app, warranty, professional technical support.
Hopefully the information Tech Town brings above will be useful to businesses.
Contact us if your business has any technological challenges.