vietnam software outsourcing

3 reasons Vietnam software outsourcing will grow despite its limitations

While Vietnam has become increasingly prominent in software development outsourcing, there are certain limits that may hinder Vietnam software outsourcing industry from its full potential. Motivation, attitude, education, and community perception are the hurdles to cross in Vietnam. Does Vietnam have the right tools and determination to beat these challenges? What is the prospect of Vietnam software outsourcing industry in 10 years to come?

Biggest Limits for Vietnam Software Outsourcing Industry

Motivation and Attitude

The IT industry has offered more job opportunities with higher salaries to many Vietnamese young adults. Therefore, many high school students, when deciding on their future careers, choose IT jobs simply because they are ‘hot’, not usually because they are truly passionate about IT or have fully understood the nature of their future jobs.

When students finish their university or college training, most of them can make a lot of money –  8,000 – 26,000$ a year according to their levels of experience, which is higher than the average salary earned by their Vietnamese peers working in other sectors. This makes some of them arrogant and easily satisfied people. This also explains why some Vietnamese software engineers are not catching up with the latest trends in the world and are being left behind. If they do not have strong work ethics, they are going to lose out to their counterparts elsewhere.

Education: Lack of Practice and Soft Skills

It’s sad but true that despite the numerous efforts made by private schools in big cities, the overall education system in Vietnam suffers from a lack of practice and soft skills. The chalk and talk teaching methods in many high schools, especially in the rural areas, may diminish students’ motivation and creativity. High school students are not fully equipped with soft skills important for their future work, such as teamwork skills, negotiation, and presentation skills, all which have become a must in the software outsourcing industry.

Haste Makes Waste

Many companies are making their fortunes doing outsourcing, so ‘why shouldn’t I run a tech startup and earn huge money as others do?’

However, being too fast can cause Vietnam software outsourcing companies to make wasteful mistakes. Many outsourcing vendors are trying to grab as much money as they can at the expense of quality software solutions. There is little appropriate knowledge sharing and practice, so many tech startups are lagged behind.

Prospects of Vietnam Software Outsourcing

Despite the limitations, the future still looks bright for the offshore outsourcing industry in Vietnam. There are positive signs that have empowered Vietnam to achieve high growth rates in outsourcing.

English Skills are Being Improved

If you’re outsourcing, there is no use finding a good programmer with poor English, because you cannot communicate properly with him. In Vietnam, many English centers are offering highly productive courses to meet the increased demand for English learning. Learning English is a smart investment and a must if engineers want to earn better salaries. Some companies even pay for their employees’ English training. Therefore, many software programmers in Vietnam, both junior and senior alike, are acquiring better English skills.

Supporting Legislation

The country already concluded negotiations with the EU on the EU-Vietnam Free Trade Agreement (EVFTA), which is expected to take effect in the beginning of 2018. One of the main benefits of EVFTA is investment promotion, which will promote a competitive business environment in Vietnam.

The Vietnamese government is quite more flexible and supportive when it comes to the IT industry than other industries. This is easily understandable as the country is trying to attract foreign investment and modernize itself. Therefore, incentives are available for hi-tech enterprises and organizations.

However, the ideas presented in the laws are right but you may still need to study them carefully to avoid them being too vague or vast. When you are choosing a Vietnam outsourcing vendor, it’s advisable that you have them document everything and that you play an active part in the outsourcing process.

Big Players are Coming in …

In big cities like Hanoi and Ho Chi Minh, the pace is hustle and bustle. Many big players are coming in the country. This has forced both big companies, and small and medium-sized startups to upgrade their levels and expertise to stay competitive. This dynamic business environment is encouraging knowledge sharing and the smaller ventures can learn just as much.

If Vietnam keeps being on the right track and strives to break its own limitations, the future is promising for its offshore outsourcing industry in 5, 10, or even many more years to come.

That’s Why TC Systems (Vietnam) is here

TC Systems (Vietnam), established in April 2016, is a subsidiary of Tan Chong Motor Holdings Berhad (Malaysia). Recognizing the potential of the software development outsourcing industry in Vietnam, Tan Chong Group decided to tap into the IT talent pool of Vietnam with an aim at producing the best software solutions for businesses and enterprises in Asia and all over the world. We are also intending to develop the potential of Vietnamese IT workforce to the fullest by expanding our business to Ho Chi Minh City by the end of 2017, apart from Hanoi and Da Nang.

At TC Systems (Vietnam), we make sure the English language is not a barrier and there is a continuous and effective flow of knowledge sharing and on-the-job training within our team. Our Vietnamese and Malaysian team leads are experienced in various fields in IT outsourcing industry and working with clients from many parts of the world.

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