Today there are a variety of countries that you can go to when you need to IT outsourcing project. Selecting the best one, which can meet all of your needs, must always be your top priority.

While Eastern Europe, Latin America, or North America may be the first options that come to your mind, there are rising stars in the outsourcing market that you definitely should check out. These new players can deliver top-notch quality at a much lower price compared to the mentioned Western destinations.   

We’re talking about Asian countries and Vietnam in particular. The inflow of IT outsourcing projects from large global clients such as Samsung, IBM, and Microsoft into Vietnam is validating its competitiveness in the IT outsourcing industry. Vietnam’s many innate qualities along with supportive government policies are also giving it an edge over its competition. 

In fact, Vietnam ranks among the top global outsourcing destinations.

So, what advantages will you get from Vietnam, and why can it be the ideal option for your next project? Let’s find out. 

IT Outsourcing Services Are One Of The Fastest-Growing Industries Globally

The global IT Outsourcing (ITO) industry is experiencing significant growth, with an expected compound annual growth rate (CAGR) of 8.2% from 2023 to 2032. Currently valued at USD 565 billion, this sector is expanding due to increasing demand from businesses aiming to boost efficiency and cut costs through streamlined processes and optimized operations.

IT Outsourcing has transitioned from being an intimidating strategy to a successful approach for businesses when it’s implemented effectively with the appropriate outsourcing partner.

IT Outsourcing Growth Drivers

Several factors contribute to the expansion of the global IT Outsourcing market. Increased competition among multinational businesses to raise their profit margins is a catalyst motivating businesses to pursue cost-saving strategies. Outsourcing services offer a solution to enhance budget efficiency without significantly compromising quality.

In fact, businesses are augmenting their operations by harnessing the operational and managerial expertise of ITO firms.

Furthermore, technological advancements are important in driving the ITO market’s growth. Businesses can now delegate technology-driven tasks, broadening the variety of services provided by ITO companies.

Additionally, the imperative of remote work due to pandemic-induced restrictions and the shift in employee preferences towards remote work highlight the importance of outsourcing for businesses to manage their operations efficiently.

Security and Efficiency Balance

As companies emphasize the importance of cost-saving and operational efficiency, outsourcing has become increasingly popular. However, safeguarding intellectual property rights and ensuring security remain crucial concerns. Entrusting sensitive information to third-party vendors poses risks that could damage a company’s reputation and disrupt its operations if mishandled.

ITO companies address these concerns by establishing secure outsourcing environments with globally recognized certifications such as PCI-DSS for credit card transactions, HIPAA, and ISO 27001-2013 for Information Security Management Systems.

Vietnam has solidified its position as one of the top 10 global outsourcing destinations, as indicated by the 2023 A.T. Kearney Global Services Location Index (GSLI). Vietnam’s financial attractiveness is on par with India’s, making it highly attractive to investors and it surpasses Thailand in terms of skills and workforce availability.

The 8 Advantages Vietnam can offer its IT Outsourcing Partners

1. Attractive Labor Cost

Cost is one of the most important factors for any IT project. Vietnam can offer you the best price thanks to its lower labor cost compared to its Western counterparts. 

In particular, the same outsourcing services cost about 20-30% lower in Vietnam than in Eastern Europe and Latin America. Only African tech hubs can rival Vietnam’s labor costs, but its quality may not be as good due to its less developed infrastructure. 

2. Young and Skilled Workers

Vietnam is on the list of the top countries that have the largest number of engineering graduates. It has around 400,000 IT engineers and more than 50,000 more coming out every year from its over 153 technology institutions, according to TopDev. 

This sheer number of engineers can provide the workforce for the most labor-intensive projects out there, and that’s with no quality compromised, since Vietnam is among the countries that have the best developers in the world, according to Hacker Rank. 

3. Well-developed IT Infrastructure

The government of Vietnam has been incentivizing local IT businesses with tax cuts, preferential credit terms, exemptions from land rental, and other benefits under its effort to promote Vietnam as a leading destination in the high-tech market. 

These policies have been encouraging Vietnamese IT businesses to pour money into R&D and infrastructure development that enable them to provide top-notch service and handle demanding requirements from their clients. 

Saigon Hi-Tech Park, Danang High-Tech Park, and Hoa Lac Hi-Tech Park, where hundreds of millions of dollars worth of infrastructure have been developed and IT projects worth billions of dollars are being handled, are the representation of Vietnam’s ambition to become a dominant IT outsourcing destination.

4. Diverse Technical Skillsets

You can get access to a wide variety of skillsets for backend, frontend, database, and full-stack development with Vietnamese IT engineers. Here is, for example, a list of IT skillsets CMC Global, the second largest IT outsourcing service provider in Vietnam, can provide:

• Backend developers: C, Java, .NET, PHP, Python, Node.JS, Ruby/Ruby on Rails, Perl, Scala, and Golang
• Database: Oracle, SQL, MySQL, PostgreSQL, MongoDB, Redis
• Front end: Angular and ReactJS, HTML, CSS, JavaScript
• Mobile: Android, iOS, Xamarin, Flutter
• Full-stack

5. Political Stability

Vietnam is among the Asian countries with the most socio-economic stability; there have been zero political conflicts in Vietnam since it achieved independence in 1975. For decades, the government of Vietnam has been focusing on maintaining political stability to pay the way for economic development. 

This means, with Vietnam, you will not have to worry about waking up to disruption happening to your project.

6. Easy Communication

You will have an easy time communicating with your Vietnamese service provider, as English is the primary foreign language taught in most schools in Vietnam. 

While this doesn’t mean the entire workforce of Vietnam can speak English fluently, IT companies in Vietnam always have access to a pool of IT talents who can communicate well in English. In fact, they always have English fluency as a recruitment requirement in their job description to eliminate the communication barrier between them and their international clients. 

7. Agile and Scrum Universal Adoption

When it comes to IT project management, Agile and Scrum dominate, and they are the methodologies Vietnamese IT service providers have adopted for their software development process. 

With this in mind, you can be certain that you can always stay updated with your project progress, require necessary adjustments, as well as have the quality of the finished product guaranteed when working with Vietnamese vendors. 

8. Honesty and Transparency

These qualities are supposed to be universal among businesses instead of being something that enhances competitiveness, but unfortunately, that’s not the case in the IT outsourcing industry. The reality is, in some countries, clients can get ripped off by their vendors with hidden costs and unexpected fees. 

You won’t have to worry about this with Vietnamese IT vendors. Most of them make the provision and guarantee of transparent details about costs and timeline for clients projects their code of conduct. This means if any hidden cost arises in the middle of your project, you won’t have to be the one who pays, and if the agreed deadline fails to be met, you can claim compensation.

Of course, working with only established vendors with proven track records is always recommended to make sure any breach of contract will be taken seriously.

Final Words

All of these advantages have landed Vietnam in Market Insider’s list of the 5 best countries to outsource to in the world in 2019. 

If you’re struggling to find a reliable destination for your software project, you should definitely check out Vietnam and its top IT outsourcing companies.

If you need immediate help to navigate the IT outsourcing market of Vietnam, fill out the form below, and a CMC Global consultant will get in touch with you shortly!