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Offshoring is understood as using resources from other countries. In the field of information technology, Offshoring is usually outsourcing contracts or software development. Communication is usually done via high-speed data links, allowing engineers and managers to communicate on a real-time basis. Customers can remotely monitor the project development process and milestones on a minute-to-minute basis, quality assurance and processes

Offshoring is understood as using resources from other countries. In the field of information technology, Offshoring is usually outsourcing contracts or software development. Communication is usually done via high-speed data links, allowing engineers and managers to communicate on a real-time basis. Customers can remotely monitor the project development process and milestones on a minute-to-minute basis, quality assurance and processes

 

  1. What are the pros and cons of offshore software development in Vietnam?

When choosing a country for offshore software activities, the first and most important factor that is concerned is how to minimize the problem of cost. Compared to other countries in the region or Europe, labor costs in Vietnam are much cheaper. Therefore, it can help reduce a large amount of operating costs. In addition, Vietnam has increasingly more tax incentives and investment policies. Vietnam is a country with abundant labor resources, many young people who are increasingly creative and adaptable to help companies respond and adapt quickly to market demand. Vietnam always upholds and invests in the education and quality of human resources, so businesses can have access to talented people

 However, offshore software in Vietnam also faces certain difficulties. The first to mention is the issue of communication and information exchange. Geographic segregation interferes with face-to-face meetings and conversations, or time zone issues that lead to differences in working hours, or language barriers the foreign language qualifications of Vietnamese labor has improved but still is not appreciated. Cultural differences are also a major obstacle when Vietnam is a multicultural and multicultural country. Information security issues when the Vietnamese legal system has no specific law on information security may pose some risks.

 

  1. What makes prospects for offshore software development  in Vietnam?

According to "Doing business in Vietnam" report of VCCI (VietNam Chamber of Commerce and Industry), Information and communication technology (ICT) is a booming sector in Viet Nam, supported by world-class telecommunication infrastructure. 

ICT revenue in 2018 reached almost US$100 billion, posting an 8% increase compared to 2017. Software export revenue is estimated to reach US$3.5 billion, an increase of 11.6% over the previous year. 

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Information revenue of Vietnam in 2018 ( Source: Doing Business in Vietnam-VCCI)

Within the ICT sector, business process outsourcing (BPO) is an industry that is poised for growth due to:

+ Growing talent pool: the IT industry is being evaluated as one of the key industries for Vietnam. More than 153 institutions have trained about 50,000 employees for the IT industry. Many experts have said that Vietnam will be an ideal destination for leading technology companies in the world and in the region to locate and develop products. The country’s ICT sector has around

900,000 employees, with an annual growth rate of 7-10%, according to the Ministry of Information and Communications.

+ A vibrant digital sector: VietNam is home to a vibrant start-up environment. In 2018, local start-ups received US$889 million in funding, triple the amount in 2017, according to Topica Founder Institute. Amongst start-ups in Viet Nam, the majority are based on technology and digital (FinTech, E-commerce & TravelTech).

+ Competitive cost: VietNam’s labour costs for IT offshore outsourcing and business processes are about 30% less than in India. Operation costs are also estimated to be cheaper, at about one third of the levels in India.

+ Companies are diversifying from China and India: ​Due to the US trade war with China and its intention to end preferential trade treatment with India, Viet Nam has become an attractive alternative destination for BPO.

  1. What are the risks of offshore IT development Projects and How can we manage them?

A RISK FRAMEWORK FOR OFFSHORE PROJECTS: Risks often can be sorted  into basic categories, which are not necessarily mutually exclusive: financial, technical, managerial, behavioral, and legal.

Financial risks deal with budget and cost.

Technical risks deal with tools, techniques, and standards.

Managerial risks deal with decision making and reporting.

Behavioral risks deal with managing and leading people.

Legal risks deal with governmental laws and regulatory considerations.

 

PERFORMING RISK CONTROL: Like other project controls, the controls for offshore IT outsourcing of development projects can be classified into one of three general categories: preventive, detective, or corrective.

  1. Preventive controls mitigate the impact of a risk or stop it before having an impact.
  2. Detective controls reveal the existence of a risk and preclude future impact under similar conditions.
  3. Corrective controls involve determining the impact of a risk and require establishing measures to preclude future impacts.

 

  1. How to choose an appropriate offshore software partner?

To choose a truly suitable partner, you need:

-       Determine the needs and goals of your business: When conducting offshore, your business will spend a certain amount of costs, and will face a number of risks such as losing information, losing business secrets, or accidentally creating potential competitors. Moreover, it is not certain that offshoring will help your business to reduce costs or focus on main activities. Therefore, businesses need to know what your needs are, at the same time answering questions such as What activities should be conducted offshore, or When offshore operations are on the business what risks are  is extremely necessary.

-       Look for experienced partners on similar projects: Offshore software market has many active companies. Each company will have different strengths and operational expertise. Therefore, when choosing a partner to cooperate with, not a large or reputable company is an advantage because the cost can be very high and inefficient. Instead, you should choose company that has the expertise appropriate to your needs and / or have implemented similar projects at a reasonable cost and are really effective.

-       Select partner who has the most cultural fit: Cultural differences can become a major barrier for you and your partner. How would you feel if you and your partner disagree about the language that lead to the inability to understand each other ?. Or are your views and partner conflicting? Any of the above can lead to risks. Therefore, choosing a culturally appropriate partner for your company is extremely important. This will help you and your partner understand each other better, your partner will know what your business is really needed and meet your requirements. At the same time, if you find the right cultural partner, your company and partner can cooperate long-term with other projects in the future.

-       Pay attention to information security: offshore development security is something you must think about from day one, before even signing on with an outsource provider. Trade secrets, sensitive customer data, and valuable IP all pass through the hands of your partners as they work to bring your new idea to life. There are people out there who will try to steal that data. If they succeed, then they can threaten your entire business.

-       Interested in the ability to handle risks: One of the advantages of offshore IT outsourcing that determines the outcome of a project is risk analysis. Outsourcing some components of a business process that helps you transfer certain responsibilities to an outsourcing company. Identifying and preventing all possible risks is essential to achieving success.

For offshore software development, IMT Solutions is one of the best options, because:

-       IMT Solutions is one of the prestigious units with many years of experience with many projects that can meet customer needs and goals.

-       Providing gastric juice with innovative solutions and advanced technology

-       Professional and skilled staff

-       Information security is given top priority, along with professional risk management and handling capabilities, giving customers confidence and peace of mind.