Vietnamarewardingdestinationforoutsourcing

Many companies (especially IT) are in the constant lookout for a rewarding outsourcing destination off
late. The reason is that companies are under pressure to produce quality products and deliver
impeccable services more efficiently and at very tight budgets. For this reason, companies are looking
out to establish a working offshoreonshore model, which is a lucrative outsourcing business model.
Despite India, Pakistan, China and Russia have successfully implemented this model and occupy
worlds major market share, Vietnam on the other hand is sprouting up slowly and steadily. Here are
toptenreasonswhyyoushouldchooseVietnamastheperfectoutsourcingdestination.

ToptenreasonstochooseVietnam
1) Outof90millionpopulationoverhalfofit(45%)areworking
2) From year 200812, the average FDI (Foreign Direct Investment) capital was close to 11
billionUSD
3) Extensive support from factors that include PEST (political, economical, social and
technological)
4) It is one of the most secure and stable economies. Vietnam is a member of WTO since the year
2007
5) It is 50% less expensive than other Eastern European countries and 30% less expensive than
India
6) A very stable and strong political system that has not fought with any neighboring countries since
1979
7) Vietnam Government announced tax incentives for software companies and it reduced costs of
telecom
8) Heavily invested in HR (Human Resource) development and had set up many IT parks that
includeSaigonSoftwareParkandDaNangSoftwarePark
9) Intellectual property protection improved largely. Between the years 200311, software piracy
reduceupto9%
10) Social environment setup is incredible with 60% of total population under 30 years of age, 90%
literature rate, English language being taught as a major foreign language from 6
th
grade, over
30000 IT graduates pass out every year, IT training programs in about 400 universities and
colleges and finally attrition rate is about 10% and less with Ho Chi Minh city topping the top 50
outsourcingcitytohavelesserattritionrates
KeyfactsandfiguresaboutVietnamsoutsourcingmarket
(a) As per AT Kearney, it has listed Vietnam in the top 10 list for Global Services Index location
fortheyear2009and2011
(b) AsperKPMG,Vietnamisthenextoutsourcingmarketexpectedtohaveamajorboom
(c) 1billionUSDwasinvestedbyInterCorporationinSaigonTechPark
(d) About 2.2 billion USD was invested by Samsung Corporation. Vietnam became the major hub
forSamsungsmobilephonemanufacturing
(e) IDGhadallocatedabout600millionUSDforVietnamssoftwareindustryasinvestmentfunds
(f) Many Fortune 500 companies have already chosen Vietnam as their next outsourcing
destination. A few to mention are Oracle, IBM, Toshiba, NTT, Emerson, HP, Panasonic,
AlcatelLucentandFlextronics
For all the above reasons, Vietnam is most soughtafter destination for BPO, KPO and IT outsourcing
andconsulting.ThecountrysgovernmenthassetupSpecialEconomicZones(SEZs)forthispurpose.
As there would always be a negative factor to add on any industry, Vietnam also has few impending
challengestomention,howeververylimited.Theyare:
CulturalbarrierbetweenEuropeandVietnam
As per VINASA (Vietnam Software Association), the country has only 15000 qualified and
trainedsoftwareengineers