Vietnam Software Outsourcing: Benefits, Cons, More

Software outsourcing has become increasingly popular among companies looking to improve their efficiency and cost-effectiveness. However, there are many other compelling reasons to consider outsourcing, including access to specialized expertise, flexibility, and scalability. While China and India have long been popular outsourcing destinations, Southeast Asia has emerged as a new hotbed for software development outsourcing.

Within Southeast Asia, Vietnam is a standout location for outsourcing due to its highly skilled workforce, competitive pricing, and favorable business environment. In this article, we will explore the benefits and challenges of outsourcing software development to Vietnam, as well as provide tips for doing it successfully. We will also recommend some of the top software outsourcing companies in Vietnam to help you get started.

Key Benefits of Software Outsourcing to Vietnam

Let’s discuss the five benefits of outsourcing software development to Vietnam:

Lower Costs

One of the biggest benefits of outsourcing software development to Vietnam is the significant cost savings it provides. The cost of living in Vietnam is much lower compared to more developed countries, resulting in lower operational costs such as office space rent, electricity charges, and employee salaries.

According to Salary Explorer, the average annual salary of a software engineer in the United States is $91,900, while in Vietnam, it's only around $8,419 per year (208,800,000 VND). In Australia, software developers earn around $61,546 per year (91,700 AUD). In the UK, they earn approximately $78,821 per year (66,400 GBP), and in Singapore, they earn $67,776 per year (93,120 SGD). Because of this the cost of developing software applications in countries like Singapore, Malaysia, Hong Kong, Australia, the UK, and the US is going to to be higher than Vietnam.

With the low labor costs in Vietnam, software development companies in the country can offer competitive rates while still delivering high-quality work. This allows businesses to allocate more resources to other core functions while still receiving excellent service from Vietnamese outsourcing companies.

Outsourcing software development to Vietnam can be an effective strategy for businesses with limited resources. It frees up time and resources that can be used to focus on core business goals, while also providing a way to address technical challenges without having to invest in-house.

Vast Talent Pool

Software developers are in high demand throughout Vietnam. The country is home to many talented individuals who specialize in providing cutting edge technology solutions, including mobile app design and development as well machine learning models, AI and other emerging technologies.

What makes Vietnam different that other countries is that most people are already introduced to coding at school during the 8th grade. By starting to code from a young age, developers are able to get experience and by the time they graduate from university they are ready to hop on to a big project without any additional training. Most programmers in Vietnam right now are also millennials aged between 20 and 35 years old, making them more energetic, adaptable and exited to do big things in their field.

Besides that, the Vietnamese government knows the importance of technology in the countries future and growth and is actively working with companies to improve computer science education from the foundational ages. This alongside English language education is helping the country create a vast talent pool of software engineers and technology enthusiasts.

High-Quality Services

Vietnamese software companies are known for their high-quality services, which they provide with the latest technologies and a top notch tech infrastructure. You can be assured of high-quality work when you hire a software development outsourcing company in Vietnam. Vietnamese software companies have solid teams and are committed to meeting deadlines, which will save your business time from having to deal with any issues that arise during the process.

Round The Clock Services

Something that businesses need to take into account when working with an offshore development company is the timezone. Some projects require round the clock development, some projects require real time communication, and others are flexible on communication.

Companies in the United States, United Kingdom, and Europe like the idea of round the clock development, and by outsourcing to Vietnam, they get just that. Round the clock development essentially means once the work day in the US ends, it continues in Vietnam, so once the US team wakes up the next day, they can view the work the Vietnam company did while they were sleeping. By doing this, they are essentially working while they sleep, making this a very attractive benefit of outsourcing software development to vietnam.

For projects that require real time communication you want to work with a company in a similar time zone. For example countries like Singapore, Malaysia, Australia, New Zealand, Hong Kong would benefit by being located on a similar time zone to Vietnam so it's easy to set meetings as both companies would have similar office hours.

Some projects just need to be built and don't require real time communication and it this case it's also easy for companies all around the world to outsource to Vietnam as communication can be scheduled when convenient for both sides even though one teams office hours will be different to the others.

Main Challenges of Software Outsourcing to Vietnam

Let's take a look at some of the main challenged companies face when outsourcing to Vietnam:

Language Barrier

English is the global business language so if you're working with a company in a country besides your own, it's very likely that both companies will use English to communicate. For a partnership to be successful between 2 companies there needs to be good communication, and this means that both companies should be fluent in the English language.

The official language in Vietnam is Vietnamese and not everyone can speak English. This is changing very quickly though as the government is pushing English language education in order for people to be more competitive at work. In Vietnam, speaking English is essential for higher paying jobs so you will find that it's more commonly spoken in big cities such as Ho Chi Minh City, Hanoi, and Da Nang. As of now just over 50% of the population speaks fluent English, and this is going to increase over time.

Software developers generally have a good understanding of the language as most programming resources are in English and they are forced to learn the language mush faster.

But this isn't an issue anymore if you want to work with an outsourcing company in Vietnam. A good company will have English speakers to communicate to their clients and it's possible that the company might even be owned by an English speaking foreigner. So just make sure the team you work with speaks your language and all will be good!

Different Time Zone

Having a team in a different time zone allows for more efficient workflow as it extends the hours during which tasks can be completed. Projects can be worked on during the day in one country and then passed on to a team in a different time zone, where work can continue while the first team is asleep. This enables faster turnaround times and quicker project completion, which can ultimately result in a competitive advantage for your business.

Moreover, outsourcing to Vietnam provides additional benefits as the country is in a favorable position with respect to time zones. Vietnam is in a similar timezone to Singapore, Malaysia, Japan, South Korea, Taiwan and China, which makes it convenient for companies that do business. In addition, Vietnam is only a few hours ahead of Australia and Nez Zealand, which means that it is possible to work with clients there during normal business hours.

For companies located in the United States, Canada, or United Kingdom, the timezone difference could be considered an issue. But this is actually more of an advantage. As your day comes to an end, there day is just about to start, and having a team active 24 hours a day is a strong competitive advantage.

Overall, the time zone difference can be turned into a strategic advantage for companies that outsource their software development projects to Vietnam. By having access to a workforce that is active 24 hours a day, businesses can complete their projects quickly and efficiently, while providing better customer service to clients in different regions of the world.

Cultural Differences

When you work with a company in a different country, one of the inevitable things you need to deal with is cultural differences. This is both work and non work related. Teams in different countries might have a different approach to working and also communicating. This isn't much of an issue but a good pointer her is to focus on good communication to ensure that there are no misunderstandings and things will flow smoothly.

The best software outsourcing companies in Vietnam have international teams with people from all different countries and also have experience working with companies in multiple countries so it will be much easier to work with a company like this.

Top Software Services to Outsource to Vietnam

When it comes to outsourcing software services to Vietnam, there are several popular options to consider. Here are the top software services you can outsource to Vietnam:

Custom Software Development

Vietnam has a vast talent pool of software developers who can build custom software solutions to fit your specific business needs. Whether you need a web-based solution, a mobile app, or a desktop application, outsourcing custom software development to Vietnam can help you save costs while delivering quality results.

App Development

With the rise of mobile technology, app development has become a popular service to outsource to Vietnam. Vietnam has a large number of skilled mobile app developers who specialize in iOS and Android app development, making it a great destination for businesses looking to develop their mobile app.

Enterprise Software Development

Enterprise software development is another area where Vietnam has a lot to offer. The country has a growing number of experienced developers who specialize in building complex software solutions for large organizations.

Startup MVP Development

For startups looking to build their minimum viable product (MVP), Vietnam can be a great destination for outsourcing. The country has a growing startup ecosystem and a large pool of talented developers who can help turn your ideas into reality.

AI and Machine Learning Development

With the rise of artificial intelligence and machine learning, outsourcing AI and machine learning development to Vietnam can help you access a pool of talented developers with experience in this field.

Software Automation

Automation is becoming increasingly important in today's business environment. Vietnam has a growing number of skilled developers who specialize in building automation solutions for businesses in various industries.

Onshore vs Offshore Software Outsourcing

With outsourcing software development, there are 3 main services companies provide. Nearshoring, offshoring, and onshoring. Let's take a look at that the differences are:

Onshoring

Onshoring means that you would outsource your software development needs to a company in the same country as you are located. This means that they will handle all your development so you don't need to manage a technology team. This could be beneficial because you will work on the same or similar time zone, speak the same language, and understand each others culture, which makes it easy to communicate. This can be very beneficial if your team has no experience working, hiring, training, and managing developers. You will essentially be able to access all those expertise by working with an onshore software development company.

Offshoring

Outsourcing means that you would work with a company in a different country than yours to handle your software development. For example companies in the United States, Australia, United Kingdom, Japan, or Singapore might work with an offshore development center in Vietnam. Similarly to onshoring this moves the need to worry about anything technical to another entity. But this provides additional benefits, mostly relayed to cost savings and access to talent. A country like Singapore is one of the largest startup hubs in Asia, but it's a relatively small country so companies often need to look offshore to find more developers. The challenges with this is possible time difference, language barrier, and cultural differences, but most companies understand those and make sure to make the partnership as easy as possible.

Nearshoring

Nearshoring is pretty much the interchangeable with outsourcing. This just suggests that the country you chose to outsource to is nearby or neighboring yours. If your company is in Singapore and you outsource your development to Vietnam, this could be considered nearshoring. There are some additional benefits to this, like having easier access by flights for in-person meetings, similar time zone, and possible a better understanding of the country and work culture.

Best Cities for Outsourcing Software Development In Vietnam

Vietnam is a great place to develop your business for the best outcomes. The three famous cities that provide top software development services are Ho Chi Minh City, Da Nang, and Hanoi. Let's take a look at which cities are the best for outsourcing in Vietnam:

Ho Chi Minh City

Located in southern Vietnam, is the business capital of Vietnam, Ho Chi Minh City, or Saigon as it is sometimes called. This is the goto place if you want to find a software development company in Vietnam. The city is where you will find most startups, software developers, investors, and software projects. Ho Chi Minh City University of Science, Ho Chi Minh City University of Technology, and University of Information Technology, are some of the popular universities in Ho Chi Minh City, that produce excellent software engineers. Infact, Ho Chi Minh City University of Science was ranked 3rd in the world for producing the best coders. So it's easy to see why there are so many software companies located here with the vast talent pool.

Da Nang

Located in central Vietnam is the coastal city, Da Nang. This city is known as a holiday and lifestyle destination with amazing beaches and resorts, but it is also an upcoming startup and digital nomad hub in Vietnam. The lower cost of living, high quality of life, strong community, and strategic location make the city attractive to tech startups. The city is also home to the well-known Da Nang University of Technology, which is one of the best universities to learn software engineering in Vietnam. The university produces thousands of skilled software developers every year. Because of this there is a large number of developers working in Da Nang.

Hanoi

Located in the north of Vietnam is Hanoi, the capital of Vietnam and the place best known for politics and manufacturing. Here you can find the popular Hanoi University of Science and Technology which produces thousands of skilled software engineers every year. The city is the second largest in Vietnam and there are many software developers living here.

Final Thoughts

Software outsourcing in Vietnam is beneficial due to low costs, a large skill set and robust infrastructure. There are also drawbacks like language barriers that need be overcome but overall it's been quite successful for many organizations across industries with different needs when done right!

Hopefully this article will help you fully understand how to successfully outsource your software project. Vietnam is one of the best places you can do it right now and most companies are taking advantage of that.

There are many companies that offer outsourcing services in Vietnam and many of them produce excellent results, but at the end of the day the company you choose to work with will come down to your preference. So make sure to take all the above in consideration and choose a company that will help your company succeed.