Overview

Vietnam: The major player on the market

Vietnam is one of best places to outsource Information Technology (IT) projects, according to the recent survey of Price Waterhouse Coopers (PWC)

Firstly a recent survey by PWC put Vietnam at the top of the list as the “best destination to outsource to”, and then Ho Chi Minh City comes in at number 6 in a survey on the best cities to develop software in. Of course the fact that the country has consistent GDP growth of plus 8% second only to China and stood third on the podium at the 2007 mathematics Olympics has also had a tremendous influence

Geography

South-eastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin, and South China Sea, South of China and alongside Laos and Cambodia.

Total area: 329,560   sq km
Land         : 325,360  sq km
Water       : 4,200     sq km

Climate: tropical in south; monsoonal in north with hot, rainy season (April to October) and cold, dry season (November to March)

Culture

Vietnam is the country of 4 thousand years of culture. Long centuries ago, Confucianism built fundamental values for this society:

Vietnamese people are quite proud of their advanced culture that is imbedded within their national identity.  Further, Vietnam contains a rich mixture of religions that reflect the influences of many cultures. Due to the absence of large ethnic and religious conflict, foreigners place high value on Vietnam much more compared to other offshore locations.

Throughout the centuries, the most powerful empires throughout the world such as Mongolia, China, France, Japan, US, and the Ex-Soviet Union came and went. Therefore, the Vietnamese people were in permanent contact with all important civilisations. This interaction resulted in strong roots twining with many arms of culture. Vietnam is indeed a multi-cultural country, as it’s people always respect and preserve national identity along with cultural values.

Vietnam is also a country of festivals and holidays that take place all year round. Major festivals are Tet Nguyen DanHan thuc (Cold food), Hung King’s Temple Festival, Doan Ngo (Double five), Mid-Seventh month, Mid-Autumn Festival, etc. Each region has its own ritual holidays for blessings and giving thanks. Holiday activities of the community consist of folk games and contests. (Lunar New Year)

Work ethic

Vietnamese people have a high work ethic. They can work long hours and weekends if they need to in order to get the job done.

Striving for perfection is built into the Vietnamese psyche. They can produce quality work, yet but they can also tend to be "risk averse."

Language

Most Vietnamese are literate in the national language, Vietnamese. The Vietnamese language uses Latin alphabets and characters , and is positively influenced from it’s familiarity with Western cultural languages.

In many Vietnamese software companies, English has been considered as the working language for many years.

In addition to English as the first foreign language, more and more people are being inspired to learn French, Japanese, Chinese, Russian for the reason of business or culture.

Politic

After the war’s conclusion in 1975, Vietnamese peoplehave enjoyed the most peaceful period in their history. Nowadays, Vietnam is a stable country politically speaking.

Economy

Vietnam is continually developing countries at a high pace

Gross Domestic Product (GDP) growth averaged 6.8% per year from 1997 to 2004 even against the background of the Asian financial crisis and a further global recession. Since 2001, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. In 2007 alone, GDP grew 8.44%, while GDP per capita reached 833USD[1]. In 2008, GDP grew 6.23% with GDP per capital being estimated at US$ 1,027-1,030.

Vietnam joined the WTO in January 2007. WTO membership has provided Vietnam with an entrance into the global market, while reinforcing the domestic economic reform process.

The ODA pledged by donors for Vietnam was recorded at US$5.4 billion, while FDI jumped to US$20.3 billion from US$12 billion compared to the prior year of 2006. By early November 2008, registered FDI in Vietnam had hit US$ 61 billion. According to the Foreign Investment Agency under the Ministry of Planning and Investment, the figure reaches US$ 65 billion for the whole year. FDI forecasts US$30 billion in 2009 due to world economic slowdown.

Population

Vietnam is a country with a population of about 86 millions[2]. About two-thirds of the population is younger than 35

92% literacy rate

26,3 % is under 14 years old

67,9 % is between 15 and 64 years old

Labour costs

Labour costs are very cheap. In fact, Vietnam's overall salary levels remain the lowest among all outsourcing countries. Vietnam's labour cost are  57% and 66% for both IT outsourcing ( ITO) and business process outsourcing (BPO) less expensive than India's and China respectively and 80% less expensive  than the labour costs in the United States[3]

Salary of junior software engineer: 150$-300$ per month

Salary of senior software engineer: 300$-600$ per month

Low attrition: 10 % in Vietnam

15 % in India

Time lag

Time zone: UTC/GMT +7 hours

Difference in time zone can be a benefit for organizing round-the-clock work. Further, the overlap can be utilized for activities that require coordination.

[1] http://www.mof.gov.vn/

[2]Source from http://www.indexmundi.com

[3] Offshore and Nearshore ITO and BPO Salary Report, www.neoIT.com