Outsourcing: From expectations to reality

The software outsourcing industry is expected to change the face of Vietnam's information technology industry. However, nearly 10 years, businesses seem to be struggling a lot .

Small and sporadic

With IBM opening a global service center, Boeing is committed to supporting training for the Vietnamese information technology industry recently as well as the growing presence of technology corporations to help businesses in the industry more excited.

This shows that the belief in Vietnam's information technology industry is increasing. However, businesses admit that long-term opportunities are not small but there are too many difficulties to embrace.

The biggest difficulty that software outsourcing companies are facing is the sporadic development, lack of cohesion and professionalism. In general, the scale is still quite small with only three businesses having more than 500 engineers (FPT, TMA, FCG Vietnam), the rest mainly from a few dozen to over 100 people.

The group of enterprises with relative scale has the participation of overseas Vietnamese. Thanks to the experience and the existing relationship of overseas Vietnamese, some businesses have participated in areas that require highly skilled resources such as TMA in some telecommunications projects; GlassEgg outsourcing game applications; SDS processes electronic control software, GlobalCyberSoft on automation .

With foreign enterprises, apart from FCG, with about 700 engineers involved in telecommunications and medical projects, other businesses mainly do data digitization. Recently, the market participation of many Japanese enterprises in an effort to invest in a source of bridge engineers or link with local companies to create satellite processing resources, aims to exploit the software giant market. Japanese giants are a bright spot.

However, according to experts, there is still a long time to wait for this investment to grow. Meanwhile, domestic enterprises mostly derive from exploiting the domestic market are also shifting to investment in human resources to seize opportunities from export processing. However, apart from FPT with nearly 2,000 programmers, most businesses only have a few dozen engineers.

It seems that it is difficult to expect the IT industry's breakthrough with such a 'thin' business force in the near future. By comparison, Vietnam's software manpower in 2006 was about 25,000, far lower than the number of 70,000 employees in Infosys in India or 40,000 outsourcing employees only for IBM.

Knowing that comparison is a reluctance, but partly shows that the outsourcing industry still has a lot of work to do to reach the international market.

Opportunity paradox

According to the Information Technology Industry Department, some software markets are opening up many great opportunities like the US despite the software surplus but every year, imports still account for 30% of the total software spending worldwide and outsourcing is approximately 20 billion dollars.

Meanwhile, Japan accounted for 20% and 17 Western European countries accounted for 23% of consumption and the trend of outsourcing to developing countries like India, China, Eastern Europe and recently ASEAN also increased very rapidly. .

However, looking at the export turnover from Vietnam's software outsourcing in 2006 with 90 million dollars mainly focused on three major markets: North America, Japan and Europe to see opportunities for Vietnam despite many but it is not easy to find a foothold in this division of labor.

Mr. Nguyen Huu Le, President of TMA Solutions, acknowledged that processing is increasingly complicated, high value and larger scale. Therefore, it is difficult to maintain a competitive advantage only based on labor costs, but to strengthen the training of human resources to keep up with the international level.

According to General Director of Vietnam FCG Ngo Hung Phuong, the software outsourcing industry is really in an optimistic phase because of forecast that supply is still smaller than demand until 2020.

According to him, in fact businesses are not too worried about finding projects but the problem is how to penetrate big and stable markets. The current level of human resources for information technology in Vietnam has improved a lot due to a long time of rubbing, but still relatively young and inexperienced compared to other countries. As a result, there are not many people who are able to carry out large and complex projects while the requirements of customers are increasing.

' When the market opens, businesses have to compete more fiercely on resources ,' said Phuong.

Need to create specialization

According to Dr. John Vu, Academician of the Academy of Science and Technology, Chief Engineer of Boeing Information Technology Center, small-scale is the cause of difficulties and obstacles in the integration of Vietnamese enterprises. with the world. If the personnel is strong enough, it will build trust with partners and also easily create long-term cooperative relationships.

To expand the international market, the solution is not merely a joint venture or a merger, but it can link project execution resources, creating a common brand between 20-30 small companies rather than companies. single. The level of management through quality certificates is also expected by international customers from outsourcing companies so businesses need to focus on branding, building a good financial and management system to find get a place.

At the national level, according to Dr. John Vu, Vietnam also needs to shift from a product-oriented tendency to a service by focusing on services such as software outsourcing, service management (BPO). ), data storage (MSO), are areas that can be profitable as well as create more jobs.

The international trend is now more important to the value of work and relationships than cheap human resources. If only low prices, there will be very few high-value offers. Currently, European enterprises outsourcing processing often do not consider costs to be the main factor but focus on the supply of valuable services such as expert systems and local market access.

On the other hand, Vietnam is also very difficult to compete with well-organized competitors such as India and China in the international market. Therefore, research is needed to identify specialized skills, invest in research and development (R&D) to identify the strengths of the IT industry and develop future opportunities. .

In addition, the State should also focus on training resources with a number of specialized skills to increase the competitiveness and development associated with national communications, implementing marketing and promotion strategies. specifically to 'offer' to the world market.

' It is necessary to create a separate path but to act in a comprehensive way to change the face of the Vietnamese IT industry in the global business chain ,' Vu concluded.