There are certain ways for businesses to outsource their software projects to vendors across the globe, where the development centers can reside on-shore, offshore, and near-shore. Let’s consider in detail as follow:
- Onshore outsourcing refers to the act of customer companies working with development teams of software companies that are located in the same country. The advantage of onshore outsourcing is that there are virtually no language barriers which makes communication much easier and eventually, making outsourcing more effective. However, in return, customers may have to pay more for development costs.
- Offshore outsourcing means working with development teams in other countries. This is the most cost-effective option due to low labor costs, and also online communications channels (e.g. Emails, VoIP Phones, Zoom video conferences, etc.) making it possible to effectively manage software projects remotely.
- Nearshore outsourcing companies work with customers in neighboring countries.
- Staff augmentation: Outsourced developers work remotely together with your in-house team and are managed by you directly. Key benefit: Filling in the skill and resource gaps within your development team.
- Dedicated team: An outsourced team covers a part of the development project and is managed by a vendor’s PM who regularly reports to you on the progress. Key benefit: Expanding software development capabilities and minimizing management efforts.
- Full process outsourcing: A vendor sets up the development process and takes full responsibility for the project and all related risks. Key benefits: Released time to focus on core business activities, streamlined development and reduced costs of the project due to a vendor’s expertise.
Based in Vietnam:
The main reasons why Vietnam is considered one of the best software outsourcing destinations are the talent and affordability of human resources and its strong technology base.
- Young Population and High IT Talent Density
Southeast Asia holds a large pool of IT experts – more than 10 million developers. Of all the regions, South East Asia has the lowest labor costs for software development. Vietnam especially has a young population – 70% of the population is under 35 years of age, and a concentration in IT, focusing on Machine Learning, Artificial Intelligence, and Mobile Applications. Vietnam is also a middle-income country and one of the most dynamic emerging countries in the East Asia region, which means the cost of labor will be affordable, and the education level is increasing.
- One of The Top IT Hubs of The World
According to the global real estate adviser Cushman & Wakefield (C&W),Vietnam topped the Global Rank for top outsourcing locations in 2015. Vietnam is also considered the top software outsource country for Japanese businesses and many global partners, including Apple, IBM, Intel, Microsoft, Bosch, etc. The market size is predicted to reach US$300 billion in 2025, making it the fastest-growing location for software services.
Despite being a late player as Vietnam has a relatively short history of software outsourcing, Vietnam’s success has over 400,000 IT engineers, with over 50,000 IT students graduating annually from 153 IT institutions.
- Cultural Fit
Cultural fit is an important consideration when outsourcing to any destination. The Vietnamese culture is described as friendly, hospitable, and hardworking. In addition, the Vietnam workforce is known for its dedication, discipline, and team orientation – which are ideal characteristics for outsourcing.