Friday, October 16, 2015

IT outsourcing grows strongly

Lam Nguyen Hai Long, CEO of Quang Trung Software City, said the software outsourcing industry had been growing rapidly. — Photo bizlive

HCM CITY (Biz Hub) — Viet Nam's strong growth in the IT sector, low-cost and easily trained workforce, and support infrastructure for offshore outsourcing has made it a an emerging destination for IT outsourcing services, speakers at a conference held in HCM City said yesterday.
Lam Nguyen Hai Long, CEO of Quang Trung Software City, said the software outsourcing industry had been growing rapidly.
Speaking at the coun-try's first conference on IT outsourcing, Long said that HCM City and Ha Noi ranked 18th and 20th respectively among the top 100 most attractive global cities for software outsourcing, according to a 2015 report by Tholons, a leading strategic advisory firm for global outsourcing and research.
Nguyen Cong Ai, vice president of KPMG Vietnam, said a survey conducted by KPMG and QTSC of 80 business executives in the IT industry in Viet Nam pointed out that 98 per cent of polled firms rated Viet Nam as an attractive market for ITO businesses and indicated that they would invest in expanding business in the country.
Rising labour costs in other ITO hubs like China and India could trigger more opportunities for Viet Nam, he said.
Viet Nam has a skilled labour force with more than 40,000 engineers graduating each year from 290 universities across the country, in addition to 160,000 Vietnamese studying overseas.
Vu Anh Tuan, general secretary of the HCM City Computer Association (HCA), said that Viet Nam's further integration in the global economy, via foreign trade agreements, including the Trans-Pacific-Partnership Agreement and ASEAN Economic Community, would also help improve the country's infrastructure and the quality of labour force as well as business opportunities for out-sourcing firms.
However, delegates at the conference said that though Viet Nam's labour force was indeed professional, language competency remained a barrier for the industry. They said it was still difficult to recruit a large, skilled software team in the country.
Another problem is the low awareness about intellectual property rights and copyright issues, they said.
Ai urged enterprises to co-operate more with universities and colleges, and encourage them to provide more practical training curricula to match businesses' requirements.
To develop the domestic ITO industry, the Government and IT enterprises should work together to improve certain areas affecting the industry, including taxes, human resources, infrastructure and marketing, he added.
Representatives of IT firms at the conference urged improvement in the stability, speed and bandwidth of the electricity, telephone and internet infrastructure in the country.
Yuko Adachi, vice president of research at Gartner Asia-Pacific, said that domestic IT firms should also work closely with other providers, industry associations and government agencies to address concerns over data security.
The environment of offshore IT outsourcing is dramatically changing due to increasing cost pressures and uncertainty in the global economy, as well as emerging digital technologies such as automation and smart-machine-enabled services, she said.
ITO companies must prepare for the new competition from smart machine-enabled services, she added.
Ai said he agreed with Adachi, and urged Vietnamese firms to create a breakthrough in the smart machine field and not to rely on low-cost labour as a way of doing business, which would be inefficient in the long run.
Tuan said firms need to focus more on improving product quality and intellectual property rights as well as hiring qualified human resources to meet customers' requirements and capitalise on opportunities the TPP agreement will bring.
Organised by the QTSC and HCA, the two-day Viet Nam ITO conference attracted about 400 local and international business leaders, government representatives, entrepreneurs and education representatives. About 100 of that number were international investors and vendors from the US, Japan, Europe, Australia, Korea, Singapore and other countries. — VNS

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