How Offshore Software Development Outsourcing In Vietnam Can Help Startups Save Cost


It is undeniable that cost saving is one of the main reasons why many companies choose to outsource to third-party vendors to help them deploy all or some specific software development projects or to support their companies’ IT infrastructure.

India or China has long been the two most popular offshoring destinations in Asia. However, we would like to introduce you to the new emerging IT outsourcing market in Asia: Vietnam.

The Covid-19 Situation

Without any doubt, COVID19 has been the black swan ever since the Great Recession in 2008. We have now experienced an uncertain business landscape.

The pandemic causes obstacles and challenges for businesses around the world to deal with like market instability, the collapse of the tourism and hospitality industry, the collapse of the price of oil and the energy industry, and so on. Billions of dollars leak away as startup companies try to get control of the situation while maintaining their services and products

Not only startups but even SMEs and big organizations have to shut down parts of operations and lay off their employees. These actions might expose companies to the risks of losing customers because companies fail the customers’ expectations.

So, how can startups find the appropriate strategy to not only save costs but also maintain the top performance?

One of the strategies you might want to consider is to cut down on expensive inessential headcounts and have a more rational budget to hire an economically viable offshore team to support your business. 

A recent study by the University of Michigan Business School and the University of Pennsylvania’s Wharton School has shown that businesses can save up to US$56,000 annually when it comes to offshore software projects compared to onshore software development projects. 


How Offshore Software Development In Vietnam Can Help Startups Save Cost


But why choose Vietnam? 

The answer lies in the fact that the tech labor workforce in Vietnam has enabled this small country to surpass others when it comes to cost reduction.

Quick economy recovery with talents

Vietnam is one of the few countries that only have a few to zero cases of COVID-19 death. We are one of the first nations in ASEAN to resume our businesses.

While some other developed countries are still in restriction, we are now getting back to work. In the scenario where every business has to cut down its operation because of the quarantine order, Vietnam holds the capability to keep the business running without being disrupted while maintaining to meet the customers’ demand. 

The country’s GDP growth log is a 6 percent rate, which is faster than other offshore software development destinations in the area. 

Vietnam is also well known for its workforce, especially in the IT sector. Vietnam is expected to be in the top three countries with the highest number of engineers in the next four years. Therefore, Vietnam provides lots of offshore tech startups for companies and organizations around the world to find and hire. 

From the recruiter’s perspective, having access to a wide talent pool will save time, money, and efforts. Businesses will have more candidates with the right skills meeting their expectations. As a result, talent acquisitions have a higher chance of getting suitable talents for the roles in both short and long term planning.

Affordable and reliable

The shortage of talent is a common reason for firms to boost their onshore labor costs. Consequently, many companies often outsource to Southeast Asian countries to reduce the cost. Vietnam is in the spotlight when it comes to cost reduction since the average salary in Vietnam is lower than others, has a dependable and reliable workforce.

The average costs of a fresh developer in Vietnam are around 7,200 to 12,400 USD annually, which is 10 - 50 percent cheaper than its neighboring countries like Indonesia and Singapore (17,581 - 24,658 and 38,000 - 84,500 respectively) and 5 percent lower than the Philippines (8,300 - 12,426).

As Vietnam movies from low-tech manufacturing to a service-oriented economy, the IT market is increasingly growing. This factor leads Vietnam to be a dream destination for any businesses that want to save cost at the moment.

Criteria for choosing a Vietnam Software Outsourcing Vendor

Now we hope that we have successfully convinced you to think of Vietnam when it comes to outsourcing and offshoring. But how to choose the best vendor among so many? Here are the criteria that you might want to consider:

  • Clarify your business goals and the ultimate purpose you want to achieve during this pandemic time
  • Decide on your offshoring destination (the IT market in HCMC is slightly more mature than in HN)
  • Explore the options and narrow down the list of your potential candidates
  • Choose vendors with previous similar experience in your industry
  • Conduct research to know what IT solutions your business needs to overcome this time.
  • Negotiate a win-win contract with the vendor you have selected.

Why Us?

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If you want to know what else we can help you in, contact us to talk to our expert team to find out what we can offer you today.