Nowadays, digital transformation has become more imperative than ever thanks to the multiple advantages it brings to businesses, for instance, enhancing customer experience, increasing internal integration and driving rational data insights. The initiative has created a great demand on application development, thus the huge need of qualified software engineers.
The challenges in recruiting IT talents in high demand has led businesses to choose outsourcing their software projects with several practices, in which adopting an offshore dedicated development team seems to be an effective solution. The article below will give some insights about offshore software outsourcing, why Vietnam for offshore software outsourcing and how to choose a best offshore dedicated development team.
What is offshore outsourcing?!
What is an offshore dedicated team?
Why should businesses hire an offshore dedicated team?
Why is Vietnam a good place to hire a qualified offshore dedicated team?
How to choose the best offshore dedicated team in Vietnam?
1. What is offshore outsourcing?
Offshore outsourcing is a method of software outsourcing.
Software Outsourcing is the practice that a company delegates a software project to an external enterprise that has resources, talents, capabilities, and time to handle the required business needs.
And offshore outsourcing is choosing the third party for software projects in a different country, usually in a developing country where labour cost is significantly lower than cost in the country your company is located. Cost-effectiveness is one of the most commpelling advantages for companies to adopt offshore outsourcing.
In a variety of offshore outsourcing models, offshore development center (or offshore dedicated development team) is the most favorable.
2.What is an offshore dedicated team?
The offshore dedicated development team model means that a company hires a remote development team to implement a software project. A dedicated development team consists of talents specially selected for your project and works as your temporary full-time remote staff.
The offshore development center will be responsible for a wide range of tasks, both managerial and technical, including analytic and system design, updating software, writing new code and so on. The IT outsourcing partner will share all responsibility for the product development cycle, free businesses from intensive management. However, this outsourcing model does not take control over the business. You are eligible to manage the team and the development process by setting proper communication and KPIs.
For more insight about software outsourcing models, read the article: How to choose the best software outsourcing models
3. Why should businesses hire an offshore dedicated team?
Guaranteed results and deliverable quality: Dedicated teams are able to shorten the development process without compromising your software's quality thanks to the availability of talent software engineers dedicatedly working on your project.
Increased control over the development process: Given your shared ownership of the deliverables, a dedicated team model allows you to retain more control over the development process than a more traditional project-based outsourcing model.
Significant cost efficiencies: Adopting an offshore development team allows you to access qualified IT talents in developing countries where labour cost is significantly lower than yours. Also, savings from recruitment and management costs can help reduce your development costs.
Reduced time commitment for your business: The offshore development outsourcing team frees you from the responsibility of managing your project on a day-to-day basis. Therefore, you will have more time for other critical management tasks.
In the report, Vietnam is very attractive in terms of cost with its sizable digital workforce pool available for IT outsourcing and BPO. In general, Vietnam was ranked number five (05) moving up one position since the last report. Big foreign companies in the world continue to invest in Vietnam, showing continued momentum for the ICT industry. Since 2000, Japanese IT companies see Vietnam as the offshore outsourcing solution for their shortage of labor force. Vietnam is seen as an attractive alternative to China thanks to its low cost, a large pool of skilled software engineers and cultural similarity.
Popular Outsourcing Destination with a Large Pool of Developer Talents
The most prominent reason that makes Vietnam one of the most sought-after software outsourcing destinations is the availability of a highly-skilled IT workforce. The abundance of talent makes this country a perfect choice for software outsourcing. In Vietnam, Software development is increasingly becoming a popular career choice for the workforces and newly graduates. More than 25,000 technical engineering graduates are coming out every year from different universities in Vietnam.
Young software developers and other IT professionals in Vietnam have the expertise to make use of cutting edge technologies such as cloud computing, machine learning, the internet of things (IoT), and blockchain to deliver outstanding software solutions. Moreover, these young people have hands-on experience working with many large scale projects. They apply their creativity and technical brilliance judiciously to offer the finest quality software outsourcing services for their clients.
Stable government policies and fast economic growth rate
Vietnam easily finds a place in the list of most politically stable countries in Southeast Asia. The economy has been experiencing rapid growth for the last 30 years. Both of these factors play an important part in strengthening the Vietnam software outsourcing industry.
During the last 15 years, this country has been undergoing tremendous transformation. According to the World Bank statistics, the GDP per capita in Vietnam increased by 2.7 times between 2002 and 2018. It crossed $2700 in 2019. The World Bank says that 45 million people were lifted out of poverty during this period.
The GDP per capita in Vietnam is expected to reach $2185 by the end of 2020, according to Trading Economics. Various factors such as economic stability, right policies, and proper governance contributed immensely to the rapid progress of Vietnam.
Vietnam effectively managed the Coronavirus pandemic
The IT outsourcing industry in Vietnam has remained a steady force of productivity despite the dual health and economic crises pummeling much of the globe and crippling nearby offshoring epicenters like India and the Philippines.
Swift and strict, the approach from the government was significantly embraced across Vietnam. Thousands of high-skilled Vietnamese tech workers that support businesses worldwide with offshore services have been able to maintain service and meet demands. This early, decisive action has meant a strong return to business productivity and tech advancement in Vietnam, making it one of the only countries in the world to forecast economic growth in 2020. (Source: Forbe)
Competitive outsourcing cost is another significant reason that makes Vietnam special. According to the CIO Magazine, Vietnam is approximately 90% cheaper compared to developing software in the USA. In fact, the average hourly rate for hiring a senior software developer in the US is $100 - $170, a developer with similar experience and technical skills can be hired for $25 in Vietnam This factor attracts many global giants to rely on Vietnam to meet their software outsourcing requirements.
The costs charged by the Vietnamese outsourcing companies are even cheaper than other outsourcing markets in Asia like India, China. While hourly cost of Vietnam talents drops at $15-25, it takes more than $40 in Indian counterparts.
5. How to choose the best offshore dedicated development team in Vietnam
The quality of a software development team greatly depends on the quality of the software outsourcing service provider. Good software vendors attract more qualified talents to join the teams, and also own better leadership and management.
However, the increasing availability of software outsourcing companies in Vietnam may challenge businesses to choose the right provider for the software development project. So, how to choose a good software vendor? Below checklist can give you some clues:
Software provider's credentials and certificates:Technology partners’ background is crucial for the evaluation. Research for their businesses’ experience and expansion. Certificates and awards can indicate prestigious vendors, especially ISMS certificate should be a must to ensure your business data privacy.
References in your industry: Partnering up with a vendor who has experience in your industry may ensure the development process will be streamlined
Level of customization and scalability a software solution offers: As companies expand their software should be able to scale accordingly. Ability to scale up the system is a sustainable selection
Define the project requirements and objectives
Next, you must prepare the scope of the project including all features, requirements and objectives you expect for the deliverables. You can make thorough discussion over the scope with your outsourcing provider, they can consult based on their experiences about everything you need to set up an effective offshore dedicated development team, such as team size, team structure, talent’ skill sets acquired for the development, and so on. Transparency in your expectations allows your software vendors to understand and support in selecting the most suitable software engineers to the team. Also, it enables you to be navigated in control of the process management of the final project.
Review the developers’ tech qualifications and directly interview leading candidates
After having consultation and a proposal list for your dedicated team, take time to have an overview on their technical qualifications including educational backgrounds, skill set and experience in related projects.
Moreover, depending on the team size, and the complexity of the project, you may need to have interviews with all candidates or crucial positions in the team to assess the technical background, English ability, and relevant experience to see if they meet the requirements to lead and implement your outsourcing project. Also, these interviews can be good opportunities for you to have upfront meetings with your future team member to directly discuss about your expectation, which may lead to fruitful working process and final success
Deciding a good offshore dedicated team is crucial for the success of the software outsourcing project. Being led by experts with 20 year experience in the outsourcing industry enables TPS Software to successfully assist our partners in building up potential offshore dedicated teams that drive the success for the outsourcing project and create fruitful long lasting partnerships. We hope our sharing above may help you select a promising offshore dedicated team to accompany you on your software outsourcing project.
In 4 years of operation, TPS Software has recruited 180 well-verged engineers to the team, which has enabled us to achieve successful deliverables. Also, that valuable resource allows us to be more competitive for potential software developments. We believe we have enough competencies to handle dynamic software outsourcing projects.
Contact us and have free a consultation with our expert to build a potential team for your software development outsourcing