Software Outsourcing: Recovery and Development

The 2008 – 2009 financial crisis still has an impact in the world, however, many software outsourcing companies in Vietnam think that some successes in 2010 can be predicted for a quick improvement in 2011.

2010 – Survive by Ability

According to Mr. Ngo Duc Chi, CEO of Global Cybersoft (GCS), 2010 can be considered to be a successful year of GCS about customer or market and revenue. After the decline in 2008 – 2009, Japan market of GCS has recovered with some big customers and many new projects. The North American market started to recover with some big customers in the telecommunications field. Each project must be developed both in scale and valueThe ERP / SAP services in the Vietnamese market strongly develops as compared to the pre-crisis period. GCS recently applied SAP for the Bitxeco building, one of the tallest and modern buildings in Vietnam.

According to Mr. Chi, the success of GCS in 2010 with efforts to overcome difficulties; besides the global recovery, is rising of demands in Vietnam. GCS has reviewed and repositioned its product, services and development strategies of integrated solutions service (Total IT solutions) for companies in the domestic market, in addition to serving their traditional customer demands. At this difficult time, GCS built a force to satisfy the strict requirements of domestic and international projects.

Mr. Michael Hackett, Vice President of LogiGear, says that the software companies usually care about software testing outsourcing because the testing cost is approximately 30% of the software’s total cost. LogiGear Corporation continues to grow in year 2010. LogiGear is currently recruiting and hiring more staff due to the expected recovery of the U.S. and Europe markets.

Nguyen Huu Le, Chairman of the advisory council of TMA Company, commented that most of enterprises that survived after 2008 – 2009 crises have the appropriated strategy and will grow even stronger as the market recover..

2011: “Outside” slow recovery – “Domestic” opens

Mr. Ngo Duc Chi predicts: “If there are no major unexpected changes, 2011 will be a potential major year for the software industry in Vietnam, although there will not be any dramatic success. Most of the potential recovery lies with Japanese customers while Vietnam’s main customer will be mainly in North America, Europe and Japan. ”  Mr. Le also stated that European and Japanese markets will also recover slower than the other markets. Meanwhile, the Australian market and Asian companies will be more focused on maintaining the current speed of growth. LogiGear has determined that it will focus on the product development side for the U.S. market as the economy is still recovering.

With the recovery of the “Outside” economy still weak, the software outsourcing companies in Vietnam accumulated enough experiences and ability to follow the new trend in 2011: to actively focus on the “domestic” Market.  When local software companies are growing, they have the potential and business strategies to make investments  in management systems to help increase their competitive advantages.

GCS continues to offer the local market, Total IT solutions package from, Automation, to total management services, to control the production coordination, and the unit examination. TMA also participated in “domestic” since 2009 with mobile solutions software. Currently, the mobile solutions center of TMA has 10 products deployed inside and outside Vietnam, and participates in providing solutions to enterprises who apply 3G for their business. TMA has also established an Information Development and Research Center (IDRC) in Quang Trung Software Park in order to enhance the cooperation between businesses, scientists, Vietnam universities, and overseas Vietnamese.  IRDC’s goal is to create a “Made in Viet Nam” IT products in many areas such as: Software, Telecommunications, mobile, healthcare, and green technology.

Lack of high quality resources

In 2011, some enterprises want to scale up but they fear of not being able to find qualified candidates. According to Mr. Michael Hackett, many reports have evaluated and find that Vietnam currently has a shortage of resources in high quality staff. Therefore, in 2011 LogiGear will focus on recruiting highly skilled and qualified professionals. In addition, LogiGear will focus on English skills, increase professionalism in business communication, multicultural communication, and customer relations for its staff.

Mr. Ash Bhardwaj, President of Infonam Company (formerly PMPSD) stated that human resources in Vietnam are young and have basic skills in programming better than in Thailand and Malaysia but programmers have to be re-trained every 6 months.

According to Mr. Chi, the competition for human resources and turnovers will be certainly continuous as labor costs will be adjusted. “The government should focus on policies to attract foreign experts and overseas Vietnamese to participate in resources development and training. The policy could include tax incentives and educational investments.”, He suggested.

LogiGear Corporation provides global solutions for software testing, and offers public and corporate software testing training programs worldwide through LogiGear University. LogiGear is a leader in the integration of test automation, offshore resources and US project management for fast, cost-effective results. Since 1994, LogiGear has worked with Fortune 500 companies to early-stage start-ups in, creating unique solutions to meet their clients’ needs. With facilities in the US and Viet Nam, LogiGear helps companies double their test coverage and improve software quality while reducing testing time and cutting costs.

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