Offshoring refers to the practice of managing, registering, and operating business activities in a foreign country—typically one that offers advantages in terms of financial incentives, legal frameworks, and taxation.

Strong technical skills and modern technology infrastructure are among the key factors that make Vietnam an increasingly attractive offshore destination for international companies. CIO.com interviewed Anna Frazzetto, Vice President of Harvey Nash, a firm with over a decade of outsourcing experience in Vietnam, to better understand this trend.

1. Vietnam was once a small player in the global IT services market. What has driven increased interest in recent years?

The turning point came when Vietnam joined the World Trade Organization (WTO). This membership became a major catalyst for the country’s growing role in global outsourcing. While there were initial concerns about how Western companies would operate in this environment, in reality, those concerns did not materialize.

Vietnamese professionals are eager to collaborate internationally, as they clearly understand the value of foreign investment and capital inflows to the country’s development.

2. You have outsourced to Vietnam for over a decade. What has changed?

Harvey Nash has been present in Vietnam for 16 years, and the transformation has been remarkable. When I first joined the company 11 years ago, mentioning outsourcing to Vietnam often triggered skeptical reactions. Today, outsourcing to Vietnam is widely accepted and considered a natural choice.

Vietnam’s overall national development, WTO membership, and strong willingness to collaborate with Western markets have all played critical roles. Additionally, government flexibility—allowing companies like Harvey Nash to work directly with universities to design training programs—has been a major advantage.

Other countries such as Thailand and Cambodia are now also seeking outsourcing opportunities, but Vietnam remains highly competitive.

3. Gartner ranked Vietnam among the top five outsourcing destinations alongside India, China, the Philippines, and Malaysia. How does Vietnam compare?

China and especially India have been global outsourcing powerhouses for the past two decades and have already experienced every phase of software outsourcing. Their current challenge lies in employee retention, as many professionals migrate abroad in search of better career opportunities.

This is far less of an issue in Vietnam. Vietnamese culture places strong emphasis on family and community. Many professionals prefer to stay in their home country, work locally, and support their families—creating a significant advantage for long-term outsourcing stability.

Vietnam also excels in education, particularly in mathematics and science. Universities in Hanoi and Ho Chi Minh City produce outstanding talent, including winners of international mathematics Olympiads—some of whom proudly work with us at Harvey Nash.

4. What is the technology and business environment like in Vietnam?

While countries like the United States invested heavily in traditional infrastructure such as fiber optics and physical networks, Vietnam has largely leapfrogged these stages by focusing on mobile and wireless technologies.

Vietnam’s strong mobile technology capabilities provide a clear advantage for companies looking to outsource operations offshore.

5. What is the biggest challenge of IT outsourcing in Vietnam?

As mentioned earlier, language can be a challenge—but it is far from insurmountable. At Harvey Nash, we employ technical professionals who act as communication bridges. These individuals are trained as developers, analysts, and architects—not as customer service or accounting staff.

Another effective approach is ensuring that each team includes at least a few members who are fluent in English. Importantly, language challenges mainly affect spoken communication and rarely impact written documentation, as English is widely used as a second official language in Vietnam.

6. What advice would you give to companies considering outsourcing to Vietnam?

Vietnam is unique due to its low employee turnover rate. Companies should be culturally sensitive and help outsourced teams feel like a natural extension of the organization.

When onboarding new team members, patience is essential. Giving people time to adapt and feel comfortable in their working environment plays a critical role in building long-term, successful outsourcing relationships.

Source: ICTnews via CIO.com