Why we chose Vietnam for our offshore development centre

by
Rich Cleeve

When we started out in Codestream we attempted to hire locally in Singapore but with the likes of Grab and their billion dollar budgets, it made it very difficult to compete for the best talent, so we looked offshore. Initially we went outside South East Asia where the price was very reasonable. However we ran into issues that we found difficult to control including software quality, cultural differences and transparency. We took the difficult and painful decision to look closer to our home in Singapore. What followed was a review into the software development capability of the majority of countries in SE Asia, where we based our criteria around work ethic, culture and the software development ecosystem.

Vietnam stood out a long way ahead on all 3 criteria. There is a full range of offshore development centres ranging from companies that have been in place for over 20 years with 2,000 plus staff, to smaller upcoming developers and specialists focusing on niche technologies.


So what has come out of Vietnam?

Vietnam’s biggest software export is the product that most software developers and people in the tech industry know and love - Jira from Atlassian. It’s the market leader in software project management tools, scalable to fit the biggest software projects with a complexity to match.


A close second, created by Rocket Internet on the ecommerce front, is Lazada with over $2.5 billion USD of investment. It is the Amazon of SE Asia and their development centre is based in Ho Chi Minh City.


There are also successful apps launched into the local market, such as the ubiquitous Zalo social media app. Zalo is the Vietnamese equivalent of WhatsApp and everyone there uses it.


It’s not just tech; it’s where a lot of high end outdoor brands choose to base their manufacturing including Arcteryx, Patagonia and Osprey.

Culture & work ethic

We’ve had a warm and friendly experience working in Vietnam, with a merciless sense of humour between members of the development team, but underlying it, is a steely resolve to get things done and move forward at a brisk pace.


There is a strong sense of work life balance and of looking after ones' health. This fits very well with our own values for long term sustainable productivity on projects without burnout. We have found we can maintain that balance, but whenever there are issues the people we work with have put in heroic efforts without any prompting to get things resolved.


When we first visited a number of potential partners over there, it came as a surprise to see the lights off and people asleep at their desks over lunch. We subsequently learned is that it’s an incredibly efficient way to quickly recover afternoon energy after a lunchtime meal, and indeed whenever I am now over there I adopt the practice. Culture meets productivity improvements!


As someone who has been running software projects for over 20 years, it is frustrating experience when deadlines come and go without explanation. Culturally, there isn’t the need to say yes to everything, so there’s not too many surprises near delivery dates due technical struggles.


With our team in Vietnam, if they are doing something they haven’t done before or working with a new technology, they build time into the estimate to account for the learning curve and issues that might crop up. This really helps to maintain a predictable pipeline and allows us to set the right expectations with our clients.


Most technical staff are happy to work for foreign companies like ourselves as they can attract 1.5 times they would receive working on local projects. It also gives them a chance to improve their English which in turn increases their market value.


The Ecosystem

The tech industry has reached revenues of nearly US$70 billion creating over 750,000 jobs. The majority of this is in electronic component manufacturing, with Samsung, LG and Intel all establishing manufacturing bases there.


Compared with 20 years ago, Vietnam is a lot healthier and more educated as evidenced in high scores in the Program for International Student Assessment where the performance exceeds many OECD countries and the human capital index is the 2nd highest in ASEAN countries just behind Singapore.


There are 55 universities in Vietnam providing technical degree subjects and a steady flow of talented graduates that come through onto training schemes to get hands on experience of working on real-world projects.


What to look out for

The first thing is that spoken English is not generally at the same level as what you would find in India or the Philippines, so fluent English speaking developers come at a premium. We approach it by ensuring at least one person in any team is fluent, without requiring that the whole team is. That way we don’t miss out on technically gifted engineers who would otherwise be overlooked. It generally pays off with whatever team you run with but we put a lot of emphasis on visual communication with sketches, wireframes and process flows.


With high levels of demand and investment into the region, staff have a lot of choice of who to go and work for. Staff retention becomes important, and of course the usual policies of training, career progression and so on apply. What also makes a big difference is to ensure projects are well run with clear requirements, realistic expectations, and without micro-management.


UX Design is still best done onshore where the app will be used in order to really understand the goals and personas that will use the app. This is vital to achieve a highly functional product.


Conclusion

We have found Vietnam a great place for our development needs, and after 3 years of working there have fine tuned our processes to get the most out of the development team and enjoy a great working relationship with them. It’s very close to Singapore, we can be on a flight at 7am in the morning and be in the office over there before 9am, making it painless for regular in person contact.


Offshoring is primarily about price, and when you look at the day rates, Vietnam is not the cheapest place to go for software development. Factor in adjusted management time, hitting release dates, and engineering competence however, and then it becomes excellent value for money.


And of course there is always my favourite thing to eat - the banh xeo...

Sources

https://www.worldbank.org

http://www.vinasa.org.vn

http://ven.vn

http://www.oecd.org