Mohan Naidu, FPT UK Managing Director, tells us how Vietnam is quickly becoming a hub of technology expertise. He says: “The digitally-enabled future for Vietnam is just beginning – and it is looking very bright.”
To function optimally, enterprises need access to a wide portfolio of options for IT and operations talent. Enterprise leaders are looking at all business and talent models to get what they need, especially where emerging technologies are concerned.
Vietnam thoroughly embraced this shift and emerged stronger in the pandemic economy by virtue of its ambition, vision and willingness to pivot quickly.
Vietnam has made rapid strides in the last few decades to embrace emerging technology and cultivate a smart, able and future-ready workforce. Now the challenge is to get word of Asia Pacific’s best-kept secret out to global enterprises.
Software outsourcing is set to explode in Vietnam as its standing grows as an IT development destination. In recent years Vietnam’s IT industries have been moving up the value chain and offering more value-added work. Vietnam, a nation that at first might not come to mind as a global software exporter, but just like South East Asia in general, is behind some of the world’s leading providers.
Founded in 1999, FTP Software is part of the FPT Corporation and has built its services from the ground up over the last two decades and is today a global technology and IT services provider with more than US$513 million in revenue and 20,000 employees in 26 countries, including Vietnam, Japan, Myanmar, Indonesia, India, Singapore, Germany, the UK and the USA. Its parent company, FPT Corporation, reports revenues of nearly $1.3 billion with a workforce of 30,000.
The Hanoi-based corporation’s software business arm has served 700 plus customers worldwide, a hundred of which are Fortune Global 500 companies in the industries of automotive, banking and finance, logistics and transportation, utilities and more. Its growing reputation recently merited inclusion in Gartner’s 2020 Market Guide for Public Cloud Managed and Professional Services Providers (MSPs) Asia/Pacific.
Intercontinental expansion
FPT Software is investing in its intercontinental expansion, with Europe targeted as a first port for capital commitment in the value of $100 million that includes organic and inorganic growth over the next three years.
The software company established itself in the EU market and in the UK with its first global client more than 20 years ago. European growth was steady but its focus and trajectory took it into Japan and the US, where it now employs thousands of local and international experts and engineers, reaching revenues of hundreds of millions in USD annually.
The focus has now returned to the UK and Europe, where there is a high demand for Digital Transformation and innovation projects.
Providing the bridge between Europe and Asia
While many new ideas may come from the EU, Asia provides an ideal testing ground to trial concepts. Regulation is more flexible with the freedom to explore solutions; people are open to new ideas and ways of thinking.
As a software business, FPT has not only assisted its customers with technical implementations but also helped them bring innovative ideas to life. Asian firms have found they can act as the bridge between Europe and Asia in many digital initiatives.
One of the challenges facing the UK and Europe is a dearth of resources in emerging technologies. A digital talent shortage has forced service providers to step in to plug up some of the gaps while in-house teams are being hastily expanded to cope with the workloads.
Companies that have previously relied on their offshore delivery centers or captives are now trailing behind with many of their Digital Transformation projects.
Endemic across all industries the fallout has meant some are reconsidering their service delivery location strategies (part of Business Continuity and disaster-mitigation planning) to rebalance some of the risks.
The answers may lie in building a dedicated delivery team or a captive delivery center (under your ownership) in a collaborative partnership. Not only could the risks be mitigated with a more cost-effective model and a highly-skilled talent pool but there is also a shared responsibility for business operations and continuity.
This approach returns the bandwidth that companies may have lost during COVID, giving businesses the freedom to refocus on their core activities such as the development of products and strategy.
Could AI and the next IT services powerhouse come out of Vietnam?
Vietnam is a rising digital nation. With 70% of the population under 35, Vietnam is seen by many big international companies as a new opportunity to be the next key service delivery location and/or captive centers. Its digital economy is the second-fastest-growing market in Southeast Asia, according to a recent report by Google, Temasek and the US-based global management consultancy Bain.
The challenge it faces is a need to grow the digital workforce by an additional 190,000 IT engineers by the end of 2021.
The government has also shown its commitment to reinventing the country. The National Program for Digital Transformation, aims to grow the digital economy to 30% of GDP, deploy universal fiber and 5G, build 100,000 digital businesses and employ 1.5 million people in the digital workforce by 2030.
Vietnam is listed in the top five most attractive destinations for IT outsourcing (according to AT Kearney, 2019) while Gartner considers Vietnam as the Tier 1 Emerging Offshore Outsourcing location in APAC. Vietnam also ranks number nine in Top 10 Digital Nation (According to Tholons).
Vietnam tackled this digital fluency challenge head on. A foundation of the attractive talent market in Vietnam is its robust, digitally oriented education system. Currently, Vietnam has 236 universities, 149 of which are training IT professionals, delivering more than 50,000 IT engineers to the workforce annually.
This lands Vietnam on the list of the top 10 nations in the world for the highest number of IT students. FPT already established an AI center in Quy Nhon City, and it partnered with the world’s leading AI research institute, Mila, making FPT the first Southeast Asian corporation to be a strategic Mila affiliate. With these moves, FPT aims to turn Quy Nhon into Vietnam’s AI valley.
Vietnam continues to promote business reform and cultivate digitally fluent talent; it is poised as a rising star in the global services market. The country is full of young, talented people and a culture that promotes innovation, and it is quickly becoming a hub of technology expertise.
While the barriers continue to be Western perceptions and lack of mindshare among global executives, today’s executives seek multiple levers to pull to find ample talent. Vietnam is building on a solid foundation to be a viable option for enterprises to leverage for years to come. The digitally-enabled future for Vietnam is just beginning – and it is looking very bright.
FPT brings Vietnam Digital Transformation services to Europe
FPT has demonstrated it has an unswerving focus on technology that accelerates the process of Digital Transformation. Over the last few years, it has concentrated on the core technologies that are driving transformation such as AI, Big Data, Blockchain, RPA and IoT.
It is also on track to build a comprehensive ecosystem of world-class software to transform businesses all around the world. In Europe, it currently works with RWE, E.ON, Allianz, Siemens, Schaeffler, Airbus on its Digital Transformation program and projects requiring emerging technology capabilities (Data Platform, IoT, cloud and automation).
