Building a Robust Tech Team in Vietnam: Strategies and Insights

Saigon Technology
11 min readMar 23, 2024

Introduction to Building a Tech Team in Vietnam: Key Strategies for Success

In an era where technology reigns supreme, the decision to build a tech team in Vietnam is more than just a strategic move — it’s a forward-thinking investment in a vibrant and rapidly growing tech ecosystem. This article serves as a comprehensive guide for companies and entrepreneurs looking to harness the innovative potential and technical prowess found in Vietnam.

As we explore the nuances of how to effectively build a tech team in Vietnam, we will uncover the critical factors that make this Southeast Asian country a goldmine for tech talent and a hub for technological innovation. From understanding the local tech landscape to integrating cultural insights, this introduction sets the stage for a deep dive into the practicalities and opportunities of assembling a top-tier tech team in Vietnam’s dynamic environment.

Analyzing the IT Services Market in Vietnam: Opportunities for Tech Team Building

The IT services market in Vietnam is not just growing; it’s thriving. With a projected revenue of US$1.76 billion in 2023, the landscape for those looking to build a tech team in Vietnam is ripe with opportunity. The dominance of IT outsourcing in Vietnam is expected to reach a market volume of US$0.59 billion in 2023, highlighting the country’s strong foothold in the global IT arena. This segment, particularly related to Vietnam software development and outsourcing to Vietnam, plays a pivotal role in the country’s burgeoning tech sector.

The market is not just expanding; it’s evolving at an impressive pace. A projected annual growth rate (CAGR) of 12.70% from 2023 to 2028 indicates a market volume of US$3.20 billion by 2028. These figures not only underscore the vitality of Vietnam’s IT services market but also its potential for sustainable growth. The average spend per employee in the IT services sector in Vietnam is estimated to be US$29.96 in 2023, a testament to the investment in human capital within this sector.

Globally, the United States leads in revenue generation in the IT services market, with an expected US$454.70 billion in 2023. However, Vietnam’s IT industry is witnessing significant growth, driven by emerging trends and technological advancements. This growth is not just about numbers; it’s about the strategic importance of building a tech team in Vietnam to leverage these expanding opportunities.

The impact of the COVID-19 pandemic has been a catalyst for digital adoption in various business activities, including remote work support, software solutions, and data security. The increasing reliance on IT services for business continuity and resilience underscores the market’s growth trajectory since 2021. With the ongoing digital transformation and automation of business processes, the global IT services market is anticipated to reach approximately US$1,771 billion by 2028.

Furthermore, cloud technology is becoming a cornerstone of digital transformation. The rising demand for cloud services and infrastructure upgrades is significantly boosting the need for managed IT services, especially in emerging markets like Vietnam. This trend presents a prime opportunity for companies aiming to build a tech team in Vietnam, as they can tap into a market that is not only growing but also adapting to the latest technological innovations.

Advantages of Building a Tech Team in Vietnam: A Gateway to Innovation and Cost Efficiency

The decision to build a tech team in Vietnam brings with it a myriad of advantages, positioning this vibrant nation as a burgeoning hub for technological innovation. In the bustling streets of Ho Chi Minh City and the intellectual centers of Hanoi, a silent but potent revolution in technology is taking shape. This metamorphosis is transforming Vietnam, once celebrated for its natural beauty, into a digital powerhouse brimming with opportunities for European SMEs and global enterprises alike.

  • Cost-Effective Development

A major advantage of outsourcing to Vietnam lies in cost of developers in Vietnam. Compared with traditional technology centers like the USA, UK, Netherlands, France, and Finland, development costs in Vietnam are significantly more affordable. This economic edge allows European SMEs to maintain high quality while achieving substantial savings. The cost of hiring a developer in Vietnam offers notable economic benefits compared to Western countries due to favorable cost-of-living and exchange rate differences. This factor is particularly advantageous for offshore software development.

  • A Pool of Highly Skilled Talent

Vietnam boasts a high literacy rate, 96.1% as of 2022, a testament to its strong educational foundation in science and technology. This has cultivated an inexhaustible reservoir of talent, particularly in IT development with an IT workforce of 530,000 engineers. Vietnamese developers are known for their proficiency in programming languages, sophisticated software architectures, and adapting to new digital trends. The solid base of scientific education in the country continuously fuels a pool of highly qualified professionals, which makes launching a software development company in Vietnam a good investment.

  • Fostering Innovation and Entrepreneurship

Vietnam’s culture of innovation and entrepreneurship is a critical factor driving its tech success. The country’s modern co-working spaces and thriving tech ecosystems foster a synergy of ideas, catalyzing a surge in dynamic startups and placing Vietnam on the global map of innovation. This vibrant atmosphere is ideal for companies looking to build a tech team in Vietnam, providing a rich environment for creativity and unconventional problem-solving.

  • Advanced Technological Infrastructure

Vietnam’s investment in communications and digital infrastructure has created an environment conducive to international collaboration and technological growth. High-speed internet connectivity and modern communication infrastructures facilitate remote collaboration and seamless technology operations, vital for any software development company in Vietnam.

  • Political Stability and Economic Growth

Vietnam enjoys political stability and sustained economic growth, bolstering investor confidence. This stability is reflected in the continued investment in the country, as noted by the Vietnamese Prime Minister in May 2023, emphasizing the government’s commitment to fostering a harmonious foreign investment climate.

  • Emerging Technological Expertise

Vietnam is increasingly becoming known for its capabilities in emerging technologies such as artificial intelligence, cybersecurity, blockchain, and IoT technologies. Government initiatives and training programs support the development of these advanced skills, ensuring that Vietnamese development engineers remain at the forefront of technology.

  • Government Support and International Trade Agreements

The Vietnamese government’s support for innovation, including tax benefits for technology companies and investments in education, plays a crucial role in the growth of the tech sector. Furthermore, Vietnam’s participation in favorable international trade agreements facilitates global trade and investment, particularly in technology.

In summary, to build a tech team in Vietnam means tapping into a landscape rich with highly qualified web developers, a growing technological ecosystem, and a business-friendly environment. These combined assets make Vietnam a promising player in the field of new technologies on the world stage, offering unparalleled advantages for companies looking to innovate and expand in the digital domain.

Key Considerations for Successful Tech Team Building in Vietnam

When embarking on the journey to build a tech team in Vietnam, there are several critical factors to consider to ensure the success and efficiency of your team. These factors are interconnected and have a significant impact on the overall performance and productivity of the team.

1. Understanding Business Needs and Requirements

The foundation of building a tech team lies in a clear comprehension of your business needs and requirements. This understanding helps in determining the appropriate size and structure of the team, as well as the specific skills and expertise required. Budget and timeframe are also crucial considerations, influencing the decision between setting up an independent team or opting for a software development company in Vietnam.

2. Deciding the Team Size

The size of the tech team should align with the project’s requirements. For smaller projects, a compact team of two to three developers may suffice, while larger, more complex projects may necessitate a bigger team. However, larger teams can bring challenges such as communication issues and conflict management. It’s vital to strike a balance between the number of IT talents and the project’s needs, ensuring efficiency and cost-effectiveness.

3. Expertise and Experience

The level of expertise and experience required will vary based on the project’s complexity and budget. Junior developers might be suitable for smaller projects, but senior developers or experts are recommended for larger and more intricate projects. The key is to balance expertise and budget to form a team that meets the project’s technical and financial constraints.

4. Aligning Culture and Business Model

Ensuring that the Vietnamese team aligns with your company’s culture and working style is crucial for smooth integration and operational efficiency. Vietnamese developers are known for their adaptability, so establishing a conducive working culture from the onset is important. Additionally, deciding between partnering with a software outsourcing company or establishing an offshore development center in Vietnam is a significant strategic choice.

5. Management and Leadership

Initiating the team-building process with management roles is essential. These individuals will oversee various aspects like hiring, training, and leading, ensuring the selection of team members who complement each other and foster a positive working environment. Effective management is pivotal in laying a strong foundation for your team in Vietnam.

6. Communication and Team Cohesion

Effective communication is a cornerstone for the success of an offshore development team. Establishing clear and efficient communication channels between team members and project managers is crucial to prevent misunderstandings and conflicts. Promoting teamwork enhances cohesion, leading to a more productive and effective team.

7. Budget and Cost Management

While the cost of hiring developers in Vietnam is generally more economical compared to other destinations, it’s vital to have a comprehensive understanding of all associated costs. A well-planned budget and strategy help in avoiding over-expenditure. In some cases, opting for a fixed-budget agreement with a software development service can be a more feasible solution.

8. Regulations or Policies

Innovation is a constant factor when it comes to the IT industry. A tech team needs to keep tabs on updated regulations and policies that may affect their operations. It’s also essential to see which regulations apply in the country where your tech team is situated to understand what you can and can’t do.

In summary, to build a tech team in Vietnam successfully, it’s imperative to consider these multifaceted aspects. From aligning business needs to managing costs effectively, each factor plays a critical role in establishing a proficient and cohesive tech team that can navigate the complexities of software development while contributing to your business objectives.

Detailed Insights into Each Model for Building a Tech Team in Vietnam

Expanding the understanding of each business model helps in making an informed decision when you plan to build a tech team in Vietnam.

Setting up an ODC is a strategic move for businesses focusing on long-term or complex projects. It functions as a specialized extension of the client’s business, with dedicated resources and personnel. This model allows for a high degree of involvement and control over the development process, making it suitable for projects requiring continuous oversight and deep integration with the client’s operations. The ODC model fosters a close-knit working relationship between the offshore team and the client, ensuring alignment with the project’s goals and a deep understanding of the client’s business needs.

In this model, a team of specialists works exclusively on a client’s project, ensuring a high level of focus and commitment. This dedicated approach means the team can seamlessly integrate with the client’s internal processes and culture, fostering a synergistic working relationship. It’s particularly effective for long-term projects where consistency and ongoing collaboration are crucial. The client benefits from having a team that is attuned to their specific needs and goals, leading to enhanced productivity and project outcomes.

Team Augmentation addresses specific skill gaps or resource needs within a client’s existing team. By bringing in specialized expertise, it enhances the overall skill set and capacity of the in-house team. This model is particularly beneficial for projects requiring additional resources or specific expertise that the internal team may lack. It offers the flexibility to scale the team up or down as per project demands, allowing for efficient resource management and optimal project execution.

The BOT model is a strategic choice for clients looking to gradually establish a presence in Vietnam. Initially, the offshore center manages everything from infrastructure to staffing, reducing the initial investment and operational burden on the client. Over time, the client takes over the fully operational center, providing a smooth transition to in-house management. This model is ideal for clients who wish to establish a long-term, sustainable operation in Vietnam but prefer a phased approach to investment and operational control.

  • Fixed Price Team

Opting for a Fixed Price team provides clarity and certainty, with all project deliverables, timelines, and costs agreed upon upfront. This model is best suited for projects with well-defined scopes and deliverables, where changes are unlikely or minimal. Clients favor this model for its budget control and reduced financial risk, as the cost remains constant regardless of the project’s progression. It’s a straightforward approach that offers peace of mind for clients who value financial predictability and project simplicity.

  • Time & Material Contracts

This model is characterized by its fluidity, ideal for projects where requirements might change or evolve. The flexibility it offers is unparalleled, with clients having the ability to adjust the scope and direction as the project progresses. This adaptability makes it a perfect fit for projects where innovation and iterative development are key. Clients appreciate the transparency in billing, as they are charged based on the actual amount of work done, allowing for effective budget management in line with project developments.

  • Project-Based Model

The Project-Based model is streamlined and focused, with a dedicated team managing a single project from start to finish. It provides clarity and structure, with a defined scope, timeline, and budget. This model is particularly effective for projects where the requirements are clear, and the deliverables are fixed, allowing for a focused and efficient development process. Clients benefit from a hands-off approach, as the project team handles all aspects of development, providing regular updates and delivering the final product as per the agreed-upon parameters.

Each of these models offers distinct advantages and can be chosen based on the specific needs and objectives of your project when you build a tech team in Vietnam. The selection should align with the project’s complexity, scope, and strategic goals to ensure successful implementation and desired outcomes.

Final Thoughts on Building a Tech Team in Vietnam

In conclusion, the decision to build a tech team in Vietnam presents a multitude of opportunities for businesses looking to leverage the burgeoning tech landscape of this dynamic country. The variety of models available for team building — from Time and Material Contracts to Dedicated Development Teams, and from Fixed Price arrangements to the BOT model — offer flexibility and strategic alignment for various project needs and business goals.

Vietnam’s tech scene, characterized by a highly skilled workforce, competitive costs, and a supportive business environment, makes it an attractive destination for tech team development. Whether you’re looking to augment your existing team with specialized skills, establish a long-term offshore software development in Vietnam, or engage in a project-based collaboration, Vietnam offers a rich pool of talent and resources to meet these needs.

The key to success in this endeavor is to carefully consider the unique requirements of your project, the specific advantages of each team model, and how they align with your organizational goals. By doing so, companies can effectively build a tech team in Vietnam that not only meets their current project requirements but also positions them for future growth and innovation in the global technology landscape.

Embark on Your Tech Journey with Saigon Technology: Build Your Dream Team in Vietnam Today

If you’re ready to take the next step in harnessing the potential of Vietnam’s vibrant tech scene, Saigon Technology is here to guide you. With our deep expertise and proven track record in building successful tech teams, we can help you navigate the complexities and tailor a solution that fits your unique needs. Don’t miss the opportunity to transform your tech capabilities.
Contact us today to start building your ideal tech team in Vietnam. Let’s embark on this journey towards innovation and success together.

Source: https://saigontechnology.com/blog/build-a-tech-team-in-vietnam

--

--