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How to set up an Offshore Development Center (ODC) in Vietnam

In recent years, Vietnam has caught the attention of many multinational companies thanks to its booming economy and expanding opportunities. Among various options for entry into the promising market of Vietnam, building an Offshore Development Center (ODC) is certainly the way to go.

Offshore Development Center, also known as ODC, is an offshore team located abroad that provides software development services to the company. In other words, it is a subsidiary of a company operating in another country. ODC is a popular business model for different types of companies including startups and enterprises, and a rising type of partnership in Vietnam.

Why ODC for your business?

The reason why many businesses are opting for an offshore unit can be attributed to the many advantages that this model brings about. One of the key highlights is the fact that with an ODC, companies can limit the money, time, and effort that they would otherwise spend on infrastructure and recruitment. This means that such funds can be invested in other fields in the long run.

Manage and operate your ODC from overseas

Another explanation for the rise in popularity of ODC worldwide and in Vietnam, in particular, is COVID-19. The global pandemic has certainly created great obstacles for international organizations across the globe. As borders between nations are closed down and all cross-country flights are suspended, many onsite projects had to be put on halt. An ODC, however, would help to eliminate these geographical challenges since operation control can still maintain overseas.

So, how should you begin setting up an ODC in Vietnam? Here are CMC Global’s suggestions.

Know Your Market: Vietnam

Located next to China and at the heart of ASEAN, Vietnam is has attracted the attention of many investors in recent years. Its long coastline, direct access to the South China Sea, and proximity to the world’s main shipping routes give Vietnam the perfect conditions for trading.

In terms of Human Resources, Vietnam has a young, dynamic IT workforce with talented developers. The size of this IT workforce is increasing each year with a total enrollment of over 68,000 students from 250 universities and colleges with majors of IT, electronics, telecommunications, and information security, according to the 2017 Vietnam Information and Communication White Book.

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Hanoi, Hochiminh City, and Danang are the biggest tech hubs in Vietnam

When planning on doing business in Vietnam, you must equip yourself with thorough knowledge of Vietnam’s legal system. One of the Government’s priorities is to enhance the legal system, which will result in a more business-friendly regulatory environment. Consequently, in 2019, numerous laws came into effect, largely focusing on sectors such as IT, real estate, and agriculture. Among them, thorough knowledge of The Law on Investment (LOI), Intellectual Property (IP), alongside Business etiquette and culture.

Choose your ODC vendor in Vietnam

Without a doubt, Vietnam is currently home to a vibrant IT landscape with a variety of companies, from experienced enterprises to energetic startups. Before venturing into the work of establishing an Offshore Development Center, there are a few criteria that you should take into consideration in terms of ODC vendors.

• Professional Capabilities

Locating service providers with the skillsets and qualifications worthy of large investments is a great concern for foreign companies. In this case, for ICT companies providing ODC services, such certificates as RPA Automation Anywhere is a testament to their capabilities in carrying out hi-tech operations. Individual qualifications should also be noted as well. For example, in terms of Cloud Computing, many reliable companies are offering certificates of qualifications for engineers worldwide, including Amazon with AWS, Microsoft Azure, UiPath, Blue Prism, etc.

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Amazon’s AWS Certifications – a highly-regarded achievement among IT engineers

It is of great importance that your partner has been certified of their service and product qualities by trusted international organizations in their relevant field. Therefore, you should pay attention to these proofs of achievement.

• Business experience

A key indicator of the quality of the company is their work profile with past partners. Not only should you look into the case studies provided on their websites and news outlets, but it is also advisable to listen to past testimonials and reviews directly from their clients and partners to get a hands-on perspective. These are great insights into the company, its operating systems and business activities. Moreover, disclosing their past experience also means that the company in question is confident in its capabilities.

Look into past case studies, testimonials and reviews

Working with an experienced ODC company tends to be preferable because they are more acquainted with the technologies and procedures involved in ODC projects. They also tend to keep abreast of the latest tech trends and updates to provide their clients with cutting-edge solutions. Long-standing IT enterprises also enjoy a favorable reputation that can offer a two-way benefit for both the vendor and the partnering organization.

• Communication

Communication is key in any business operation, especially when working with an ODC company in a different country. To effectively run a smooth ODC, both parties should be able to speak at least one common language. This is to ensure that there are fewer chances of misunderstanding, leading to fewer human errors during work. In recent years, due to its widespread popularity, English has been chosen by many as the main communicative vehicle between different nationalities. Thus, places with a good English proficiency level such as the Philippines, India, and Vietnam, can save investors a great deal of burden.

• Others

Once you have got a provider in mind, the last step before coming to a deal with them to open an ODC in Vietnam is going over these remaining criteria, which include: Development strategies, HR procedures, Flexibility and Customization, Communication, and IP Protection.

Above is a comprehensive checklist for new companies venturing in Vietnam to take into consideration.

Set-up ODC in Vietnam with CMC Global

With more than 27 years of experience, with practical projects, CMC Global truly believes in our competence in setting up Offshore Centers for professional clients. Thus, we would like to offer our standard ODC process that has been proven with success to provide a practical overview when partnering with vendors.

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Our success-proven process of building an ODC in Vietnam

Our competence in ODC projects is reflected in the trust and partnership of many large companies in the world. Our clients throughout the years have included a South Korean multinational conglomerate and American Big Brand name in the field of Information Technology and Services. These companies not only recognized the superiority of the ODC model but also believed in the values that CMC Global can bring to the table.

In terms of qualifications, CMC Global has acquired 10 RPA Automation Anywhere certificates as a collective whereas many of our IT talents have also achieved many Cloud Computing certificates such as AWS, Microsoft Azure, etc.

CMC Global unites the top IT talents in Vietnam

These achievements are only a few among our tireless efforts to produce the highest product and service quality to bring the biggest competitive advantage to our partners. With the belief that your successes are our greatest achievements, CMC Global is committed to strive further and never cease to champion new heights.

To learn more about our ODC services and equip yourself with valuable insights of ODC in Vietnam, don’t hesitate to refer to our latest e-Book. In this booklet, we provide a comprehensive guide with 6 steps to win over Vietnam’s market with an offshore unit. From market analysis to step-by-step instruction, this eBook is the perfect companion for those looking forward to entering this burgeoning economy.

Download our e-Book here.