CHECKLIST FOR SELECTING VIETNAM SOFTWARE OUTSOURCING VENDOR We have compiled a list of key steps and a checklist of the key considerations you may wish to take into account when examining Vietnam as a potential outsourcing destination and selecting a Vietnam software outsourcing vendor.
Checklist A. Country and City Evaluation B. Vendor Evaluation Key steps to go offshore
CHECKLIST A. COUNTRY AND CITY EVALUATION (Top 3 Vietnam cities: Ho Chi Minh City, Hanoi, Da Nang)
Political Stability
Any political conflict in the last 10 years Religious, ethnic disputes Economic growth and stability
Natural Disasters
Earthquake, flood, typhoon, hurricane, tsunami
Technology Capability
Software park, high tech park
Infrastructure
Internet connectivity
Number of multi-national high tech companies
Electricity up-time Transportation
Human Resources
Number of IT graduates Availability of resources Supply versus demand
Language skill
English, Japanese, etc.
Pricing
Average salary of IT engineers at different levels: junior, senior, technical lead, project manager
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Living Condition for Expat
Your friends’ feedback Tourism preference Multi-national companies’ reports, e.g. HSBC
Others
Tax incentives Time zone
B. VENDOR EVALUATION Track record
Company profile and reputation Number of years in software outsourcing business Case studies that are relevant to your needs
Customer list
Number of active clients Number of active clients that are large companies Number of clients similar to your company
Service offerings
List of available vendor services and experience in each service Compare to your short and long term needs
Infrastructure
Ability to expand Electricity up-time, power generator Internet connectivity, VPN Network and communication Backup system
Global presence
Overseas offices Any offices in your country
Human Resources
Number of engineers Ability to attract talent Recruitment process and criteria Staff motivation and incentives
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Human Resources
Attrition rate
Technical skill
Skills coverage
Training system
Experience in large and complex projects Innovation, R&D capability
Quality process
Engineering process maturity Certification Project management tools Metrics Reporting Visibility of offshore team activities Escalation procedure
Language skill
Language proficiency (written and verbal) Language training
Relevant experience
Domain expertise: finance, e-commerce, healthcare, education, etc. Technical skills: C++, Java, C#, PHP, mobility, cloud, testing, big data and analytics, etc.
Ramp up capability
Resource pool
IP Protection and Security
Physical security
Ramp up time
Network security Data security Internal procedure Business continuity
Pricing
Pricing models Blended rate Rate increase
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Pricing
Non-labor costs Overall cost Payment term
Culture
Professionalism Commitment Flexibility Open & friendly Integrity Proactive Innovative
Key Strengths
Value propositions Key expertise Differentiation from other vendors
Key Weaknesses
Limitations What the vendor cannot provide
Sustainability
Financial stability Business continuity plan, disaster recovery plan Dependency on a single customer, domain or market
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KEY STEPS TO GO OFFSHORE STEP 1 Define your objectives & goals Based on your business strategy and goals: cost saving, scalability, time-to-market, competencies, vendor diversification, etc. How will you align an outsourcing model with your business strategy? What services do you expect a vendor to provide? What will be outsourced and what will be kept in-house?
Outsourcing objectives Outsourcing vendor criteria
Timeframe: when will you start the first outsourcing project?
STEP 2 Prepare RFI/RFP RFI: questions and information you need for evaluating a vendor (based on your criteria) RFP: request a specific proposal for your needs and project
RFI RFP
STEP 3 Vendor list
Collect potential vendors based on: Recommendations from your network Google search
The list of potential vendors
Industry awards and rankings
Created by TMA Solutions (www.tmasolutions.com)
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STEP 4 Due diligence Send RFI/RFP to all vendors Based on RFI/RFP responses, rank the respondents to create a vendor short list (shouldn’t select more than 3 vendors and 2 cities)
Vendor 1st evaluation
Site visit to the short-listed vendors (optional but recommended)
STEP 5 Test project (optional) Pilot project with one or several short listed vendors
Project results (delivery, communication, dealing with issues)
STEP 6 Evaluate and select a vendor Based on the results of due diligence and test project Negotiate a master agreement as the framework for the engagement Plan for the ďŹ rst project: scope, performance measures, team size, team members
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Master agreement with the selected vendor Kick off 1st project
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