CMG Vietnam

Hanoi was in the spotlight hosting the Asia-Pacific Economic Cooperation summit, which drew leaders from 21 countries and thousands of business executives from around the world.

CMG UK paid a visit to their sister company, to expand and train the team on best practices for projects with Sun, Vodafone and BP.

With the recent changes in the law since joining the World Trade Organisation (WTO), CMG UK and Australia have been able to become 100% foreign owners of their Vietnam CMG subsidiary.

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Evaluation of Vietnam as an outsourcing destination

Cost: Labour costs in Vietnam compare very favourably to other potential outsourcing destinations. For example, Vietnam's salaries are over 30% cheaper for both IT outsourcing (ITO) and business process outsourcing (BPO) than India. Other Asian countries are even more expensive for ITO and BPO, and Eastern European countries are even more expensive again (source: neoIT as reported in Global Services, August 2006). Vietnam's labour costs are also 90% cheaper than labour costs in the United States.

Workforce Suitability: Vietnam has a well educated and technically savvy population. 96% of Vietnam's population is literate. In addition, 80% of the graduates from Vietnamese colleges and universities graduate with science degrees making Vietnam a particularly good destination for technology outsourcing.

Stability: From a political standpoint, Vietnam has enjoyed over thirty years of political stability. The current government has been in place since the reunification of Vietnam in 1975. Vietnam has also not experienced any major conflicts or tensions with its neighbours in almost thirty years (since 1978).

Examples of Companies in Vietnam

CMG Corporation: CMG is part of a multinational company. It is a fast growing software development company specialising in bespoke software. Main clients include many of the worlds international Blue Chip firms. In recent years they have helped many of their clients migrate their software development to Vietnam whilst keeping a core team in the originating company. The benefit of this is to allow the core team to liaise directly with the client thus removing any language or technical obstacles.

Intel Corporation: Announced plans to build a $500 million chip assembly and testing factory in Vietnam's Ho Chi Minh City.

BP Vietnam: Has 3 offices with over 750 local employees. BP was one of the major sponsors of the recent APEC conference. As a recent member of the WTO Vietnam is now duty bound by WTO rules and regulations and the EULA agreements from the United States of America.

Vietnam has now received security clearance to use the same level technology as the UK with the USA.

Conclusion - Vietnam scorecard

When looking at how Vietnam "stacks up", it becomes clear that Vietnam is an offshore outsourcing destination that is worthy of strong consideration.

Metric	Grade
Cost	Lower than most other outsourcing destinations
Workforce	96% literacy rate Heavy emphasis on science degrees Vietnamese businesses experience less than 5% turnover (churn) for IT-related positions (compared to India where churn is over 10%).
Stability	Political: 30+ years of the same government Almost 30 years of no conflict with neighbouring countries Economic: Strong GDP growth Strong foreign investment Ethnic and Religious Conflict Non existent
Government Policies	Pro-business Good and constantly improving intellectual property protections and enforcement
Facility with English	Vietnamese language uses roman alphabets and characters English is the most popular second language in Vietnam Most graduates from Vietnamese colleges and universities are fluent in English

BP Sponsor APEC

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