Vietnam, the emerging software outsourcing destination

Offshore development includes software, web design, website, application testing and more. Outsourcing software development is the driving economic force of many emerging countries. India and China are well recognized as the industry leaders for outsourcing software development. Despite their huge market share in offshore development, Vietnam is quickly emerging as a software outsourcing destination. It is gaining recognition as a low cost quality software maker in Asia. CIO magazine suggests that outsourcing to Vietnam is about 90% cheaper than developing software in the United States of America. Compared to India, developing software in Vietnam costs between one third and one seventh times cheaper. These are very convincing figures for companies to start venturing their offshore development to Vietnam.

Research Vietnam is an outsourcing intermediary claiming that outsourcing software development costs 50% less than the rivals from India. On top of it, Anderson Vietnam estimates that outsourcing per person in Vietnam is only $20,000 per person compared to $40,000 per person in India. These figures are convincing enough to place Vietnam as the top future contender for offshore development projects. As Indian companies enter the maturing cycle, the cost differential between India and Vietnam will increase even further. The outsourcing costs in India are most likely to increase in the coming years. Outsourcing to Vietnam makes a lot of sense for companies looking to make the most cost effective development. Vietnam ranks 20th among the top nations recognized as an excellent outsourcing destinations.

Vietnam has a population of over 90 million people and over 60% of the population is under 30 years of age. The young generation of skilled workers is highly motivated and technologically advanced. This dynamic generation provides a great pool of skilled workers required to meet the growing demand of offshore development. Each year more than 25,000 technical engineers graduate from the universities. Young Vietnamese with better education have already overcome the English language barrier that was believed as a weakness earlier. These are few of the reasons that make Vietnamese one of the best communities that’s globally competitive and technically advanced.

With a robust economy, that has an unbelievable growth rate; Vietnam is considered to be a dynamic nation with great outsourcing potential. With a stable and secure government, it is now considered as a legitimate nation under one roof. In an international survey taken in 2002, Vietnam was the safest country to travel in Asia. Government of Vietnam is promoting its economy for more foreign investment. It offers great incentives in the IT industry in order to capitalize on globalization.

Companies have started to capitalize this great opportunity of outsourcing to Vietnam with low cost and exceptional quality. Vietnam is on its way to write a new chapter in the history of outsourcing software development. The world will be watching this new revolution in offshore development happening in Vietnam. As an emerging software outsourcing destination, Vietnam will be a perfect fit for companies looking for a technological advance without having to spend a lot of money.


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All About the Processes Involved in Software Development

Software Development is a conversion in which the user’s requirement or the market demand is processed into a software product. This comprises the procedures of software engineering associated with investigation and attaining objectives. It is arduous to segregate whether marketing or engineering is accountable for the accomplishment or catastrophe of a software product. Software developments are based on the demands of the customer and are done to the utmost satisfaction of the customer or market. They are codes written in various computer languages.

Customer Software Development is an engineering process and marketing it is another process. But only when these two processes join forces the outcome will be balanced. Software development assignments are not always allied with engineering such as risk or crisis management, human resources, budgeting, market research, etc. Software development is a complicated process and requires the blend of knowledge in various disciplines. Beginning from designing to generation of codes, project management, analysis, deployment, management changes and projecting the required software has become an indispensable part of any organization.

Any developing Software Development Company executes their methodologies. The ISO 12207 software is essential for selecting, implementing as well as monitoring the life cycle. Software ISO 9000 represents the standards for organizing procedures with documentation. ISO 15504 known as SPICE assists in managing, providing guidelines, controlling and in software development. This is implemented to acquire knowledge about the project on which a team is doing software development. Six Sigma is a method to analyze the statistics of a company and enhance its performance.

Generally, while attempting any new Software Development or free software, new application or absolute new system, it is referred as “Domain Analysis”. This is an essential phase to haul out and gather the requisites of the Customer. The next step is creating the Customer Software Development project by understanding the client’s requirement and demonstrating to them the live codes. This demonstration will lessen the risk of being incorrect. Specifications are essential for all the external interfaces that are expected to remain constant. The Software Development Company takes the responsibility of linking the hardware perfectly under the supervision of IT Consulting Companies. Implementation should be done by coding which is a vital activity for the Software Development engineers and the Software Development Company. This is followed by testing the software. Documentation is essential for maintenance and future development and is taken care by the IT Consulting Companies or by the Software Development Company.

Many IT Consulting Companies supports other Software Development Companies to take optimum utilization of the hardware as well as the software tools to produce best results. Software Development fails as the developers lack in planning an appropriate team and the time required in completing a project. It is expected of the Software Development Companies to have curiosity and adequate queries as well as problems. This will lead to inquisitiveness and more of adept learning. Maintaining and developing software to any new problem or additional requirement consumes more time than initial software development. Any custom software development demands lots of patience, calculation, speculation, variation and presentation. It should be developed keeping into mind various problems that may arise in future and should be open enough to make alterations.

By Anne Catherine/articlesbase.com


As a Vietnam software outsourcing company, we offer software application outsourcing service, offshore software outsourcing, international outsourcing solutions company

Software Product Development Outsourcing - Testing & Quality Assurance

If you are company providing software product development then you must be aware of the importance of software testing and software quality assurance. Testing is something which plays a vital role in any software product development as it lets you know where your software development is heading.

According to the experts, software testing service is the process used to spot the accuracy, comprehensiveness, security, and eminence of developed computer software product. This is a core process which is also known as technical investigation and is professionally performed on behalf of stakeholders. The main aim of any testing is to expose all the quality-related information about the developed software product. This is done with respect to the context in which it is intended to operate.

Thus, it shows that this work is best suited for the professionals in this field as software testing involves various complex processes to expose the product to all possible and applicable situations ensuring its functionalities. Therefore if you are going for software product development then simply choose the best one. Softage is one such company which provides software product development along with the rigorous testing rounds. Softage's testing not only includes the procedure of executing a program or even an application with the intent of finding errors but also assuring the quality.

In any software product development testing quality is the core issue however, it is also said that, testing can never entirely establish the accuracy of capricious computer software. But according to few IT experts, testing that compares the state and behavior of the software product against various specifications.

That's why it is said while going for any software product development; software testing should be distinguished as a separate discipline of software quality assurance. This not only includes testing but all the quality driven areas. Whenever anyone goes for software product development its main concern is the approach taken towards software testing.

Software testing should be rigorous and effective as it is not only a matter of creating and following custom procedure. In fact it is most intellectual processes which play a very vital role in software product development.

Source ezinearticles.com

Vietnamese software outsourcing and applications development company

Offshore software development market

Background

“Offshoring”, or “offshore outsourcing”, generally means moving the physical location of information technology (IT) services delivery from a developed nation with high wage rates to a developing country with lower wage rates.

The offshoring of IT services began in the mid-1990s when companies outsourced their Y2K and euro conversion initiatives. The IT labor market in the developed countries was very tight at that time and offshoring was often their only option. The work performed proved to be very successful. India, in particular, has become well known for its high-quality application development and maintenance work. “Y2K legitimized the offshore marketplace and gave the Indian providers traction,” according to Rita Terdiman, vice president of Industry Services at Gartner. [1]

Since the beginning of the global economic downturn in 2000, offshore outsourcing has become one of the major sources of IT cost savings. Although legacy application development and maintenance projects still represent the majority of work moved offshore, companies are increasingly relying on offshore suppliers for custom application development, call center, and business process outsourcing services as well.

Market Size

In 2000, the annual total global IT services market was estimated to be roughly $400 billion. North American companies spent approximately $114 billion on in-house software development, contracting, and purchases. [2] The global offshore IT services market is valued at between $9 billion and $10 billion annually, and therefore, represents about 2 to 2.5 percent of the global IT services total.

The United States, which accounts for about 45 percent of worldwide IT services spending, is the largest customer of offshore software services. U.S. companies accounted for roughly 60 to 65 percent of the total, European companies account for about 25 percent, and companies in the Asia Pacific region account for 10 to 15 percent. [3]

According to a recent report published by IDC, a Framingham, MA-based market research firm, offshore outsourcing is the dominant trend in the IT services industry. IDC states that 42 percent of the application management contracts have some offshore component and that the main reason for moving offshore has been lower cost. [4] Incoda, believes that the demand for offshore outsourcing of IT and IT-enabled services will continue to increase due to continued cost pressures, the anticipated global economic recovery, and to the trend of globalization of services.

Type of Service Offerings

The offshore outsourcing market has evolved over the last decade. In the mid and late 1990s, it was used almost exclusively for delivering highly commoditized, technical staff augmentation. Today, companies are relying on offshore software developers for a much broader range of IT services. The service offerings of offshore suppliers cover the entire spectrum of IT activity—from support and maintenance of legacy applications to complex custom applications and a variety of other higher value IT and IT-enabled services. Gartner Group places the types of offshore service offerings into three categories, based on the suppliers’ level of experience with those service offerings. [5]

- Most mature: application maintenance and management, application migration, and legacy application development.

- Medium maturity: new custom application development, enterprise application integration, implementation of application packages (e.g., ERP, CRM, SCM), and business integration.

- Least mature: call centers, business process outsourcing (BPO), infrastructure outsourcing, ERP services, remote network management, product engineering, embedded software, and technical services.

The two fastest growing segments of the offshore services market are application management and business process outsourcing (BPO). BPO is capturing the attention of many executives as a way to reduce the costs of business processes such as customer care, billing, collections, claims processing, and various other back office functions. Gartner points out that call center and transaction processing markets are more mature than the outsourcing of more complex, back-office processes.

Offshore providers will strive to create or extend differentiated capabilities and continue to expand their services portfolio offerings to include higher value add project-based services. Given the growing level of competition in the services outsourcing market, companies that don’t have unique capabilities will be subject to downward pressure on billing rates.

Customers

Large multinational enterprises have been the largest users of offshore software services suppliers. In 1999, more than 185 of the Fortune 500 companies outsourced at least part of their software needs to India [6]. Today, the majority of the Fortune 500 use offshore development services through third-party suppliers or have wholly-owned development centers established offshore. Some well-known companies utilizing offshore software development include General Motors, American Express, 3M, Cigna, DuPont, Weyerhaeuser, ING Group, Motorola, Accenture, British Airways, Intel, Deloitte Consulting, British Telecom, Amazon.com, Home Depot, Shell, Sprint, Nortel Networks, EDS, Aetna, and MasterCard. Major hardware and software giants like Microsoft, IBM, Apple, Oracle, Novel, Sun, IBM, Compaq and Texas Instruments all have extensive offshore operations. Not surprisingly, the largest industry sectors using offshore software development are those that are heavily dependent on information technology, including banking, insurance, and other financial services, communications, media, and software.

The successes of large multinational companies have generated strong interest in offshoring by small and medium sized companies, including an increasing number of technology start-ups. More than eighty percent of the software companies surveyed are shipping work offshore today or will do so in the next year, according to the Sand Hill Group, an investment and research firm based in San Francisco, California, who published the findings of survey of 51 software companies in July 2003. The study found that 63 percent of the responding companies are currently involved in offshore initiatives and an additional 21 percent are in the process of sending work offshore and will have such processes in place within a year. [7]

Drivers

Three primary drivers have produced the rapid growth in offshore outsourcing. They are:

1. Difficult economic conditions around the globe. Companies are being forced to investigate any and all opportunities to reduce their cost structures.

2. The large, wage-rate differences for similar skills that exist around the globe. The larger the differential between domestic wage rates and offshore rates translates directly into larger cost savings in both direct and indirect labor costs.

3. Demonstrated outsourcing successes by well-regarded companies. Numerous articles and case studies have been published that document the benefits achieved from offshoring by respected global corporations.

Incoda believes that businesses will continue to focus their attention on core business priorities and will increase their offshore outsourcing of non-core IT systems and processes. Potential customers for offshore services will continue to look for cost savings and are gaining a level of confidence with the delivery capabilities of offshore suppliers. Many of the today’s offshore projects will expand from discrete assignments to multi-year outsourcing engagements.

Enablers

Three enablers support the move to offshore outsourcing.

1. The increasing capabilities and falling costs of telecommunications worldwide, including high-speed Internet, instant messaging, web conferencing, and VoIP. These telecommunications advances, along with numerous productivity tools, such as collaborative project management software and knowledge management applications, enable businesses to leverage highly qualified workforces anywhere in the world.

2. Tax and other financial incentives offered by governments to nurture the growth of the IT services sector. For example, in India, the government plays an active role in promoting the software export industry, with initiatives such as the Software Technology Parks of India (STPI) and the Special Economic Zones (SEZ), which offer income tax exemptions until 2010. Other developing countries are also supporting their domestic software export industry through specific policies and tax incentives.

3. Availability of educated, technically skilled, and motivated workers in countries around the world. Long-term trends predict a shortage of IT talent in the world’s developed economies. In many countries, open technical positions remain unfilled because of a lack of applicants with the requisite technical and non-technical skills. On the supply side, India alone graduates roughly 110,000 computer professionals annually from its more than 1,800 educational institutions.

By Dr. Bernard L. Palowitch, Jr., President & CEO of Incoda Corporation.

Key differences between local and offshore software development

While many of the processes and practices for managing offshore outsourcing are similar to outsourcing to local suppliers, we have found that there are four major differences that are unique to offshore software projects.

1. Vendor selection and contract negotiation are more complex.

Today, more than twenty countries are considered to be offshore outsourcing locations. And within many of the most attractive countries there are at least several hundred potential suppliers. The processses of identifying an appropriate set of potential companies, conducting meaningful RFI and RFP activities, and negotiating project arrangements are much more difficult and time consuming than evaluating outsourcing vendors within one’s own country. The diverse cultures, foreign language barriers, differing time zones, difficulty in understanding and interpreting the information received, and unfamiliar legal systems and contract provisions are just a few of the factors than complicate using offshore suppliers.

2. Software requirements specifications need to be more clearly defined.

Customer requirements and design documents need to be developed with much greater accuracy and detail because the geographical separation between the onsite business users and the offshore team makes real-time communication much more difficult. Because of the physical separation and, in many cases, time-zone differences, the individual team members don’t have the luxury of getting answers and clarifications as quickly and easily as if their colleagues were sitting just a few seats away.

3. Roles and responsibilities of the project team need to be explicit.

Moving work offshore also focuses attention on clearly defining the roles and responsibilities for each step in the software development process. While most of the common software development methodologies can be followed to guide offshore work, the activities and tasks need to explicitly assigned and modified, as appropriate, to take into account that the people and groups responsible for the various work steps are geographically separate. On most projects, team members will never meet face-to-face over the duration of the project.

4. Successful completion requires better project management, including team communications, progress monitoring and reporting, and formal review of intermediate and final project deliverables.

Companies considering offshore development must recognize that offshore outsourcing presents a major management challenge and that the level of project planning, coordination, technical integration, and remote support for offshore projects is more complicated than performing software development solely in-house or with a local supplier. A huge hurdle is overcoming language and cultural barriers. For example, even in cases where the offshore supplier had an excellent command of the English language, we found that small nuances and slang terms in the requirements and in our online discussions introduced huge misunderstandings in the project outputs. More intermediate progress reviews should be conducted to make sure that the timetable is being met and test results should be constantly monitored.

By Dr. Bernard L. Palowitch, Jr., President & CEO of Incoda Corporation.