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CIO Strategy: Hiring a Vietnamese Software Team for Australian BFSI Company
Digital transformation trends have led to an increased demand for highly skilled tech talents, intensifying pressure in the realm of providing training and re-skilling. According to recent research by Deloitte, approximately 87 per cent of jobs in Australia require digital literacy skills, and by 2025, the country will witness a surge of additional 156,000 digital technology workers.
To bridge the skills gap and pave the way for more diversity in the technology industry, many Australian businesses are looking for ways to explore offshore partnerships, particularly with Vietnam, renowned for its vibrant and talented software development industry.
While there are various engagement models with different pricing structures available, the dedicated software development team model is most suitable for businesses seeking a long-term commitment. This article aims to offer a comprehensive guide for CIOs and CTOs, equipping them with the key strategies to effectively recruit Vietnamese dedicated software teams for their businesses.
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Advantages of Dedicated Software Team Models
Despite the disputes regarding how and when to outsource software development or whether it is worthwhile, the global IT outsourcing market in 2023 is anticipated to amount to US$430.50 billion. It is evident that offshoring software development has gained significant popularity in recent times, with more and more corporations building their dedicated software development teams in regions like Asia and Eastern Europe.
The cost advantage can be the significant factor that convinces some organisations to choose the dedicated development team approach for their IT projects. Other businesses, however, consider other factors before continuing the strategy of hiring software teams in other countries.
1. Time & Cost-Efficiency
It is economically more affordable to hire a dedicated development team than to gather and build an internal IT team. Building an internal team requires careful consideration of all the administrative procedures and search expert developers, which is time and effort-consuming. Moreover, recruiting local talent with the necessary skillsets and experience could be challenging for the budget.
The dedicated team model, on the other hand, is a practical approach since the team is already in place and has experience with certain technologies needed for your project. By having an outsourcing partner handle the administrative tasks, businesses may devote more resources and time to concentrate on the core operations.
2. Flexible Team Composition
Flexibility is one of the most important benefits of building a dedicated team with a tech partner. This is also often the reason why businesses that originally didn’t have internal tech teams or access to required talents consider this model. The thing is, in numerous instances, clients are unaware of the specific specialists they need for an IT project.
At the initial stage, an IT service provider will carefully assess project requirements and objectives, from that, proposes a classic optimal team structure, e.g., a project manager, UX/UI designer, front-end & back-end developers, and a QA specialist. However, as the project evolves, it may need new competence or additional manpower. In such cases, the service provider can tap into their resources and swiftly scale up the team. For instance, if there is a requirement to swiftly expand your backend team by hiring .NET developers, the vendor can identify suitable candidates within weeks, in contrast to the months it would take to recruit quality candidates internally.
3. Delegated Management
This is another reason why many corporations without technical expertise or experience in managing IT projects opt for this model. A vendor has the capability not only to assemble a comprehensive full-stack team but also to lead and coordinate the team throughout the entire process.
In practice, dedicated product teams can take charge of a project from its conceptual stage, make technology choices, devise an efficient development strategy, execute it, and ultimately deliver a fully functional product based on the client’s requirements.
When Do you Need a Dedicated Software Team?
As previously mentioned, the dedicated software development team model is well-suited for a wide range of software projects due to its inherent flexibility throughout the entire software development life cycle. Typically, this approach is utilised for long-term software development projects with a limited initial scope of work but has the potential for future scalability.
1. Long-Term Commitment Project
First and foremost, dedicated teams that are committed to long-term collaboration typically offer lower hourly rates, which can be further negotiated under particular conditions. In this scenario, the dedicated software development team takes responsibility for ensuring that each stage of the software development life cycle is completed within the allocated time frame, budget and with the desired level of quality. Additionally, even after the solution is delivered, you can continue working with a support team that will regularly address system errors and provide system upgrades.
On top of that, let’s briefly look at the case of tech giants such as WhatsApp as they engaged a dedicated team of software engineers to help them with the iOS app. Among other organisations that have also embraced the dedicated team approach are Apple, American Express, Oracle, IBM, Amazon, Buffer and 10up.
2. Early-Stage Project
If you are an established startup with well-defined internal processes and a willingness to scale your business while integrating custom automated software, opting for a dedicated software development team is an ideal choice.
Collaborating with a software vendor in this manner saves time in terms of hiring, onboarding, and initiating the development process. It can be tailored to align with your core business needs and requirements, all while being executed within your budgetary constraints.
3. Software Project with Variable Specifications
Many businesses often overlook the crucial discovery stage in the software development life cycle, which involves validating the software product/solution idea, assessing its market fit, researching competitors, and establishing project requirements. In such cases, a dedicated software development team takes on the responsibility of conducting the discovery stage, even if the development process has already commenced with internal developers or another outsourcing team. This stage is typically the most vital and enduring, as it lays the foundation for each subsequent step within the project.
Why Vietnam is the Best Option to Build the Dedicated Software Team
When considering offshore destinations for IT projects, Asian countries like China, Vietnam, Indonesia, etc., are frequently emerged as potential choices. Vietnam, in particular, is rapidly emerging as a prominent destination in Asia for developing cost-effective yet high-quality software.
- Transformative Growth: Vietnam is currently a significant rival and alternative to China and India. By 2050, it is expected to be one of the fastest-growing economies and rank among the top 20 in the world. With an impressive annual growth rate of 13.31%, Vietnam's IT outsourcing sector is projected to surge from $534.90 million in 2023 to $881.90 million by 2027.
- Affordable Labour Costs: The cost of offshore outsourcing services in Vietnam is 70% lower than that of Australian services and is much cheaper than the costs from other ASEAN countries. In comparison to the costs of Indian developers, developing software in Vietnam is one-third to one-seventh the cost.
- High-quality Talent Pool: With approximately 430,000 software developers and 1,030,000 ICT professionals, Vietnam possesses the largest workforce of software developers among Southeast Asian nations. The country is in the top 50 of the ICT Development Index and is one of Asia’s fastest-growing economies. Many Vietnamese IT & Solution Providers are now open to potential innovations.
Why Dedicated Team is Fit for BFSI Industry
According to KMS Solutions' Digital Banking Report, 69% of Australian banking users indicate that emerging technology is a key element when selecting financial institutions or banks for their financial activities.
The banking industry in Australia is currently undergoing a significant shift driven by factors such as emerging technologies and changing consumer expectations. However, incumbent banks without prior experience in technology may encounter difficulties in modernising their legacy IT systems to integrate the latest digital advancements. Some common challenges of financial institutions in digital transformation are:
- Rising cybersecurity risks
- Lack of interoperability and integration between systems
- Skill shortages
- Keeping up with user expectations.
Therefore, engaging with the right dedicated software team will help financial institutions concentrate on their core operations, and here’re the reasons:
1. Industry-Specific Expertise
Building an in-house software development team that contains talents who have strong domain knowledge and experience in the BFSI sector can cause significant time and effort. In contrast, you can develop robust and reliable software solutions by engaging with an experienced development team familiar with the complexities of financial processes, data structures, and integration requirements.
Additionally, they can also provide insights into financial products and help define potential areas for improvement in your system.
2. Scalability and Flexibility
The BFSI industry often faces fluctuating workloads due to factors like seasonal peaks, regulatory changes, or market fluctuations. The dedicated team model allows businesses to easily scale their team size up or down based on the current workload. This flexibility ensures that the right resources are available when needed, optimising operational efficiency and cost-effectiveness.
3. Long-term partnership
As mentioned above, building a long-term partnership with a dedicated team fosters a deeper understanding of the business goals and challenges within the BFSI sector. This collaboration enables seamless communication, efficient knowledge transfer, and a stronger alignment of the software development efforts with the industry's evolving needs.
How to Choose Vendors for a Dedicated Software Team
Choosing the right vendors for a dedicated software team requires careful consideration of various factors. Here are some critical steps to help you make an informed decision:
- Define project requirements: Clearly outline your project requirements, including technology stack, skill sets, project scope, timeline, and budget. Having a clear understanding of your needs will guide your vendor selection process.
- Conduct thorough research: Explore and research potential vendors that offer dedicated software team services. The best practice here is to check out some reliable lists of top software development vendors!
- Assess expertise and skill sets: Evaluate the expertise and skill sets of the vendor's software development team. Consider their experience with relevant technologies, programming languages, frameworks, and methodologies. Look for a vendor that can provide the specific skill sets needed for your project.
- Check vendor reputation and references: Assess the vendor's reputation in the industry. Look for customer reviews, testimonials, and case studies to gauge their reliability and credibility. Additionally, ask the vendor for references and how they onboard and progress. Check out some questions to ask your financial software development team here!
- Evaluate communication and collaboration capabilities: Effective communication and collaboration are vital for successful collaboration with a dedicated software team. Evaluate the vendor's communication channels, project management tools, and their ability to align with your preferred communication practices to ensure that they can provide regular updates, address concerns, and maintain transparent communication throughout the project.
- Assess infrastructure and security measures: Evaluate the vendor's infrastructure, data security measures, and compliance with industry standards. Ensure that they have robust security protocols in place to protect your sensitive data and intellectual property.
- Gauge financial stability: It’s essential to understand the dedicated software team’s financial health to ensure how they can partner with you in the long term.
- Schedule demos and interviews: Conduct interviews to further assess their technical expertise, problem-solving skills, and their ability to align with your project goals and values.
Vietnam has emerged as a leading destination for software development, offering a unique combination of high-quality output and cost-effectiveness. By engaging a Vietnamese software team, Australian companies can benefit from the team's expertise, dedication, and ability to deliver tailored solutions. The dedicated team model provides flexibility, scalability, and cost-efficiency, allowing businesses to rapidly adapt to changing project requirements and market dynamics.
Among different IT service providers in Vietnam, KMS Solutions has established a strong presence and reputation in the field of software development. With a solid footprint in the industry, we have demonstrated our expertise and capabilities in delivering high-quality software solutions to clients.
Moreover, with an in-depth understanding of the BFSI industry and technical prowess, we can create innovative and reliable financial applications that meet the stringent requirements and regulatory standards of the sector. Please feel free to get in touch with us to discuss your business requirements.