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.

1. VIETNAM SOFTWARE OUTSOURCING VENDOR
CHECKLIST FOR SELECTING
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
Any political conflict in the last 10 years
Religious, ethnic disputes
Economic growth and stability
Political Stability
Software park, high tech park
Number of multi-national high tech companies
Technology
Capability
Earthquake, flood, typhoon, hurricane, tsunamiNatural Disasters
A. COUNTRY AND CITY EVALUATION
(Top 3 Vietnam cities: Ho Chi Minh City, Hanoi, Da Nang)
Internet connectivity
Electricity up-time
Transportation
Infrastructure
Number of IT graduates
Availability of resources
Supply versus demand
Human
Resources
English, Japanese, etc.Language skill
Average salary of IT engineers at different levels: junior, senior,
technical lead, project manager
Pricing
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Checklist
A. Country and City Evaluation
Key steps to go offshore
B. Vendor Evaluation

2. Tax incentives
Time zone
Others
Company profile and reputation
Number of years in software outsourcing business
Case studies that are relevant to your needs
Track record
List of available vendor services and experience in each service
Compare to your short and long term needs
Service offerings
B. VENDOR EVALUATION
Overseas offices
Any offices in your country
Global presence
Number of active clients
Number of active clients that are large companies
Number of clients similar to your company
Customer list
Ability to expand
Electricity up-time, power generator
Internet connectivity, VPN
Network and communication
Backup system
Infrastructure
Your friends’ feedback
Tourism preference
Multi-national companies’ reports, e.g. HSBC
Living Condition
for Expat
Number of engineers
Ability to attract talent
Recruitment process and criteria
Staff motivation and incentives
Human
Resources
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3. Attrition rate
Training system
Human
Resources
Skills coverage
Experience in large and complex projects
Innovation, R&D capability
Technical skill
Language proficiency (written and verbal)
Language training
Language skill
Resource pool
Ramp up time
Ramp up
capability
Domain expertise: finance, e-commerce, healthcare, education,
etc.
Technical skills: C++, Java, C#, PHP, mobility, cloud, testing, big
data and analytics, etc.
Relevant
experience
Engineering process maturity
Certification
Project management tools
Metrics
Reporting
Visibility of offshore team activities
Escalation procedure
Quality process
Physical security
Network security
Data security
Internal procedure
Business continuity
IP Protection and
Security
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Pricing models
Blended rate
Rate increase
Pricing

4. Financial stability
Business continuity plan, disaster recovery plan
Dependency on a single customer, domain or market
Sustainability
Limitations
What the vendor cannot provide
Key Weaknesses
Value propositions
Key expertise
Differentiation from other vendors
Key Strengths
Non-labor costs
Overall cost
Payment term
Pricing
Professionalism
Commitment
Flexibility
Open & friendly
Integrity
Proactive
Innovative
Culture
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5. 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?
Outsourcing
objectives
Outsourcing
vendor criteria
What services do you expect a vendor to provide?
What will be outsourced and what will be kept in-house?
Timeframe: when will you start the first outsourcing
project?
Prepare RFI/RFP
Vendor list
Collect potential vendors based on:
KEY STEPS TO GO OFFSHORE
STEP 1
STEP 2
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
The list of
potential
vendorsGoogle search
Recommendations from your network
Industry awards and rankings
STEP 3
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6. Due diligence
Evaluate and select a vendor
Test project (optional)
Master
agreement with
the selected
vendor
Kick off 1st
project
Based on the results of due diligence and test project
Negotiate a master agreement as the framework for the
engagement
Vendor 1st
evaluation
Send RFI/RFP to all vendors
Site visit to the short-listed vendors (optional but
recommended)
Plan for the first project: scope, performance measures,
team size, team members
Based on RFI/RFP responses, rank the respondents to
create a vendor short list (shouldn’t select more than 3
vendors and 2 cities)
Project results
(delivery,
communication,
dealing with
issues)
Pilot project with one or several short listed vendors
STEP 4
STEP 5
STEP 6
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