Intel built largest solar power station in Vietnam

After nearly five months of construction and a cost of approximately US$1.1 million, the new solar power station is expected to supply about 30 per cent of Intel’s total electricity consumption in a year for the next 20 consecutive years.

This new solar power station, comprising of 1,092 solar panels and 21 adapters, can directly provide the company with around 321,000KWh of electricity per year without using rechargeable batteries, equivalent to electricity consumed by 500 households in Vietnam.

This is the first and only solar power station built by Intel Corporation in Asia, many times bigger than the ones assembled by Intel in Israel and in Oregon, in the US.

In related news, on April 23, Nokia Corporation began construction of its mobile phone factory in the Vietnam-Singapore Industrial Park in the northern province of Bac Ninh.

The 17-hectare factory is expected to become fully operational by the beginning of next year. To be built at a total investment of $302 million, it will produce around 180,000 mobile phones per year and provide jobs for more than 10,000 workers with an average income of $300 per person per month.

Source: SGGP

PM approves 2010-2020 Science and Technology Development Strategy

Prime Minister Nguyen Tan Dung approved the Science and Technology Development Strategy for the 2010-20 period which targets boosting the value of high-tech and applied science products to about 45 per cent of GDP by 2020.

Under the strategy, the value of the science and technology (S&T) market will increase by an average of 15-17 per cent per year.

Outsourcing: Relationships Get Results

For managers wishing to appear dynamic and cost-conscious, outsourcing, near-shoring and off-shoring seem to provide the perfect solutions. All entail moving services or production to other countries which boast a charming combination of talented staff and lower labor costs, usually located in emerging markets such as Romania or Vietnam. Basically, outsourcing means having an external company do some activity instead of your own company. Near-shoring is when this is done by a country in proximity to the home country, such as Mexico is to the U.S. Off-shoring is when this is done by a country further away from the home country, like when a French manufacturer off-shores its IT work to India. The whole idea is to enable the home country to reduce costs, something which inevitably produces broad smiles on shareholders' faces. The point is to get results, cheaper. Sounds simple. So why does it often go wrong?

In reality, outsourcing projects are often badly planned and mismanaged, resulting in project delays, rising costs, soaring frustration levels and cross-cultural misunderstandings. In the end, cheap is expensive.

Why? Indians, Czechs, Poles and other nationalities that are considered outsourcing-friendly are usually extremely well-qualified and speak excellent English, albeit with an accent. This means that qualifications and language cannot account for the delays and misunderstandings so common in outsourced projects. The answer very often lies in the major but little appreciated aspect of cultural differences, and the different ways of "signaling" to business counterparts things such as importance, emotion and urgency.

Generally stated, international business cultures can be categorized into "task-oriented" (Scandinavians, German speakers, parts of the U.S. and the UK, for instance), and "relationship-oriented cultures" (India, Asia, Latin American, Southern and Eastern Europe, Africa, the Middle East, parts of the U.S. and the UK, for example). Crudely, task-oriented cultures tend to focus onthings -- contracts, facts, deadlines, etc -- rather than people. Relationship-oriented cultures consider people -- business dinners, small talk, sharing emotions -- of greater importance thanthings or even time itself.

Germany is a classic task-oriented culture. German managers often believe that their outsourced partners can be managed via email, with the occasional phone call thrown in to stress the urgency of some matter, followed up -- perhaps -- by an in-country visit once a year. All their home-based staff has to do is provide their Romanian or Indian counterparts with clearly stated data and milestones. Job done. For them, clearly defined parameters, deadlines and detailed contracts guarantee project success. How do business partners build trust? Through reliable, measurable behavior -- a deadline is universally understandable, right? Who needs to go to dinner? Besides, that would simply increase business expenses and result in nothing tangible.

But most of the world's seven billion people -- from Asia to the Middle East, Latin America to Southern Europe and beyond -- live in relationship-oriented cultures. Here, a handshake is of equal or greater importance than a contract, dinner with your business partner of more significance than some milestone. For relationship-oriented cultures, people are more important than things. "If a deadline is missed, come over, we'll talk about it and work things out. But tell me, how is your cousin doing..?"

In managing outsourced projects, task-oriented managers often prefer to use email, because it is quick, efficient and cheap. Often they believe that words such as URGENT!!! in the subject line -- bright red, of course -- means "please do now." A relationship-oriented counterpart, however, located in California or Mumbai often simply ignores or deletes this message. For them, "urgent" indicates factory on fire, boss kidnapped, war has broken out -- thus if it's urgent, don't email me -- burst into my office. Email, they reason, is cold, impersonal and thus unemotional; if something were truly "urgent" my counterpart would call, or better yet Skype or, best of all, fly out to talk to me -- or fly me to his headquarters.

Furthermore, task and relationship oriented cultures often possess different ideas of what "ASAP" signifies. My German clients believe it's synonymous with "immediately"; my British partner, in contrast, tells me it means "as soon as it is possible for me." Thus, it could take up to a week for him to do an "ASAP" task. In other words, for relationship-oriented cultures, the more important something is, the greater the need to have a face-face-meeting; if it is of lesser importance, email is fine. Just don't expect a reply.

In the end, the intangible costs of these subtle yet crucial cultural interpretations and "signaling" often offset the initial financial gains of outsourcing. Which type should defer to the other? Well, just looking at population figures, relationship-oriented cultures, including 1.1 billion Chinese, 350 million Arabs and 1.2 billion Indians, far outnumber, say, five million Finns. To ensure deadline commitment and on-time, in-budget, smoothly running international projects, the basic rule is: spend quality time with your relationship-oriented partner. Eat with him. Ask about his family. And remember: relationships get results.

What will happen when Google, Facebook set foot in Vietnam?

Under the draft decree on Internet and information content service management, foreign institutions which provide public information services across the border, attracting many users in Vietnamese territory, have to set up representative offices in Vietnam.

Once the draft decree gets approval and takes effects, the “big guys” in the field of digital content, such as Google and Facebook, would be officially present in Vietnam.

Source: TBKTSG

Software Outsourcing to Vietnam: A Major Challenge

This post comes out of a conversation I had with my friend Prithvi, who has years of experience in the outsourcing industry both here and in China and other countries.

Outsourcing is a huge industry here in Vietnam. It solves several problems for Vietnam. First, it brings in much needed income. Second, it does so without requiring a high ratio of expensive imported inputs (compare this to making shoes which are exported for a cheap price, but most of the costs come from materials which must be imported). Third, it helps advance domestic use of technology, which should make all industries more efficient.

Customers have a choice when choosing a destination for their software outsourcing needs. Why do they choose Vietnam? The primary reason would be cost. Vietnam has a low cost of living (which is rapidly being degraded by endemic inflation) and thus a low labor cost. A rule of thumb is that an Indian engineer can make half what an American engineer makes, while a Vietnamese engineer can make still half of what an Indian engineer makes. India, which has made a name for itself as a global leader and destination in software outsourcing, can now look to Vietnam as a supplier which they manage.

Another reason that companies choose Vietnam for outsourcing is the pool of talent. Young Vietnamese people see the IT industry as a large source of employment with attractive salaries even with little experience. The wages and work conditions certainly beat working in a factory. And their parents view education as an investment worth pouring money into.

But education is only a piece of what can make a Vietnamese outsourcing industry successful. A complaint about the American university system for software engineers is that years are spent studying theory and little time is spent learning practical knowledge. In Vietnamese universities and training centers, practical knowledge of the most currently in-demand technology brands such as Microsoft .NET or PHP are taught. However, there is still a gap between what is learned in school and what global industry best practices are now being used. Students learn how to build web sites using PHP, but they don't realize that even a PHP-based website nowadays isn't just hand-coded in straight PHP.

English!

Another massive failing of the education system is in foreign language. The largest market for offshore development shops looking for customers, especially well-paying ones, is the English-language market. Furthermore, nearly all software technology comes from the US, and even if not then the developers still use English to write all their documentation (nginx might be a notable exception). All programming languages use English keywords. Generally, programming books, which cost up to $100 in the US, can be pirated online as ebooks, or copied at local photocopy shops, which is a normal practice for distributing textbooks in Vietnam. But the number of texts in Vietnamese will always be far less than those in English, and nevertheless be behind the curve. So English language competency is key for any developer who wants to pick up basic skills on their own, and then do further research on blogs, reference sites, and community-edited answer sites like stackoverflow.

In English language skills, other Asian countries have an advantage. Hundreds of millions of Indians already speak English, many using it to communicate with each other. It's a similar situation in the Philippines, both countries with a large number of regionally popular local languages where English is a main lingua franca. In Malaysia, like India a former British colony, English is a commonly used tongue which receives support from both the government and business communities.

So the Vietnamese outsourcing industry has a bit of a disadvantage when it comes to language. Despite English language centers booming in the country, where increasingly affluent families are able to afford relatively expensive instruction from substandard schools, most Vietnamese students are only able to obtain competency in English through persistent self-learning. Distribution of English language publications is restricted and English-language television, which could easily benefit tens of millions of young people, is limited rather than promoted.

Without sufficient language abilities, the industry depends on a select few who have mastered the language enough to interface over written communications like email wth their foreign clients. For face to face, video, or in person communication, a great potential source lies in the overseas Viet Kieu community. Viet Kieu not only can speak English in a way that minimizes miscommunication, they understand the culture and how to find and sell to customers, especially through their existing networks. Despite government hurdles, a lot of Silicon Valley Viet Kieu have come to Vietnam to start businesses.

On the bright side, a growing sector of Vietnam's software industry is in Japanese outsourcing. Japanese companies are already here in Vietnam, primarily in manufacturing. But with a growing number of students choosing to study Japanese instead of or on top of English, Vietnam can become Japan's chosen destination for its outsourcing needs. While some Japanese companies still use English as a lingua franca within their Vietnamese operations, by making use of Nihongo possible, Vietnam can level the playing field with some of their neighboring competitors.

Vietnam is a top destination for investment beyond BRIC

In 2010, Vietnam has held its place for the third year running at the top of a list of emerging markets, outside of the BRICs, where UK firms should be looking to do business, according to global investors surveyed by UK Trade & Investment and the Economist Intelligence Unit.

In the next five years Asia's economy will grow by 50 per cent, and be comparable in size to the economies of the United States and Europe. By 2030 Asian GDP will exceed that of the G7 (June 2010 IMF report 'Asia Leading the way').

Vietnam is a top destination for investment as companies seek new sources of growth beyond the BRICs. Companies are now prioritising a range of second-tier countries alongside their well-established operations in the BRIC countries. In all, 71 per cent of respondents agreed that emerging markets beyond the BRIC countries collectively offer an opportunity too big to ignore. Asked to name their top three countries for investment over the next two years, Vietnam (selected by 19 per cent) was second only to China (20 per cent), edging out India in third place (18 per cent). This is the third consecutive year that Vietnam has been selected by executives as their number one investment target outside of the BRIC countries. Brazil was chosen by 14 per cent of respondents, putting it approximately in line with Indonesia (15 per cent) and South Africa (13 per cent). Russia, hard hit by the global recession, was chosen by just 8 per cent of respondents, making it less popular than Mexico (11 per cent), and roughly on a par with Turkey (9 per cent) and Nigeria (8 per cent).

Source: UKTI

Vietnam Gearing up to be Next Asian IT and Outsourcing Tiger

http://outsourceportfolio.com, the website which is a prominent outsourcing industry organ has come out with a definitive research(http://outsourceportfolio.com/research-articles/) report on Vietnam, spelling out in detail the opportunities available to the nation in the realm of outsourcing with particular emphasis on IT outsourcing. The report addresses the key issues of the factors responsible in driving this growth, the role of the government, and the key operating facts, costs and risks involved.

According to the report Vietnam has had one of the highest rates of growth in the world second only to China?s over the last ten years, and this trend is set to continue for the time to come and this generally augurs well for the economy. That apart Vietnam has followed a highly successful policy of creating niche export markets, which could not be serviced by China. It is well positioned to do the same with IT outsourcing.

The fact that IT is the fastest growing industry in Vietnam and between 1995 and 2008 it has attracted investment from 332 overseas IT firms bringing in a total investment of US$ 2 billion gives one an idea of the growth trajectory. The total investment is IT is slated to touch a figure of $ 3.5 billion by 2013.

At present revenue from the IT sector is a minuscule 5 % of the country?s GDP which if the present annual growth rate of 40% continues would reach a figure of 2.5% of the GDP at $ 6.2 billion by 2020. A good indicator of the way things might shape up is the case of Ho Chi Min city, which houses some 12000 IT businesses earning US$ 1.9 billion or 40% of the country?s total economic revenue.

The report shares some revealing insights into the dynamics of the emerging IT sector of the country. For one the IT outsourcing industry in Vietnam is highly fragmented and of the 10000 firms licensed to provide IT services only 3000 are operational. That notwithstanding a lot of global players are present in the country including FPT Software with 2700 employees, CMC and Global Cybersoft. In fact a slew of global companies such as Accenture, Alcatel-Lucent, Bayer, BMG, Cisco, Sony, Oracle and so on have outsourced IT related work either directly or through third parties to Vietnam.

There have also been a series of critical mergers and acquisition between global and local IT firms. Cases in point being the one between Cap Gemini and IACP Asia and between CPR International and the Sara group. The Vietnamese government too as extended whole hearted support to the industry by way of liberalizing the investment environment around technology start ups and setting up more than 186 industry and five software zones that offer tax incentives, value added tax rebates and services for processing tax and business applications and relaxed rules pertaining to the entry and exit of expatriates. The government also plans to invest US$ 58 million by 2012 to boost the country?s software and digital content industry.

In terms of the regulatory environment the country fares moderately with a 40% of the country?s GDP coming from state owned enterprises. But the government is doing what it can to promote privatization including a 30% reduction in corporate tax for small and medium sized businesses. In terms of intellectual property rights Vietnam is at 77th position out of the 115 countries surveyed and could do with some improvement there. In network readiness too Vietnam has made rapid progress being at no 70 against India?s 54 and China?s 46.

In so far as infrastructure is concerned, Vietnam with its long legacy of war performed creditably at number 70. The government has pledged to spend 11% of GDP on further ramping up architecture. In terms of Human Capital Vietnam has the advantage of possessing a highly educated and well trained work force which takes quite well to computer training. Add to that the lower salary costs (30% to 66 %below India and China?s) and you are looking at serious competition. Vietnam is also making every effort to have quality benchmarks in place.

What makes it particularly attractive is the perception that it is a moderate to low risk country with a stable polity. Corruption and susceptibility to natural disasters were the down sides to an otherwise fairly sanguine outlook. You can find more information about Vietnam outsource potential from http://outsourceportfolio.com/vietnam

http://outsourceportfolio.com is the most prominent site in providing reliable information about outsourcing. It’s main vision is to offer a platform for outsource professionals from all over the world to share their experience through blogs, articles, vendor analysis, and research reports. It provides honest and objective opinion on the globalization issues to its visitors and members. The website is the brainchild of Twin Cities,Minnesota based IT professional Mani Malarvannan who started the site in 2008 using the expertise he acquired by running his own IT consulting services firm Cybelink and very quickly made it the definitive voice of the BPO and outsourcing industry.

Six Key Factors in the Right Outsourcing Decision

Since my background includes software development, I often get the question about when to build a solution in-house, versus outsourcing it to a local company, near-shore service, or off-shore organization in China, India, or Eastern Europe. In the USA, “near-shore” is a euphemism for connected countries, like Mexico and Canada.

There is no simple answer to that question for all cases, but there certainly are some key considerations which will help you select the optimal solution for your case. In fact, the considerations are not unique to software development – they apply almost as well to any product or service you have:

1. Control of core competency. Don’t outsource your core competency. If your software is your solution and “secret sauce,” don’t entrust it to outsiders of any kind. It’s like giving up control of your company. If the software is ancillary to your mission, proceed through the rest of these considerations.
2. Intellectual property content. Some country cultures have little appreciation for software as intellectual property. For example, 90% of the software used in China and Vietnam today is pirated. Near-shore and local outsourcing alternatives are manageable with contracts and non-disclosure agreements. Protect your intellectual property.
3. Technology level. If you expect your solution to incorporate the absolute latest in software technologies, scalable to millions of users, with multi-system failover and recovery, don’t count on out-sourcing. On the other hand, if it is maintenance and testing on non-core software, use the lowest cost solution.
4. Cost factors. Companies in Asia and Eastern Europe can still provide direct cost reductions of up to 75%. In these calculations, be sure to include indirect costs of remote work, such as more project management, more travel, and less efficient communication. The net may be less cost reduction than you thought.
5. Product or services. Once product software is written, it doesn’t take much effort to deliver it to customers. Software services, on the other hand, involve the creation of software customized for a specific situation, with a relatively low level of leverage and reuse. Outsourcing for services needs to be carefully managed, and almost never works.
6. Creative or operational. Creative products, like chip design programs, architectural rendering, or consumer games are not easily outsourced. Operational products, like process automation or reservation systems, may be large but mundane, and more easily outsourced. In all outsourcing cases, a detailed specification is required.

The typical software startup these days is a one or two person operation, founder and co-founder, who do the work themselves on the first product with no salary. With today’s tools, they can do the work of a six or eight-person team 10 years ago, so software outsourcing is not appropriate.

On the other hand, if your startup is not software oriented, but you need some work done (not central to your product and core competency), it is usually better to outsource, either locally or remotely, than to hire employees, manage them, pay benefits, and maybe have to lay them off later.

If you do decide to outsource, build the relationship first, and manage the project carefully. Watch for evidence of inadequate staff and training, high turnover, poor or inadequate process, and lack of vendor project management. On your side, the killers are poor specifications, no acceptance criteria, and scope creep.

Overall, I believe that the demise of software entrepreneurs has been greatly exaggerated. Whether you are outsourcing software development, manufacturing, or accounting, the considerations are the same. Outsourcing is a tool, not the problem or the solution.