Few Vietnamese businesses open to outsourcing study

The International Business Report, based on interviews conducted last November with more than 3,300 CEOs, managing directors, chairpersons, and other senior executives from all industry, reveals that only 12% of businesses in Vietnam are open to outsourcing.

The effectiveness and cost saving of outsourcing are not realised by many Vietnamese companies, and so the service providers need to increase access to these companies, a potential market, said Trinh Thi Tuyet Anh, director of outsourcing at Grant Thornton Vietnam.

In certain cases, enterprises think they could lose control over critical business processes if they outsource, she said.

For small- and medium-sized enterprises in Vietnam, the cost of professional outsourcing services will be a considerable expense, she added as a reason for the unwillingness of Vietnamese firms.

Globally too the majority of business leaders have no plans to outsource any business processes in the near future. While the cost savings and process efficiencies that outsourcing can provide are widely recognised, many business leaders are worried about losing control of key processes.

Around 60% of global businesses have no immediate plans to outsource a business process. Outsourcing is least prevalent in Southeast Asia (26%), Eastern Europe (31%), and the Nordic countries (33%).

By contrast, more than half of businesses in southern Europe (64%) and Latin America (51%) either currently outsource or plan to.

Trinh Thi Tuyet Anh, director of outsourcing at Grant Thornton Vietnam, said outsourcing is a helpful tool for restructuring manpower; freeing resources from administration, and re-allocating them to operations.

Among those businesses which currently (or plan to) outsource back-office services, 57% globally cited improving efficiencies — marginally ahead of reducing cost (55%) — as the key drivers. In Asia - Pacific, both figures are 37%.

Of those businesses with no plans to outsource, the requirements to find cost savings (41%) and process efficiencies (33%) are the main reasons that will encourage them to consider it.

Anh said the results clearly show that outsourcing is worthy of serious consideration. Aside from driving efficiencies and reducing costs, outsourcing can allow business to tap into skills and expertise offered by their providers that might not necessarily be as readily available in the local labour market.