August 3, 2023
Cloud, artificial intelligence (AI), blockchain, big data and cyber security – the technologies expected to dominate the business landscape in the months ahead as digital transformation enters the next phase of maturity in Vietnam.
Enterprise enthusiasm has been strengthened by the example demonstrated in a public sector committed to innovation, evident through smart city projects in Ho Chi Minh City, Hanoi, Da Nang and Can Tho. This is supported by an e-government strategy designed to place Vietnam among the top 50 digital government countries in the world by 2025, up from 86th in 2022.
In a period of economic uncertainty, ambitious strategies by the state are required to provide additional layers of confidence to a market evaluating the rewards and risks of transformation.
“The Vietnamese government is focusing on digital transformation which is likely to drive further investment in these technologies,” observed Nguyễn Thu Trang, CEO of VNEXT Global.
For the private sector, such confidence is expected to translate into accelerated deployments of cloud, AI, blockchain, big data and cyber security solutions during the next 6-12 months.
“These technologies have seen rapid growth in the Vietnamese market and are being implemented widely across various industries, such as banking, e-commerce and telecommunications,” Thu Trang added.
According to Thu Trang, organisations are increasingly leveraging emerging and established technologies to solve a range of business challenges, from data security and automation to integrations, updates and cloud solutions.
“Data security is a top concern for organisations,” she explained. “They are seeking technology solutions that can protect their valuable data from cyber threats and breaches.
“Automation is another key priority, as businesses look to streamline their workflows and free up resources for more high-value tasks.”
From a project delivery standpoint, Thu Trang shared that systems integration and solution updates continue to represent “critical challenges” for companies navigating complex legacy environments.
“Organisations are seeking to seamlessly integrate different systems and applications to stay current with evolving technologies,” she added.
“Cloud solutions are also becoming more popular as organisations seek flexible, scalable and cost-effective IT infrastructure. Cloud-based solutions provide businesses with the agility and scalability needed to adapt to changing market demands.”
AI interest high but adoption limited
On the topic of AI, Thu Trang reported “growing interest” among local businesses in leveraging the technology to “drive innovation and remain competitive.”
“The use of AI, such as image processing, speech recognition and deep learning is expected to become more widespread in various industries, including healthcare, finance and e-commerce,” she stated.
This sentiment is notably evident within the enterprise, particularly with organisations possessing the financial resources and technical expertise to not only invest but also implement AI systems.
Market appetite in Vietnam mirrors that of other businesses in Asia Pacific and beyond, with CEOs citing AI as the top technology capable of “significantly impacting” their industry during the next three years – referenced by 21% of senior executives in a recent Gartner survey.
“Generative AI will profoundly impact business and operating models,” said Mark Raskino, Vice President at Gartner. “However, fear of missing out is a powerful driver of technology markets. AI is reaching the tipping point where CEOs who are not yet invested become concerned that they are missing something competitively important.”
While an element of FOMO (fear of missing out) exists in Vietnam, AI adoption remains “relatively limited” compared to more developed countries in this area.
“This is primarily due to the high cost of implementation and maintenance, as well as a shortage of skilled professionals with experience in AI,” Thu Trang highlighted. “Despite these challenges, I remain optimistic that we’ll see more businesses across all sectors embracing AI in the future.
“As AI technologies become more accessible and affordable, and as more skilled professionals enter the job market, we’ll likely see a broader range of businesses in Vietnam embracing AI as a tool for growth and innovation.”
Blockchain benefits on show
Hanoi-based VNEXT Global was officially launched in market on 11 October 2021, spinning off from parent company, VNEXT Holdings – a global software development and IT services outsourcing provider.
Scaling from three employees to more than 60 within less than two years, the start-up is building out a strong base of customers within the fields of mobile and web application development, blockchain and system development. In addition to Vietnam, customers now span the US. Singapore, Hong Kong, Germany and Switzerland.
“Our first aim is to focus on Asia Pacific as a region, particularly fintech and blockchain markets,” Thu Trang shared. “This market has demonstrated great development potential and we want to address the needs of our clients in this space.”
According to Gartner, worldwide banking and investment services IT spending is forecast to total $652.1 billion in 2023, an increase of 8.1% from 2022. Spending on software will see the largest growth with an increase of 13.5% expected by the end of the year.
“Current economic headwinds have changed the context for technology investments in banking and investment services this year,” said Debbie Buckland, Director Analyst at Gartner. “Rather than cutting IT budgets, organisations are spending more on the types of technologies that generate significantly higher business outcomes.
“Spending on software, for example, is shifting away from building it in-house, in favour of buying solutions that generate value from investments more rapidly.”
Reflective of the market potential, Thu Trang said VNEXT Global is actively seeking opportunities to bring fintech and blockchain expertise to the forefront across the region.
“We recognise that the financial industry continues to evolve and every financial institution has unique needs for digitalisation,” she added.
“We take a customised approach to deliver appropriate solutions – whether that’s developing custom applications, providing consultation services or integrating existing systems with blockchain technology.”
For Thu Trang, blockchain has “enormous potential” to transform the financial industry in Vietnam, offering a “secure and transparent” way of storing and managing data.
“This is critical in the financial sector,” she advised. “We believe that this technology can help financial institutions improve their operational efficiency, reduce costs and deliver better services to customers.”
All-in on IT outsourcing
Another key priority the business is seeking to capitalise on is opportunities related to offshore development centres (ODC), viewed as the “ideal approach” in broadening capabilities beyond Vietnam.
“We offer customised and collaborative experiences by having offshore teams that are exclusive,” Thu Trang outlined. “This strategy not only allows us to provide customised solutions to meet individual demands but to also optimise resources to ensure a high degree of quality and cost-effectiveness in our service delivery.”
To meet this company objective, VNEXT Global is continuing to invest heavily in people, processes and technology – spearheaded by a specialised team of fintech and blockchain experts.
“We are continuously expanding our knowledge and expertise in these areas,” Thu Trang said. “Additionally, we are developing and refining our project management and delivery processes to ensure that we can deliver projects on time and within budget.”
As an IT outsourcing company, the success of VNEXT Global naturally depends on the expertise and capabilities of a team consisting of highly skilled developers and engineers.
“Our team has extensive experience in a wide range of technologies and platforms,” Thu Trang said. “We have deep expertise in software development, testing, maintenance and support.”
But as Thu Trang explained, the biggest challenge currently is ensuring the stability and quality of human resources to maintain such standards of excellence. To overcome this challenge, the organisation has rolled out a “comprehensive HR strategy” to attract and retain top talent in Vietnam.
“Despite the challenge of stability and quality of human resources, we remain committed to providing high-quality services,” Thu Trang confirmed. “We are confident that our focus on talent development and retention will allow us to continue delivering innovative and effective solutions to our client’s business challenges.”
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