What Is Offshore Development? A Complete Guide to Why Vietnam Is a Popular Destination

Choosing offshore development can solve the IT talent shortage and rising labor costs that stand in the way of DX. This article covers the appeal of offshore development and of Vietnam, a popular outsourcing destination — useful reference for accelerating your DX.

In Japan, DX efforts are accelerating, but a shortage of DX talent is often the obstacle. METI's "Survey on IT Human Resource Supply and Demand" projects a shortage of roughly 450,000 IT professionals by fiscal 2030. This has sparked fierce competition for talent, driving up labor costs. If hiring IT talent is hard or costs are a concern, "offshore development" can help. This article covers the characteristics of offshore development and the appeal of Vietnam, a popular outsourcing destination.

1. What Is Offshore Development

Offshore development refers to outsourcing the development of software, web systems, or applications to an overseas company. Typically, planning, design, and delivery stay in-house, while development and implementation go to the overseas company.

1.1. Purpose of Offshore Development

Offshore development mainly serves three purposes.

(1) Cost reduction
Outsourcing to a lower-cost country cuts costs. In Japan, IT talent shortages push demand above supply, driving up labor costs. Offshore development is chosen precisely to solve this.

(2) Securing resources
Outsourcing system development overseas helps secure resources. Short-deadline projects especially need many IT professionals, which domestic firms often can't supply due to talent shortages. Offshore development solves this too.

(3) Securing skilled engineers
Depending on the destination, it can be easier to find skilled IT talent. Countries that focus on IT training tend to have excellent engineers, and as internet access closes the information gap, skill levels worldwide keep rising.

1.2. Benefits of Offshore Development

• Reduces system development costs
• Secures skilled engineers
• Can accommodate short-deadline system development

1.3. Drawbacks of Offshore Development

• Communication issues can easily arise
• Time zone differences may delay responses
• Differences in culture and business practices need attention

2. Why Vietnam Is Popular for Offshore Development

Vietnam is a popular destination for offshore development outsourcing. Why is Vietnam such a good choice? Here, we explain the benefits of outsourcing to Vietnam in detail.

2.1. Vietnam's Established Position as an Offshore Country

The Vietnamese government rolled out IT talent policies, achieving its vision of growing the IT workforce to 1 million by 2020. University students with hands-on training are ready to be productive engineers right away.
Per the "Offshore Development White Paper (2021)," 50% of companies wanted to outsource to Vietnam — proof of its firmly established status.
Per VINASA, Vietnam's IT market grew over 1,000-fold from 2003 to 2016, revenue rising from $62 million to $3 billion.

3. Hire Skilled Engineers at a Low Cost

In Vietnam, software engineers earn around $2,241 (roughly ¥250,000), and AI engineers around $1,844 (roughly ¥210,000) a month — about 1/2 to 1/3 of Japan's IT rates overall.
This may look low, but Vietnam's average monthly income is only $263 (roughly ¥30,000), so IT professionals are actually well paid by comparison — one reason they're highly motivated. Vietnam is chosen as an offshore destination for high-quality skills at low cost.

3.1. A Japan-Friendly Country That Makes Outsourcing Easy

Vietnam is well known as Japan-friendly. One reason: Japan ranks first among OECD members in ODA support to Vietnam. This support covers social and transport infrastructure and has helped spread education and healthcare, leaving many Vietnamese people grateful toward Japan.

Many Vietnamese people study Japanese, and more engineers now have Japanese ability, breaking down communication barriers. Offshore development often hits obstacles from language, culture, and custom differences, but Vietnam's Japan-friendly status makes outsourcing easier.

4. For Vietnam Offshore Development, Choose "Miichisoft"

If you're interested in Vietnam offshore development services, feel free to consult "Miichisoft." Here, we introduce the key features of Miichisoft's services.

4.1. Engineers with Work Experience in Japan

Miichisoft's founder lived in Japan long-term before gaining management experience at a Vietnamese offshore company. With bridge SEs who understand Japanese culture and customs, we deliver high-quality results on time.
Our team includes skilled engineers from Vietnam's top universities, maintaining a high 97% satisfaction rate.

4.2. Prioritizing Security in IT Development

In Miichisoft's offshore development, we prioritize security regardless of project scale, running regular checks to prevent issues like information leaks. In 12/2020, we obtained ISO 9001:2015 (Quality Management System) and ISO 27001:2013 (Information Security Management System) certification, so customers can use our systems with peace of mind.

4.3. Extensive Track Record in Offshore Development

Miichisoft has extensive experience in large-scale development using the latest technologies, with a broad track record of outsourced work from clients across Japan.

4.4. Awarded the Sao Khue Award for Contributions to the IT Industry

Miichisoft received the Sao Khue Award in July 2021 — a prestigious honor from the Vietnam Software and IT Services Association (VINASA) for companies contributing most to Vietnam's IT industry. We were recognized in the IT Services and Outsourcing category, building our foundation as a trusted offshore development company.

5. Summary

Effective use of offshore development can solve IT talent shortages and rising labor costs. Roughly 50% of companies choose Vietnam among offshore destinations, thanks to the government's IT talent policies building its strong position.
Miichisoft, a Vietnam-based offshore company, has an award-winning track record. If you're interested in Vietnam offshore development, reach out to "Miichisoft" for a consultation.

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