Gov’t approves use of IT outsourcing by enterprises, organisations

  • September 03, 2014

The government has given approval to enterprises and organizations to use information technology (IT) outsourcing, but many businesses remain hesitant to use such services.

IT outsourcing

FPT, the Vietnamese largest IT group, has signed a cooperation agreement with the Vietnam Railway Corporation on the development of a new ticket distribution system, according to Ha Noi Moi newspaper.

Under the agreement, FPT will build a modern e-ticket distribution system which allows people to buy tickets through different channels, either via websites, messages, or sale agents.

With the new system, which will replace the current one, people will be able to book tickets at any time convenient to them and update information about the ticket distribution process, itineraries and schedules.

It is expected that the project will be operating within seven years in three development stages, which will cost nearly VND200 billion.

FPT will regulate the system and share profits with the Vietnam Railway Corporation, earning profit equal to one percent of the revenue.

The business cooperation agreement, which by nature, is an IT service outsourcing contract, remains unfamiliar to many Vietnamese.

Commenting about the IT service outsourcing contract, experts said this is a wise move which can bring benefits to both sides.

Under such an agreement, FPT, the service provider, has a new client which allows it to take full advantage of its existing resources. Meanwhile, the railway corporation can have a ticket booking system without having to spend a lot of money and time on it.

Ngo Tuan Anh, deputy chair of BKAV, an Internet security firm, agreed that it would be better for enterprises and organizations to use outsourced services.

“You’d better use the services provided by professional units than do things yourself,” he noted.

However, there have not been many contracts like the one between FPT and the railway corporation.

The IT outsourcing service market in Vietnam is still tiny because Vietnamese enterprises still prefer following the “traditional investment mode” – setting up systems, and running and maintaining the systems themselves.

Thanh Nien newspaper quoted a report from Grant Thornton International Business Report (IBR) as saying that only 12 percent of businesses in Vietnam are open to outsourcing.

While the cost savings that outsourcing can provide are widely recognized, many business leaders worry about losing control of key processes. In other words, clients fear that the loss of control may cause information security problems.

Meanwhile, IT outsourcing service providers themselves can see problems that might make state agencies hesitate to use outsourcing.

Do Cao Bao, chair of FPT IS, a service provider, noted that state agencies have annual budgets for IT development, but the budgets only serve regular spending. Meanwhile, the State does not allocate budgets for IT outsourcing services.

However, analysts believe that IT service outsourcing is inevitable, and that it will facilitate the development of SMAC (Social Mobility Analytics Cloud), which is being used widely worldwide.

Trong Cam

source: vietnamnet


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