Vietnam is a promising market for digital office solutions, as more and more businesses seek to improve their processes and efficiency. In this article, we will explore the potential opportunities for foreign providers of digital office services in Vietnam. Digital office solutions are software applications that help businesses manage various aspects of their operations, such as accounting, logistics, warehousing, customer management, document management, and more. These solutions can help businesses save time, reduce costs, enhance productivity, and streamline workflows.
However, the digital office market in Vietnam is still largely dominated by small-scale local providers, with limited presence of major global players.
According to the Vietnam Association of Software and Information Technology Services (VINASA), about 40 percent of Vietnamese businesses have expressed a strong interest in adopting a dedicated business operating technology platform. These businesses recognize that such a platform can boost their growth and competitiveness. Therefore, this situation creates a significant opportunity for foreign firms that want to enter the market.
If you are a digital office solutions provider looking to expand your business in Vietnam, here are some key points you need to know.
Vietnam is a promising market for digital office solutions, as more and more businesses seek to improve their processes and efficiency. In this article, we will explore the potential opportunities for foreign providers of digital office services in Vietnam. Digital office solutions are software applications that help businesses manage various aspects of their operations, such as accounting, logistics, warehousing, customer management, document management, and more. These solutions can help businesses save time, reduce costs, enhance productivity, and streamline workflows. However, the digital office market in Vietnam is still largely dominated by small-scale local providers, with limited presence of major global players. According to the Vietnam Association of Software and Information Technology Services (VINASA), about 40 percent of Vietnamese businesses have expressed a strong interest in adopting a dedicated business operating technology platform. These businesses recognize that such a platform can boost their growth and competitiveness. Therefore, this situation creates a significant opportunity for foreign firms that want to enter the market.
If you are a digital office solutions provider looking to expand your business in Vietnam, here are some key points you need to know.
Market overview
The Ministry of Information and Communications (MIC) reported that the information and communications technology (ICT) industry generated about US$148 billion in revenue in 2022, growing by 8.7 percent compared to 2021. The software and information technology services market in Vietnam reached US$1.9 billion (equivalent to VND 46,500 billion) in revenue in the same year.
Fitch Solutions projected that Vietnam’s IT market, which includes both hardware equipment and software solutions, will reach about VND 208 trillion in 2022 (US$8.8 billion) and VND 370 trillion (US$15 billion) by 2026. This projection implies a compound annual growth rate (CAGR) of 15 percent. These numbers show the huge potential and favorable prospects of Vietnam’s IT sector.
Challenges
However, there are also some challenges that foreign digital office solutions providers should be aware of when supplying their products to Vietnamese businesses.
Local businesses need guidance on choosing the right products
Many Vietnamese businesses lack clear digital transformation goals and strategies, which leads them to use the wrong software for their needs. Only 6.2 percent of businesses in Vietnam have successfully defined their digital transformation objectives, and only 7.6 percent have developed comprehensive short-term and long-term digital transformation plans.Foreign firms that want to enter this market should make sure they can clearly explain their products and how they can benefit their potential customers. They should also be ready to offer customized solutions that suit the specific needs and preferences of the local market. This way, they can not only establish a strong position in the industry but also gain an edge over their competitors.
Cost is an issue
The Annual Report on Enterprise Digital Transformation 2022 released by the Ministry of Planning and Investment revealed that less than 40 percent of enterprises have the necessary budget to meet their digital transformation needs.
On the other hand, about 43.3 percent of enterprises have an allocated investment budget for digital transformation, but it is insufficient for their actual needs. Moreover, a staggering 20 percent of enterprises do not have any budget at all for digital transformation.
The lack of financial resources for digital transformation is a common challenge faced by Vietnamese enterprises, especially small and medium enterprises. This can hinder their ability to compete in an increasingly digitalized business environment and may lead to missed opportunities for growth and innovation.
Foreign firms should be aware that the cost-effectiveness of a digital office solution will be a priority for Vietnamese businesses.
Privacy may be a concern
Vietnamese employees may have legitimate concerns about using digital office solutions that can monitor their performance. Organizations may find it hard to balance between protecting employee privacy and improving productivity.
To optimize data privacy and minimize potential risks, it is advisable to adopt a data collection approach that prioritizes minimalism, aiming to collect only essential information. Additionally, when possible, applying anonymization techniques can further enhance data protection. Furthermore, organizations should establish and uphold a transparent policy on privacy and data collection, ensuring that stakeholders are fully aware of how their data is being handled.
Key opportunities
Accounting software
Accounting is one of the areas where digital transformation is most prevalent, with over 40 percent of enterprises consistently using digital accounting technology at an advanced level – as mentioned earlier, most of the surveyed enterprises prioritize digital transformation in areas that directly affect their revenue and profitability.
Foreign firms that offer digital office solutions that include accounting software may have an advantage over other options.
Logistics software
In the field of vehicle management and goods transportation, more than 60 percent of enterprises use digital software at a minimal level or rarely use it at all.
For foreign investors targeting this market to sell digital office platforms, this represents a significant opportunity. However, they may face some challenges in terms of convincing these businesses of the benefits of digital software adoption, as more established companies may be less willing to change.
Warehousing and customer management
Moreover, more than 40 percent of enterprises seldom use digital software for warehouse management, order management, or customer management.
Only about 40 percent of businesses in these sectors use digital technology extensively and regularly. This represents a significant opportunity for firms with technology that can help in warehouse and customer management, such as customer retention management solutions or stock and inventory tracking software.
Regulations
One major concern with digital office apps is the possibility of cyberattacks or data breaches. Vietnam takes these challenges seriously and has several laws governing cybersecurity and data management.
Law on Cyber Information Security
To address this issue, the Law on Cyber Information Security outlines the regulations on cyber information security activities, as well as the rights and responsibilities of agencies, organizations, and individuals in ensuring network information security.
It covers provisions on civil cryptography, standards and technical regulations, as well as conducting business activities in the network information security domain, developing human resources for network information security, and state governance.
The main focus of the Law on Cyber Information Security is to ensure three essential aspects of data protection: confidentiality, integrity, and availability. It aims to prevent forgery, exploitation of vulnerabilities, and the spread of malicious software that could potentially disrupt information systems and networks.
Decree on Personal Data Protection
The Decree on Personal Data Protection (PDPD) applies to all individuals and entities operating in Vietnam who engage in the provision, collection, or use of data for any purpose within the country.
Digital office software providers need to be aware that customers must be notified if their data is being collected and informed about the purpose and intended use. Collected data must be relevant to the purpose for which it is to be used. Personal data cannot be bought or sold, and it must be protected and kept confidential. Time limits must be followed, ensuring data is only stored for the necessary processing period.
Key players
There are two key major players in digital office software (though there is room for many more).
Vietnam Posts and Telecommunications Group (VNPT)
VNPT is a Vietnamese digital technology enterprise that focuses on providing digital services in Vietnam.
VNPT is building a solid foundation of infrastructure and human resources to provide high-quality services to 34.8 million mobile subscribers, 6.2 million fixed subscribers, and enterprise customers. VNPT is also developing its cloud computing ecosystem, becoming a core brand for domestic and regional cloud computing services.
VNPT is also supporting the government to digitize its processes and functions.
MISA AMIS
MISA is one of Vietnam’s prominent software entities, with a customer base of 250,000.
MISA AMIS Digital Office Solution suite covers a range of digital office software, including MISA AMIS Processes, MISA AMIS Work, MISA AMIS Recording, MISA AMIS Assets, MISA AMIS Social network, MISA AMIS Meeting Room, and MISA AMIS WeSign. These software solutions help streamline processes, manage meeting rooms, and sign digital documents and contracts, among a range of other functions.
Today, the company employs a workforce of over 2,000 individuals, comprising the Corporation’s office, the Manufacturing division, the Customer Support and Consulting Center, and with five representative offices nationwide.
Other players
However, the digital office market in Vietnam also comprises several smaller firms specializing in niche sub-sectors. These include but are not limited to:
ERPviet and Viindoo provide comprehensive enterprise management and business administration solutions.
SmartDOCS provides efficient document management and digital converter solutions for businesses seeking streamlined processes.
V2CAM aids in customer experience and omnichannel operations management.
Trace Traceability Trace AES ensures effective traceability management to track the origin of goods.
CoffeeHR and Smartlog Solutions help streamline supply chain operations.
Digital office software market outlook for Vietnam
The digital office market offers an exceptional opportunity for foreign investors looking to capitalize on the growing demand for advanced digital workplace solutions in Vietnam.
As the Vietnamese economy continues to thrive, investing in the digital office market promises significant returns and the ability to shape the future of work for businesses across various industries.