Most Vietnamese companies are unwilling to use outsourcing despite itsbenefits like the reduction in management work and payroll without anyimpact on output, a report released last week by business consultancyGrant Thornton says.
The International Business Report, based oninterviews conducted last November with more than 3,300 CEOs, managingdirectors, chairpersons, and other senior executives from all industry,reveals that only 12 percent of businesses in Vietnam are open tooutsourcing.
"The effectiveness and cost saving of outsourcingare not realised by many Vietnamese companies, and so the serviceproviders need to increase access to these companies, a potentialmarket," Trinh Thi Tuyet Anh, director of outsourcing at Grant ThorntonVietnam, told Vietnam News – the national English language dailypublished by Vietnam Nam News Agency.
In certain cases, enterprises think they could lose control over critical business processes if they outsource, she said.
"Forsmall- and medium-sized enterprises in Vietnam, the cost ofprofessional outsourcing services will be a considerable expense," sheadded as a reason for the unwillingness of Vietnamese firms.
Globallytoo the majority of business leaders have no plans to outsource anybusiness processes in the near future. While the cost savings andprocess efficiencies that outsourcing can provide are widely recognised,many business leaders are worried about losing control of keyprocesses.
Sixty percent of global businesses have no immediateplans to outsource a business process. Outsourcing is least prevalent inSoutheast Asia (26 percent), Eastern Europe (31 percent), and theNordic countries (33 percent).
By contrast, more than half ofbusinesses in southern Europe (64 percent) and Latin America (51percent) either currently outsource or plan to.
Trinh Thi TuyetAnh, director of outsourcing at Grant Thornton Vietnam, said:"Outsourcing is a helpful tool in restructuring manpower; freeingresources from administration, and re-allocating them to operations.
"Accordingly,the enterprise can benefit from lower payroll costs without sacrificingoutput capacity. Senior leaders of these lean, dynamic organisationsalso have more time to focus on the strategic priorities for theirbusiness."
Among those businesses which currently (or plan to)outsource back-office services, 57 percent globally cited improvingefficiencies - marginally ahead of reducing cost (55 percent) - as thekey drivers. In Asia - Pacific, both figures are 37 percent.
Ofthose businesses with no plans to outsource, the requirements to findcost savings (41 percent) and process efficiencies (33 percent) are themain reasons that would encourage them to consider it.
Businessleaders in the developing economies are more likely to use outsourcingto access expertise: 46 percent of BRIC (Brazil, Russia, India, andChina) businesses cite this as an outsourcing driver, compared with 39percent in the G7, and 45 percent cite mitigating risk through usingspecialists versus 35 percent in the G7.
Anh said: "The resultsclearly show that outsourcing is worthy of serious consideration. Asidefrom driving efficiencies and reducing costs, outsourcing can allowbusiness to tap into skills and expertise offered by their providersthat might not necessarily be as readily available in the local labourmarket".-VNA
The International Business Report, based oninterviews conducted last November with more than 3,300 CEOs, managingdirectors, chairpersons, and other senior executives from all industry,reveals that only 12 percent of businesses in Vietnam are open tooutsourcing.
"The effectiveness and cost saving of outsourcingare not realised by many Vietnamese companies, and so the serviceproviders need to increase access to these companies, a potentialmarket," Trinh Thi Tuyet Anh, director of outsourcing at Grant ThorntonVietnam, told Vietnam News – the national English language dailypublished by Vietnam Nam News Agency.
In certain cases, enterprises think they could lose control over critical business processes if they outsource, she said.
"Forsmall- and medium-sized enterprises in Vietnam, the cost ofprofessional outsourcing services will be a considerable expense," sheadded as a reason for the unwillingness of Vietnamese firms.
Globallytoo the majority of business leaders have no plans to outsource anybusiness processes in the near future. While the cost savings andprocess efficiencies that outsourcing can provide are widely recognised,many business leaders are worried about losing control of keyprocesses.
Sixty percent of global businesses have no immediateplans to outsource a business process. Outsourcing is least prevalent inSoutheast Asia (26 percent), Eastern Europe (31 percent), and theNordic countries (33 percent).
By contrast, more than half ofbusinesses in southern Europe (64 percent) and Latin America (51percent) either currently outsource or plan to.
Trinh Thi TuyetAnh, director of outsourcing at Grant Thornton Vietnam, said:"Outsourcing is a helpful tool in restructuring manpower; freeingresources from administration, and re-allocating them to operations.
"Accordingly,the enterprise can benefit from lower payroll costs without sacrificingoutput capacity. Senior leaders of these lean, dynamic organisationsalso have more time to focus on the strategic priorities for theirbusiness."
Among those businesses which currently (or plan to)outsource back-office services, 57 percent globally cited improvingefficiencies - marginally ahead of reducing cost (55 percent) - as thekey drivers. In Asia - Pacific, both figures are 37 percent.
Ofthose businesses with no plans to outsource, the requirements to findcost savings (41 percent) and process efficiencies (33 percent) are themain reasons that would encourage them to consider it.
Businessleaders in the developing economies are more likely to use outsourcingto access expertise: 46 percent of BRIC (Brazil, Russia, India, andChina) businesses cite this as an outsourcing driver, compared with 39percent in the G7, and 45 percent cite mitigating risk through usingspecialists versus 35 percent in the G7.
Anh said: "The resultsclearly show that outsourcing is worthy of serious consideration. Asidefrom driving efficiencies and reducing costs, outsourcing can allowbusiness to tap into skills and expertise offered by their providersthat might not necessarily be as readily available in the local labourmarket".-VNA
