The Digital Office Solutions Market in Vietnam: Opportunities for Foreign Players

Digital office solutions are becoming increasingly popular in Vietnam as businesses look to streamline processes and find efficiencies. In this overview, we look at where there might be opportunities for foreign digital office services.

Digital transformation, particularly the adoption of digital office solutions, has become an irreversible trend in today’s business landscape. This trend is primarily driven by the need for increased efficiency, productivity, and streamlined operations.

However, in Vietnam, the market for digital office platforms is predominantly occupied by small-scale providers, with limited participation from major industry players.

That said, the Vietnam Association of Software and Information Technology Services (VINASA) says that a significant 40 percent of Vietnamese businesses have expressed an eagerness to adopt a dedicated business operating technology platform. These businesses acknowledge that such a platform serves as a powerful catalyst for both growth and economic advancement. Consequently, this situation presents a significant opportunity for foreign firms looking to enter the market.

For digital office solutions providers considering a market entry in Vietnam, here are some key points to keep in mind.

Industry overview

According to the Ministry of Information and Communications (MIC), the information and communications technology (ICT) industry generated approximately US$148 billion in revenue in 2022. This reflects 8.7 percent growth compared to 2021. More to the point, 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.

Considering the pace and requirements of Vietnam’s digital transformation, Fitch Solutions has projected that the country’s IT market, encompassing both hardware equipment and software solutions, will reach approximately VND 208 trillion in 2022 (US$8.8 billion) and VND 370 trillion (US$15 billion) by 2026. This projection suggests a compound annual growth rate (CAGR) of 15 percent. These numbers highlight the immense potential and favorable prospects within Vietnam’s IT sector.

Challenges

When it comes to supplying digital office solutions to Vietnamese businesses, foreign vendor firms should be aware of the below challenges.

Local firms need assistance choosing the right products

The inadequate identification of appropriate digital transformation goals and strategies often leads to firms engaging with the wrong software for their needs. This is a result of only 6.2 percent of businesses in Vietnam having successfully defined digital transformation objectives, with just 7.6 percent having developed comprehensive short and long-term digital transformation plans.

Foreign firms that wish to enter this market should make sure they have a way to clearly educate their prospective clients on what products they offer and how to use them. They should also be prepared to offer customized solutions that cater to the specific needs and requirements of the local market. This approach will not only help them establish a strong foothold in the industry but also enable them to gain a competitive advantage over their rivals.

Money can be an issue

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The Annual Report on Enterprise Digital Transformation 2022 released by the Ministry of Planning and Investment states that less than 40 percent of enterprises possess the necessary budget to fulfill the requirements of their digital transformation.

Conversely, a significant proportion, approximately 43.3 percent of enterprises, have an allocated investment budget for digital transformation, but it falls short of meeting their actual needs. Alarming as it may be, a staggering 20 percent of enterprises do not possess any budget whatsoever for digital transformation.

Indeed, the scarcity of financial resources for digital transformation is a widespread challenge faced by Vietnamese enterprises, particularly small and medium enterprises. This lack of investment can hinder their ability to compete in an increasingly digitized business landscape 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 firms.

Privacy may be a concern

Vietnamese employees often have well-placed concerns about using digital office solutions that can track their performance. Organizations may find it difficult to find the right balance between maintaining employee privacy and improving productivity.

To optimize data privacy and minimize potential risks, it is recommended to adopt a data collection approach that prioritizes minimalism, aiming to gather only essential information. Additionally, when feasible, implementing anonymization techniques can further enhance data protection. Furthermore, organizations should establish and uphold a transparent policy governing privacy and data collection, ensuring that stakeholders are fully aware of how their data is being handled.

Key opportunities

Accounting software

Accounting stands out as the field where the highest degree of digital transformation occurs, with over 40 percent of enterprises consistently utilizing digital accounting technology at an advanced level – as mentioned earlier, the majority of surveyed enterprises prioritize digital transformation in areas that directly impact their revenue and profitability.

Foreign firms that offer digital office solutions that include accounting software, may prove to be more popular than other options.

Logistics software

In the domain of vehicle management and goods transportation, a significant proportion of enterprises, amounting to more than 60 percent, employ digital software at a minimal level or rarely utilize it at all.

For foreign investors targeting this market to sell digital office platforms, this represents a significant opportunity. However, it is important to note that there may be challenges in terms of convincing these businesses of the benefits of digital software adoption with more well-established companies often less susceptible to change.

Warehousing and customer management

In addition, more than 40 percent of enterprises seldom employ digital software for warehouse management, order management, or customer management.

Only an estimated 40 percent of businesses in these sectors utilize digital technology extensively and regularly. This represents a significant opportunity for firms with technology that can assist in warehouse and customer management like customer retention management solutions or stock and inventory tracking software.

Regulations

One major concern with digital office apps is the potential for cyberattacks or data breaches. Vietnam takes these challenges seriously and has several laws governing cybersecurity and data management.

Law on Cyber Information Security

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To deal with this problem, the Law on Cyber Information Security outlines the regulations pertaining to cyberinformation security activities, as well as the rights and responsibilities of agencies, organizations, and individuals in safeguarding network information security.

It encompasses provisions on civil cryptography, standards, and technical regulations, as well as conducting business activities within the network information security domain, developing human resources for network information security, and state governance.

The primary focus of the Law on Cyber Information Security is to ensure three essential tenets of data protection: confidentiality, integrity, and availability. It aims to prevent forgery, exploitation of vulnerabilities, and the propagation 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 utilization 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 adhered to, ensuring data is only stored for the necessary processing period.

See also: Personal Data Protection in Vietnam: A Quick Guide

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 presents an exceptional opportunity for foreign investors seeking 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.

For support accessing Vietnam’s market for digital office software, contact the market entry experts at Dezan Shira and Associates.

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