The scramble for talent and resources triggered by the virtual environment has thrown the world of global sourcing on its head. Our new HFS Pulse study covering 800 Global 2000 Enterprises clearly shows us enterprise leaders are evaluating all options (offshore, nearshore, onshore, WFH, crowdsourcing). Simply put, the need for tech talent and niche specialization is at an all-time high and we need more options available than merely the traditional vehicles:
Dr. Truong Gia Binh, Chairman of FPT Corporation, has a vision to bring Vietnamese capabilities to serve the world and make Vietnam one of its premier AI hubs. FPT has charted its roadmap to enter the Global Top 50 digital transformation provider list in the coming decade – the key drivers to this being FPT’s experience across multiple sectors, its focus on emerging technologies, a whopping 76% demand for digital transformation within Vietnam as a result of COVID-19, and a young population that excels with numbers. FPT formally launched its transformation consulting practice FPT Digital in February and raised its overseas transformation revenue targets by 50% for 2021.
Here are 5 key highlights about FPT you need to know:
- FPT’s desire to be at the top of the game
In the initial years, FPT started off by democratizing Office Computer Skills across all backbone sectors of Vietnam. FPT’s global presence now covers 26 countries around the world, with the goal of becoming one of the Global Top 50 digital transformation providers within the next ten years.
- Vietnam: An Aspiring Digital Nation
Vietnam is a young nation, and FPT desires to make Vietnam an AI hub of the world and bring Vietnamese quantitative capabilities to the world through implementations of Digital Transformation. Through encouraging support of the government, he is hopeful that the digital economy will contribute to 30% of the overall in the next 10 years.
- COVID-19 as a catalyst for digital transformation
Vietnam has been highly resilient during the COVID-19 pandemic, and technology has played a key role. Vietnam’s Government adopted innovative digital tools for contact tracing and disseminating information.
To respond to the COVID challenge, FPT transformed internally and changed the approach towards customer delivery. They became a comprehensive digital transformation partner of various industry leaders, enhanced their consulting capabilities through acquisitions, and set up new delivery centers in 2020 to expedite the new approach.
- Emerging Technologies and Made-in-Vietnam Software
FPT plans to bring its synergy of methodology and industry experience to the world. In the first 3 industrial revolutions, Dr. Binh notes they were busy fighting for survival whereas today, as the world embraces Industry 4.0, Vietnam has the opportunity to join the race from the same starting point – just as any leading country in the world. A lot of enterprises in Vietnam do not have legacy technology and are hence making a start directly in digital.
- The Rise of Digital Platforms
The world post-COVID-19 will look very different, and Dr. Binh believes a platform economy is on the rise. Most business leaders in Vietnam have planned for digital transformation, which is an indicator of huge market potential for FPT and digital platforms such as FPT.AI.
To go deeper, we invite you to dive into the full details of the discussion between FPT’s Chairman, Dr. Truong Gia Binh, and Phil Fersht.
FPT’s desire to be at the top of the game
Phil Fersht, CEO and Chief Analyst, HFS Research: Dr Binh, tell us a more about yourself and how you came to be Chairman of Vietnam’s premier IT service provider? Was this what you had always planned when you were starting out with your career?
Dr Trương Gia Bình, Chairman, FPT Corporation: Starting a business was not in my initial plan, Phil. In the late 1970s, the wars left Vietnam as one of the poorest countries in the world, with GDP per capita less than $100. Food was not sufficient to feed the population.
As a research fellow in Russia at the time, I noticed that Vietnamese people were often looked down upon. So I gave up pursuing my research career and joined 12 fellow scientists to found FPT. My strongest desire at that time was to get out of poverty, and entrepreneurship was the way.
Phil: How did FPT become a leader in the market?
Dr Bình: In the first 10 years, FPT democratized Office Computer Skills across all backbone sectors of the economy.
In the following 20 years, we decided to go global. Our strategy was to stand on the shoulders of giants. We partnered with global disruptors such as Microsoft, IBM, Siemens, and so on, and today, more than 100 of our customers are in the Global Fortune 500.
“Our strategy was to stand on the shoulders of giants.”
From easy projects worth $1,500 USD a month, we’re now charging up to $40,000 a month for complex projects that involve digital transformation (DX) consulting. FPT has entered the world’s most demanding markets: Japan, US, Europe. Today our global presence covers 26 countries around the world. But we won’t stop. Our next big goal is to become the Global Top 50 digital transformation provider within ten years.
Vietnam: An Aspiring Digital Nation
Phil: Can you share with us some insight into the business environment in Vietnam these days?
Dr. Binh: During the time FPT was set up, Vietnam changed to the policy named “Doi Moi”, which is a kind of market economy. And for the last 35 years, Vietnam grew by 7% annually. Vietnam is quite a young nation, with an average age of about 27 years, and every year we have 1 million more people in the labor resources. Vietnamese are very strong with numbers, and that is why we are trying to leverage the love of logic, love of math, and now it is Artificial Intelligence.
For the last 20 years, my dream is that Vietnamese intelligence should serve the world, and now I have another big dream that Vietnam should be kind of an AI hub of the world. We operate with the Mila AI Institute, and we are sending the PhD students there. We are developing our capabilities in new technologies like cloud, IoT, big data, robotics, etc.
Vietnam has decided to catch up with the world in the Fourth Industrial Revolution, and therefore digital transformation is the focus area for us. The government requests that every ministry and every province must have a program for digital transformation.
“The digital economy will contribute to 30% of the overall economy in next 10 years. They also plan 1.5 million of youth to be the resources for digital development. Although this is a challenge, it has been so far so good.”
The digital economy will contribute to 30% of the overall economy in the next 10 years. They also plan 1.5 million of youth to be the resources for digital development. Although this is a challenge, it has been so far so good.
Phil: How had things developed in Vietnam in recent years, especially prior to the COVID era?
Dr. Binh: We had grown at around 6 to 7% between 2016 and 2019. Last year, despite being affected by COVID-19, Vietnam still posted positive GDP growth of 2.8%. High tech exports were higher than competitive regional peers in APAC (60 B USD) in 2019 (World Bank, WEF 2019)
Phil: When compared with other countries, in which areas do Vietnam lead, and where do you see the country needs to develop further?
Dr. Binh: Vietnam is a rising digital nation. Vietnam’s digital economy is the second-fastest-growing market in Southeast Asia, according to a recent report by Google, Temasek, and the US-based global management consultancy Bain. However, the challenge is in shortage of digital workforce: we need an additional 190,000 IT engineers by the end of 2021. However, FPT is very optimistic and looking to become one of the leading companies in DX consultancy, bring Vietnam to the same level as technology giants.
Phil: Do you believe there is a pivotal role for the government to play?
Dr. Binh: The Government has shown its commitment to reinventing the country. An example of it is the National Program for Digital Transformation, which involves targeting the following by 2030:
- Digital economy to account for 30% of GDP
- Universalize Fiber and 5G cables
- 100,000 digital businesses
- Digital workforce of 1.5 million people
COVID-19 as a catalyst for digital transformation
Phil: How has Vietnam coped with the Covid era, Dr Binh? How has this impacted the provision of services to clients? Have you seen business struggle during this period?
Dr. Binh: Vietnam has been one of the few highly resilient countries during the Covid-19 pandemic. It is the only economy in ASEAN that is able to hold onto a positive growth rate in 2020 (+2.8%).
“Vietnam has been one of the few highly resilient countries during the Covid-19 pandemic. It is the only economy in ASEAN that is able to hold onto a positive growth rate in 2020 (+2.8%).”
Technology played a key role in Vietnam’s COVID-19 success, besides bold and early measures such as targeted testing and tracking. Vietnam’s Government adopted innovative digital tools such as the contact tracing app BlueZone and an e-Government portal to disseminate information. E-government portal saw a 300% increase in traffic during the height of COVID-19 in Vietnam.
Phil: How did FPT bring about this change?
Dr. Binh: FPT enhanced its consulting capabilities through 90% acquisitions in US consulting firm Intellinet. Our global workforce is working round the clock. In 2020, we set up new delivery centers in India, Costa Rica, Middle East, and Canada, and we have a highly competitive pricing model which helps customers save 50% costs.
|Data facts on how FPT responded to the COVID challenge: Transforming FPTActivated “wartime” mode.Focused on improved productivity with 685 digital initiatives, maintaining double-digit growth in 2020.Transforming FPT’s customersUS-leading automotive service firm with a customer base in 100+ countries.FPT beat against 193 other vendors including Infosys, Tata, IBM, to become their Champion partnerWe are their first choice in key projects worth 150 million dollars in total.For example, during COVID-19, customer vehicle wholesale was affected. Fewer shoppers due to social distancing. Revenue down 90%.Within 2 months, FPT upgraded its online bidding platform to give vehicle shoppers a full sight and sound experience with a 360-degree view and engine vibrations. Helped customer recover wholesale revenue.It was just one of three deals worth more than 100 million dollars each (US, JP, Malaysia) that FPT won in 2020.Helping VietnamBecame comprehensive digital transformation partner of industry leaders in telco, real estate, aviation, fishery, power, manufacturing, etc.Explored their pain-points and shared the best practices acquired from 30+years of experiences in IT services|
Emerging Technologies and Made-in-Vietnam Software
Phil: What makes FPT uniquely different from other global business and technology service providers, and can you see the firm challenging the traditional service providers in the Fortune 1000? Or do you see a different set of emerging clients for the firm?
Dr. Binh: Over the past 3 years, FPT has focused on core technologies that are driving digital transformation such as AI, Big Data, Blockchain, RPA, IoT, etc. We’re on track to build a comprehensive ecosystem of world-class software to transform businesses around the world.
FPT is highly focused on new technology and on digital transformation. We have a methodology named FPT Digital Kaizen™. The ex-CIO of Dupont, Mr Phuong Tram, has developed this methodology together with FPT, based on the practice Dupont did for the last ten years very successfully. At the same time, we are developing new technologies, new products, digital products, to accelerate the process of digital transformation.
I think, so far, FPT, besides being the champion on competitive pricing, we are also trying to differentiate ourselves in new technologies, experience, and digital tools. An example of this is the akaBot, an RPA solution that automates repetitive back-office tasks. In 2020, we deployed 75 virtual bots for TPBank, helping the bank save workload for 45 employees. This year, we’re planning to double the scale, expecting to help the customer improve productivity by 20-30%. akaBot has served 40 businesses in 8 countries, automating 250+ processes/tasks in business operations and freeing thousands of employees for more creative and valuable tasks. In the last 3 years, akaBot’s revenue has increased 50 times, helping businesses save 90% processing time, 60% operational costs.
The Rise of Digital Platforms
Phil: As we slowly move out of the pandemic, do you see the world returning to the way things were, or do you envision the business landscape being different? And how will this impact the role of the IT services provider?
Dr. Binh: The post-COVID-19 world will look very different. Virtual and reality will become one. E-commerce, e-Government, digital businesses, and cash-less, contact-less, touch-less transactions are booming. There is going to be a rise of the platform economy.
“The post-COVID-19 world will look very different. Virtual and reality will become one. … There is going to be a rise of the platform economy.”
In Vietnam, 76% of business leaders have planned digital transformation as a result of COVID-19 which indicates a huge market potential for us.
Phil: With all that you are doing, can you close with some insight into your leadership influences?
Dr. Binh: I really admire Jack Welch, former Chairman, and CEO of General Electric. He insisted that GE must become a “No.1” company in its field, or get out. FPT also has big dreams. We wanted to put Vietnam in the world’s digital map. And we want to be on top of the game.
Phil: Thanks for the time, Dr. Binh, and fascinating to get your insights on the Vietnamese potential in the emerging new services environment.