Vietnamese still prefer foreign products
Most state agencies and state owned enterprises have been prioritizing foreign products when choosing solutions for their IT systems.
Dang Manh Pho, Deputy Director of the IT Center under the Bank for Investment and Development of Vietnam (BIDV), said the bank, like many other banks, has high demand for IT products and solutions to upgrade its operation. However, BIDV has to purchase foreign products, because it cannot find the domestic products which can satisfy the bank’s requirements.
Pho said that Vietnamese banks are undergoing the restructure process, where they need core banking, enterprise resource management (ERP) and customer relationship management (CRM) systems. However, domestic IT firms do not have any products or solutions to sell.
In 2011, when BIDV was assigned by the State Bank to support the merger of the three banks in the south, it had to brainstorm the solution to treat the IT systems of the three banks. The banks had five core banking systems, including three running and 2 half-finished, all were foreign products.
“The small Vietnamese market has been dominated by the world’s big firms. It’s because domestic enterprises cannot win the hearts of consumers in their home market,” Pho commented.
In fact, Vietnamese IT firms are capable enough to create high quality products. FPT, for example, has created SmartBak, a core baking product with high quality which has been sold to both domestic banks and foreign banks from Laos, Cambodia and Thailand. However, FPT, which ran out of patience, and has given up the work of developing the product. As a result, the companies which bought SmartBank, have to shift to use other systems, because they lack the support from the service provider.
The key problem lies in the fact that most of Vietnamese enterprises are small scale, which do not have the financial capability and human resource powerful enough to implement big scale projects.
Also according to Pho, even the enterprises considered the “big guys” in Vietnam, like Viettel, FPT or CMC, still cannot satisfy the banking system’s demand for IT app development. BIDV once contacted the firms to discuss about data center service, but it has found that the capability was too small in comparison with the demand.
“The demand for services is very high, because banks cannot do everything themselves. However, the services remain very poor,” Pho said.
State’s instructions ignored
The government has applied a lot of legal documents with preferential policies aiming to support the IT development in Vietnam. However, the policies still have not helped.
The problem is that many policies on offering preferences to IT firms have been ignored.
The Ministry of Information and Communication released the Circular No. 42 in 2009, showing the policy on using domestically made IT products for the state-funded projects or the projects with the state owned capital.
The circular stipulates that if domestic products have the quality equal or higher than foreign products of the same kinds, state-funded projects have to choose domestic products.
IT firms cherished the hope that with the new policy, they would be able to boost sales and increase the turnover by 10 times. BKIS had every reason to believe that its BKAV anti-virus, which has been recognized by international inspection companies as having high quality, would be the choice of domestic enterprises and agencies.
“However, most of the state agencies make light of the legal document,” said Nguyen Tu Quang, a senior executive of BKIS.