SAP in Vietnam: Not Just the Next Tiger, But a Unique Dragon

SAP’s business in Vietnam is growing, spurred by more than just the country’s economic miracle. SAP Vietnam Managing Director Josephin Galla shares the secrets of her sales team’s success

Take a walk through the hustle and bustle in the streets of Hanoi, and you get the picture: This is a vibrant, high-energy place, where everything seems to be in motion. Vietnam’s capital city has approximately 8 million inhabitants and it feels as if they’re all out on an endless fleet of scooters, blaring their horns. Contradictions mesh in the hustle and bustle of the city. Tiny local shops nestle next to designer stores, women prepare street food while checking their smartphones, and high-rise buildings with trendy rooftop bars blend with French colonial architecture in the Old Quarter.

There’s a similar buzz at SAP Vietnam. Galla and her sales team, based in Hanoi and Ho Chi Minh City, achieved remarkable successes last year.

“We’re on a growth trajectory, particularly when it comes to our cloud business,” says Galla, who took charge of the subsidiary at the beginning of 2018.

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Vietnam Set for Global Expansion

Back in 1975, Vietnam was one of the world’s poorest nations. But the Doi Moi reforms of the mid-1980s ushered in political and economic renewal, and Vietnam now considers itself a socialist market economy.

According to the World Bank, this key player in the East Asian economic miracle has seen its gross domestic product grow year-on-year by between six and seven percent since 2015. Achieving 7.08 percent GDP growth in 2018, it even outperformed its mighty neighbor China. The Economist Intelligence Unit predicts that Vietnam will experience stable growth and continue to be one of the fastest-growing economies in the region between 2019 and 2023.

The domestic economy is hungry for more, according to Cuong Truong, an SAP account executive in Vietnam, who adds, “Vietnamese companies want to go global, and they need technology to compete in the world market. The government has recognized that private enterprise is the core engine of the economy and is putting policies in place to help it compete on the global stage. It’s a fantastic market for SAP to address.”

Vietnamese state-owned businesses tend to favor on-premise systems, partly because of stricter cybersecurity legislation that came into effect earlier this year. Nevertheless, SAP’s cloud business in Vietnam is soaring, especially in the private sector. “There’s a tremendous openness for new technologies here,” says Galla. “The market is not yet saturated, and we’re pretty much in a grassroots situation because there aren’t so many legacy systems to fight.”

Seventy percent of the approximately 450 SAP customers in Vietnam are midsize businesses, but SAP also serves large enterprises in key, high-value industries such as oil and gas, utilities, and telecommunications. Thomas Le, an industry value engineer at SAP, explains: “The government is pushing digital transformation and is particularly committed to Industry 4.0, so its investments in technology will increase.”

But SAP’s success in the Vietnamese market is not just down to the country’s economic growth.

Customers Expect More Than Software

“Vietnamese business culture is based on fundamental trust that you have to earn,” says Galla. “When we talk about success, we’re not just referring to our own numbers.”

SAP customer TH Group comprises 12 companies and employs more than 12,000 people in Vietnam and beyond. TH true MILK, part of TH Group and one of Vietnam’s largest milk producers, implemented SAP SuccessFactors solutions for human resources in 2018. With the help of SAP software, the company has been able to cut employee turnover in half in the space of three years. In the battle for talent in the Vietnamese market, retaining the best employees is crucial for TH true MILK.

The company now has more time to dedicate to the strategic development of its employees, says Galla. “And it didn’t happen because we were just trying to sell SAP SuccessFactors software. We really wanted the company to be successful, and every single member of our team was dedicated to that aim.”

The team’s efforts are not purely selfless, concedes Galla, but a true and honest relationship unlocks the door to a more informal level where you get to touch on more sensitive areas of the business.

“Vietnam is a small community,” agrees Mai Nguyen, head of Partner Business for SAP in Vietnam. “You have to be seen as a reliable partner and make your implementation project a success, otherwise the trust is gone.”

SAP CEO Visit Puts Vietnam on the Map

On his first official visit to Vietnam in September, Bill McDermott, CEO of SAP SE, met Prime Minister Nguyen Xuan Phuc, who reiterated his government’s intention of building a digital economy and smart industry.

McDermott’s visit was a very important signal to the market in Vietnam, says SAP sales manager Viet Nguyen. As a result, he explains, C-level executives at Vietnamese companies now have more confidence in the previously less well-known SAP brand.

Tiger and Dragon: How the Story Continues

“I’m fascinated by our customers’ willingness to move fast, to innovate, to make mistakes, and to get better,” says Galla. Together with her team, she has developed a growth plan based on three pillars: empower the SME segment, enable intelligent enterprises in Vietnam, and be the leading cloud company in Vietnam. The plan’s slogan is “Powering Digital Vietnam.”

“We will not just be the next tiger, we’ll probably be a very unique dragon,” predicts Galla.