[E-Magazine] Billion Dollar Vietnamese Company on the "Big Sea"

Then the “dot-com bubble” bursted, and the software export dream temporarily ended after both offices in India and the US closed in 2002. Of course, FPT leaders could not be romantic without any financial support. At that time, the company decided to invest 1 million USD in software export in 1999, FPT’s capital of the previous year was only 1 million USD.

The expected capital source for software delivery came from a bank loan. During the period of “paying tuition” of 600,000 USD to enter the Indian and American markets, FSOFT’s team on the one hand built our own process and quality management department, on the other hand invested in improving qualifications, team skills to achieve CMM level 4. This is a set of 5-level standards, measuring maturity for software companies, founded by Carnegie Mellon University. In 2002, FSOFT was on the list of 120 software companies globally to achieve CMM level 4 certification.

Also at the end of 2022, the contract with the first multinational customer – Unilever helped FSOFT achieve the annual sales target and become profitable. Previously, losses made some of FPT’s top leaders consider closing FSOFT.

“The meeting of fortune” is Mr. Truong Gia Binh’s recollection of the meeting between FSOFT and senior leaders of Japan’s Sumitomo Corporation, opening up opportunities for the company to set foot on Japanese land, which continued writing the dream of reaching globally. Another piece of luck was that an overseas Vietnamese helped connect FSOFT with Harvey Nash, a world-famous IT human resources supplier. In fact, all luck is lost if we cannot grasp it. FSOFT’s team, on the one hand, maintained romantic aspirations, on the other hand, still focuses on the practical concerns.

For example, almost the entire company spent the year of 1999 learning English, or studying for exams to get top professional certifications in technology. Or if there were only 2 people who knew Japanese, FSOFT dared to take on projects in Japanese and kept recruiting talents and training non-stop. FPT/FSOFT’s senior leaders such as Mr. Truong Gia Binh, Mr. Nguyen Thanh Nam, Mr. Pham Minh Tuan and later Mdm. Chu Thi Thanh Ha also set an example by rushing to learn Japanese.

Looking back to 2002, the Japanese Government had a policy of choosing countries other than China to minimize geo-economic risks. One year after this policy was issued, Hitachi Software needed to expand their software development partners abroad to reduce costs. Hitachi’s General Director at that time, Ogawa Takeo, asked Mr. Truong Gia Binh to open a software development center for Hitachi in Hanoi. Such relationships were the money for FPT Japan to launch in 2005. Working with customers in “difficult” markets like Japan has honed special skills for FSOFTers.

FPT Japan grew at a rate of over 70% in the period from 2005 to 2008. Along with the success in revenue in the Japanese market, FSOFT expanded the market, present in France, Australia, Singapore and Malaysia. In 2008, the company decided to return to the United States. “Capital” in FSOFT’s hands at this time is not only romantic dreams but also sales of 40 million USD/year and an experienced team operating in many international markets. FSOFT in particular, as well as FPT Corporation in general, are also much more diverse, since FPT Corporation was listed in 2007.

In 2014, FSOFT was the first software service exporter in Vietnam to reach the revenue milestone of 100 million USD with more than 5,000 employees, present in 8 countries and territories around the world. This is also the first time the company’s Board of Directors thought about the next romantic dream – revenue of 1 billion USD. And after 10 years, FSOFT’s revenue grew 10 times, despite the economic crisis and the Covid-19 pandemic…

“Once you’ve reached billion-dollar revenue, what’s the next goal? Five years ago, we set the goal of ‘World Class, Billion Dollar Company’. The first part has been achieved and the second part we are continuing to strive for. The numbers will eventually become outdated and the journey to world class truly creates emotions for FSOFT people”, FSOFT CEO shared with employees at the CxO Talk 2024.

However, to reach “World Class”, FSOFT needs to conquer many milestones. For instance, the company needs to achieve the revenue target of 5 billion USD by 2030 and the 5 GIGA target series – Billion-dollar market, Billion-dollar specialties, Billion-dollar contracts, Billion-dollar customers, Billion-dollar profits. Surely these are also the next romantic dreams of FSOFers.

In 2023, FSOFT achieved sales of 1.008 billion USD, productivity of 39,000 USD/person/year, approaching India’s leading IT service companies (Tier 1). Productivity at offshore also increased significantly compared to the previous year, reaching 34,000 USD/person/year.

From a human resources perspective, FSOFT Chairwoman Chu Thi Thanh Ha said that the human development strategy has made FSOFT successful. And this strategy is synthesized in the “FSOFT People Pyramid” with the foundation of development being One Team – Learning – Happy Environment (3 bottom edges) and the strategy for development is Technology/Creativity – Domain Expertise – Culture/Diversity (3 sides).

In terms of strategy, according to FSOFT CEO Pham Minh Tuan, there are key-drivers that have guided for FSOFTer. The first is a balanced development method, not dependent on just one market. In recent years, FSOFT has always aimed to develop balance in the markets: Japan – America – APAC. In 2023, the Japanese market regains the number 1 position and contributes 38% to FSOFT’s sales, the US ranks 2nd with 29% of sales, APAC (Korea, Singapore, Malaysia, Hong Kong, Vietnam…) is about 25% and the EU contributes about 6%. “The holy-trinity position helps the company maintain a growth rate of 20-25%, in the context of the industry’s leading businesses slowing down, due to their dependence on the Western market,” Mr. Tuan said.

Secondly, FSOFT focuses on developing large customers. 6 years ago, the average revenue of a contract was about 45,000 USD and last year it was 500,000 USD, an increase of 10 times. This brings both stability and challenge, as well as many career development opportunities for FSOFT’s more than 30,000 employees. 80% of FSOFT’s revenue comes from million-dollar customers. The next step when FSOFT sets goals of 5B (Revenue of 5 billion USD by 2030) and 5 GIGA (Billion USD Market, Billion Dollar Specialties, Billion Dollar Contracts, Billion USD Customers, Billion USD Profit) , FSOFTers will continue to “level up” with the goal of average deal size reaching 1 million USD.

The third key-driver is Diversity. Not only are Vietnamese contributing and dedicating to FSOFT, but currently the company has more than 3,000 international experts who are joining hands with FSOFT to deploy and implement large projects. The Board of Directors sets a goal that in the next 3 years, the number of foreigners will reach 20%. The company’s culture is about respecting individuals – “Let employees be themselves” and create bonds –– “‘If you want to work together, you must be able to hang out together.”

The fourth driver is the rotation policy. Rotating key personnel is necessary to build a dynamic leadership system and quickly adapt to new situations. During the rotation process, key employees will experience many different positions and working environments to get rid of stagnant and rudimentary thinking to become more brave, creative and ready to conquer new challenges.

“In the past 6 years, FSOFT has implemented this policy very actively. The results show that more than 90% of rotating managers have brought new energy, new vitality and new success to the organization. It can be said to successful cases such as Mr. Tran Van Dung, Mr. Doan Phu Tai, Mr. Ha Minh Tuan… Many positions have really brought quick results and outstanding differences after only 1 or 2 years. Next time you are selected for rotation, believe that you will be in the 90% success group and continue to help FSOFT fly high,” Mr. Tuan shared.

Fifthly, the biggest difference of FSOFT right from the establishment is that “FSOFTers always desire to bring Vietnamese intellectual values abroad, desire to make Vietnam successful, desire to develop on a global scale”.

Mr. Tuan said that international experts who have joined FSOFT all said that the desire and fighting spirit of FSOFT people does not only stop at the leadership, but also spreads to each employee, from salespeople to project members and the supporters. He shared a conclusion after 35 years of FPT’s development: “FPT’s formula for success is that leaders always dream big, while members blindly follow the leaders, as long as they keep going, there will be a way”.

With a team in nearly 30 countries, the company constantly sets challenging goals to reach out globally, while “creating adrenaline” to stimulate everyone to always go above and beyond. “Only growth can maintain aspirations and retain talented people in the organization,” Mr. Tuan concluded.

To achieve continuous growth for the company, each individual needs to be a strong link, each unit needs to be a strong train car. Therefore, Mdm. Ha hopes that FSOFTers will continue to promote the spirit of One Team and Learning to bring themselves and FSOFT “LEVEL UP”. “In 2024, each unit and each individual, in addition to committing to the annual KPI/OKR goals, should set themselves a challenge that initially seems difficult to achieve, then join forces and do your best to conquer it and reach the World-Class level,” Mdm. Ha said.

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