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KMS: Leading a Promising Vietnamese Outsourcing Company

Viet Hung with one of his teams. He’s pictured in the center. | photo via hca.org.vn

With the New York Times writing an article about KMS, one of Vietnam’s most promising software outsourcing companies in Vietnam focused on doing projects for small and large technology businesses, I felt I had to go talk to Mr. Viet Hung, KMS’s managing director here in Ho Chi Minh city. He has intimate insight into KMS’s company culture and what has made it the success that it is today.

In a country where Outsourcing is the mainstay of most of the biggest technology companies in Vietnam – with thousands employed with rivals like FPT Online and TMA Solutions and KMS has developed a strong reputation with just over 300 employees. Hung has been with the company since its inception and started alongside Vu Lam. Keen to learn about KMS’s origin story, I quickly realized that the real story was in the mentality of the leaders that built up the solid company and their vision of their company’s impact on Vietnam.

Viet Hung gives us his insights on KMS’s beginnings and culture:

How did KMS come into being?

VH: Before KMS, there were three of us, Vu Lam, myself and our friend Chung. We had worked together in another company and we became quick friends. We used to go swimming together every Saturday morning and chat about life. Originally, we wanted to create a company together but we decided to shelve that idea until later. We said, “Let’s keep our friendships first and business second.” Several years passed before KMS really came into being.

When the time was right, we had quit our previous jobs and were ready to start a new company. We weighed our options, looked at our strengths, and looked at the Vietnamese market. Our strength was outsourcing, we had grown up in that business but we were skeptical about a lot of the problems we had faced in the past in our previous experiences. To us, client attrition was always the biggest challenge in outsourcing business. The attrition can come from their business performance, economy crisis, bad quality of services from outsourcing vendor. Nevertheless, the outsourcing vendor would run into problem, if the percentage of client attrition is high.

But we looked closely at the technical skills in the market and realized that by securing outsourcing contracts that was one of the best ways to train engineers. Instead of creating new projects in a country that lack product managers, contracts with new companies with set goals would force engineers to learn and adapt. It’s a great way to build up the tech community. And with our experience, we could avoid all the pitfalls and obstacles in outsourcing.

How does your company choose new clients?

VH: When we look at clients we always try to assess their level of success. Will this project be successful in the long term or will it fail? We are looking for companies who want to build a long-term partnership with us. As we are not in business of headcount providing, we want to help excelling companies excel more. We make sure that our clients understand us well first. We also make sure that our clients do not take up more than 20 percent of our revenue, this way, if one client sneezes it will not damage the rest of the company. This allows us to internally manage our people well. These things help us deal with potential hardships that we have faced in the past.

What is the company culture at KMS?

VH: Well, since we started from friendship, we wanted to instill that camaraderie into our company. If you come to our offices, you’ll find that we’re a big family, and we hire with that in mind. We want people to come into our company who have the same mentality.

For example, when my HR head first asked me how much should our budget be for charity when we first started doing charity, I told him he should look into his heart and give how much he feels is right, because it is charity, it should come from the heart. The company will not pay for the charity. We have zero budget for this at this time. We want it to come from your own heart, from yourself. When you want to do charity, don’t do it near the city, find the remotest places where the money we can give will have a significant and meaningful impact. The beauty of this, is that our people always go out and do charity. They do it on their own, and we all go together. We fill up a whole bus of 50 people every time to go out to the provinces together to do charity. Today, we have a budget for charity but our employees still give from their own pockets.

This way of thinking impacts the company on every level. Since people are taught and grow in an environment that is friendly and familial, the work is much easier. With your friends, you’re not afraid to be honest because there is a level of trust. You’re willing to be critical and this makes all of the work much more smooth. Not very many companies have this level of trust and honesty in Vietnam because they have cultural barriers like status, losing face, and distance that make it hard for people to work in a way that is intimate and close.

Isn’t this intimate company culture that you are creating a problem in such a respect-oriented culture as Vietnam’s?

VH: We train all of our mid- and upper-level managers in six- to nine-month courses ourselves because we want them to see the principles we use in action. Once, one employee asked me at such an event, “Aren’t you afraid that we will lose respect for you if we are too intimate? Too close?” And the truth is, the reason why people respect me or not is because of the value that I bring to my employees and to my company. Values of honesty, integrity, learning and leadership. That is what is important to me, and I try to impress that upon my employees, when those values are gone then of course, they won’t respect me anymore. Sometimes when my employees and I go out to do charity or go out for parties, outsiders don’t know I’m the boss because we act as equals. This allows our employees to be absolutely candid with me, with their colleagues, and with their managers.

How exactly is KMS building up the technology community?

VH: In the last few years we have started a new project called QA Symphony, so we have moved some of our more experienced staff away from outsourcing and into this separate project. The goal here is to develop an enterprise-ready and notable piece of software that is “Made in Vietnam,” uplifting the Vietnamese brand. After all, when most people think of Vietnam, they think of the Vietnam War, so we want to put software among the notable things about Vietnam too. It takes quite some time to train and develop management and technical staff and it’s great that we have built them up to be able to take on this new company.

EDIT: Following clarification from Mr. Hung, we have added more detail and clarified key points concerning the name of their third founder, Chung (not Trung) and added more detail to the charity story.

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