An interview with representatives from NashTech Japan: No longer an ordinary offshore company but a "one-team" approach along with securing excellent global IT talent

The DX report titled “The “2025 Digital Cliff”” released by the Ministry of Economy, Trade and Industry in 2018 highlighted the IT human resources shortage in Japan. Furthermore, the continuing depreciation of the yen, rising prices, and a shortage of foreign workers have added to the impact and pushed companies to the edge. As a result, the traditional offshore development aimed at reducing costs was no longer an optimal approach to guarantee excellent human resources and high quality.

Therefore, “one team” offshore development, which secures IT human resources globally and creates new added value, is attracting attention.

In this article, we interviewed Osamu Kamiya, Japan Country Manager of NashTech, a technology leader founded in 2000 and headquartered in the UK, and Kengo Itoh, Business Development Manager of NashTech Japan, about the new approach in offshore development that the company is pursuing.

In the software development industry where “70% of projects fail”, NashTech boasts a success rate of over 80%.

In Japan, there are still many clients who are reluctant to engage in offshore development. How do you feel about this situation?

Mr. Kamiya: In the past, offshore development, especially in Vietnam, was a place where people would “ask for some simple development work for a low price”. To be honest, I think there are still many such offshore development companies. In the light of that, there are many cases where the development project ends up failing, and it is not surprising that some clients may be reluctant to consider offshore development itself.

However, I can clearly say, “We are different”. I can say this with confidence.

Mr. Itoh: There is a solid basis for our differences.

It’s surprising that 70% of them failed. So not only offshore, but software development is that difficult.

Mr. Itoh: That’s right. In fact, it is very difficult to complete software development on schedule and on budget, but the survey highlighted that 83% of projects undertaken by NashTech were completed “on schedule” and “on budget,” which we believe is because of our strict global standard processes.

Indeed, it is an astounding success rate. Even though the industry-wide rate is 34%, or just over 30%, it seems like there are some players that have the success rate of 80% or higher. What is the other reason?

Mr. Itoh: According to the results based on our own surveys, about 70% of domestic software development companies and business companies that use some form of offshore development have chosen Vietnam as their offshore destination.

Although offshore development is available in various countries and regions such as India, China, Myanmar, Bangladesh, and Eastern Europe, Japanese companies are choosing Vietnam as their offshore development partner because of its national IT infrastructure, high quality, and availability of excellent human resources.

In this context, our NashTech Academy, a training programme for recruiting excellent talents, which will be described later, enables us to secure the top-notch human resources.

I see. If I were to describe your company, the first point is that you are a Japan-based branch of NashTech, a top-class IT services/software development company that boasts an astonishingly high project success rate of over 80% globally. Secondly, you are an offshore development company that is recognised by local IT staff for its cutting-edge technology and high quality.

Mr. Kamiya: Yes. On top of that, there is one more thing. I would like to add that we are no longer an offshore company.

We are the Japan subsidiary of NashTech, a global company headquartered in the UK with development centres in Hanoi, Ho Chi Minh City, and Da Nang in Vietnam. These three bases employ a total of 2,300 engineers, including more than 2,000 Vietnamese engineers alone, and with the acquisition of a Canadian company with a base in India in this fiscal year, we now have a total of 2,300 engineers. The average age of our engineers is around 30 years old, and we are always actively working to learn new technologies.

I mentioned earlier that NashTech’s project success rate is more than 80%, and we thoroughly manage our processes and projects. We implement quality control and quality assurance strategies and activities so that we can deliver the solutions to our clients “on schedule” and “on budget.

We achieved the highest level (Level 5) of CMMI (Capability Maturity Model Integration), which is a global standard that evaluates the level of process control in software development, and we are one of only five companies in Vietnam to have received a level 5 rating. Our clients have asked us for their needs of development, and we believe that they can leave it to us with peace of mind.

Mr. Itoh: We believe that thorough process management is directly linked to high quality control. According to the aforementioned report by an American research institute, the number of “difficult projects” at NashTech is about one-third less than the average for the entire industry, and moreover, the “cancellation” of projects in midway is less than 1%. While the industry as a whole has seen a 15% project cancellation rate, NashTech completed almost 100% of the development projects we undertake.

We completed almost 100% of the development projects we take on, and more than 80% of those projects are completed on schedule and on budget. I can understand why you say that you are no longer an “offshore” company.

Mr. Kamiya: This achievement comes from the fact that we have handled many challenging projects, such as large-scale end-to-end solutions for enterprises. We hope that clients in Japan will be able to experience these facts.

A new approach of global offshore development in which we become the IT development department of the client company and operate as “one team”

“No longer an ordinary offshore company”…. It seems that for clients in Japan, there are various benefits to work with you to develop a system or a software.

Mr. Kamiya: There are many factors, such as development costs, quality, delivery times, and the extremely low probability of project failure, but what we want to emphasise is that NashTech Japan can be considered as your IT development department. We would like you to think of NashTech Japan as “a development team within your company”, or in other words, “one team with us”, and not as “just another development company” to cut costs, just because we are offshore based in Vietnam.

The main reason why offshore development does not go well is because of the inability to communicate well with the bridge SE in Japanese. But in the first place, the system and process management methods that leave most of the success or failure to the bridge SE’s ability are wrong. We want to change that.

We will become the client’s IT development department, clarifying the roles of the project manager and SEs, and build a development system as a single team that is integrated with the customer. We will also be a virtual team utilising online environment, which is the norm by global standards. But by having the right team members in the right places depending on the skills of our PMs and SEs, we aim to create a new offshore model that is completely different from the offshore development that relies on bridge SEs, which was the case in the past.

The added value that NashTech brings to our client

It’s reassuring to know that that one team also includes excellent engineers who have reached CMMI Level 5.

Mr. Itoh: The needs and demands of clients in the Japan market are constantly changing. In recent years, I have the impression that the case where offshore development is considered as a “mere subcontractor” has been dispelled. Clients themselves are no longer satisfied with ordinary offshore development. They are seeking a one-team business partner, not a contractor or subcontractor.

We believe that we have many elements to meet such advanced needs, and our biggest selling points are, again, “quality” and “flexibility”. Firstly, we have three engineers who have been certified as MVPs by Microsoft, of only five in all of Vietnam. Our so-called SWAT (Special Weapon And Tactics) team, a star-studded group of engineers with expertise and knowledge in cutting-edge technology, under the direct supervision of the CTO, trains more than 2,000 engineers on a daily basis to improve the overall development quality.

In addition, NashTech’s Agile development method, the more flexible and client-involved development approach, allows the clients to participate in the project as one team, and enables us to actively communicate with the clients to ensure the success of the development project.

In the R&D area, we have a system called “NashTech Radar,” a unit that conducts research and development on cutting-edge trends. For example, generative AI such as ChatGPT has been researched and developed for service development even before it becomes popular in the market. We match the client’s needs with our capabilities, and the SWAT team will based on that to create a roadmap every three months to acquire and deliver a wide variety of new technologies and fill in the gaps if there is any.

So it’s not just an IT services/offshore development company with highly skilled employees.

Mr. Itoh: That’s right.

In 2023, Vietnam’s population reached 100 million. The age structure is very young, with about 70% of the population in their 30s, and the country has an abundance of young and enthusiastic IT human resources, nurtured by the national programme. In particular, a large number of computer science-related faculties at universities, technical colleges and vocational schools are fostering talented software engineers and programmers.

At NashTech’s development centres in Vietnam, English is the official language of the company, and language proficiency is one of the most important hiring criterias, with bilingual skills required for senior engineers and project managers and above. Some of our employees are able to fluently communicate and present to clients in Japanese.

The reason why NashTech always has a large number of highly skilled engineers is that despite the large number of applicants every year, regardless of whether they are new graduates or mid-career, we never lower the standards in recruiting new members. As a result, we only recruit those who have passed a rigorous selection process for technical and soft skills.

Not only that, we also focus on employee development using Nash Academy, our own engineer training and testing programme. All new hires are required to attend the Nash Academy so that while learning advanced technical skills, they are also equipped with a global standard business sense and can develop their careers while acquiring soft skills. We believe that our company is able to consistently attract excellent human resources because we have an environment that allows our employees to advance their careers while acquiring soft skills and technical skills.

We believe that the offshore support that NashTech provide will be critical in solving the IT human resource shortage that Japan is facing, as announced by the Ministry of Economy, Trade and Industry in its ““The 2025 Digital Cliff” ”.

We are confident that by becoming one team with NashTech, we will facilitate digital transformation and provide our clients competitive advantages in global competition. And instead of thinking of offshore development as a “subtraction” to achieve cost reduction, we aim to become the “addition” that brings added value to our clients. We are committed to supporting our clients in advancing their businesses.

Paradigm shift to new model: The challenge of improving efficiency and profitability by global standards to facilitate digital transformation throughout Japan

Could you tell us about some of the successful cases of becoming one team with NashTech Japan while utilising Vietnam development centres?

Mr. Kamiya: First of all, we have the case of Japox Corporation, which had a business challenge to expand its share of used car export sales. The company wanted to expand its sales channels overseas through its own eCommerce site, but in order to achieve this, it was essential to have a system development professional.

Since Japox has customers overseas, they chose NashTech Japan as the partner over other companies because we can communicate fluently in both English and Japanese. As a result, by utilising our expertise in cutting-edge technology, NashTech Japan was able to help Japox solve their management issues and develop their business. We launched a global eCommerce site in just 3 months since the project initiated.

Another example is EX Corporation, whose main business is the developing, selling, and implementating production management package systems for small and medium-sized manufacturing companies. EX had been providing packages that were running on-premises, but they were looking to move the system to the cloud, and that was when NashTech jumped in and helped them.

Since EX had no experience with Agile development, we incorporated NashTech’s strength in Agile (more than 90% of our work) into their system, and they were highly impressed and surprised by the success of the project. In the initial stages, there were some concerns about the regular communication and seemingly too flexible development methods of offshore development, but the project went smoothly and we were ultimately very satisfied with the high quality of service provided with a few bugs.

I believe that the reason why offshore development in Japan does not go well is due to the lack of solid documentation and the Japanese national character of being vague in the way they communicate. For the global standard offshore development that we are practicing in the UK, it is the new approach and structure that the Japanese IT software industry is aiming for. Cooperation between the Japanese side and the Vietnamese side is essential. NashTech Japan will work as one team to help our clients improve efficiency and ROI by utilising offshore development with global standard technology.

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An interview with representatives from NashTech Japan: No longer an ordinary offshore company but a "one-team" approach along with securing excellent global IT talent

In the software development industry where “70% of projects fail”, NashTech boasts a success rate of over 80%.

A new approach of global offshore development in which we become the IT development department of the client company and operate as “one team”

The added value that NashTech brings to our client

Paradigm shift to new model: The challenge of improving efficiency and profitability by global standards to facilitate digital transformation throughout Japan

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We help you understand your technology journey, navigate the complex world of data, digitise business process or provide a seamless user experience

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