Outsourcing industry, China VS India
May 21st, 2006
In terms of outsourcing industry, China is far behind India, but it is working hard. . . .
Xi'an, China western city, a spaciously separated room, a row of female workers who have rolled up the ponytail low, silently working, fingers quickly and orderly hit the keyboard. This is the scene that may appear in any plant in China. But in fact, they are not in the shoes or welding circuit board, but sitting in front of the computer may be a medical insurance policy from New York, the Detroit car loan application, or the Australian college student test paper. "This is the future supported by the global background," Michael Liu said. He is the founder of CompupaCific International, and after the United States has worked in the Ten years of IT repair service. He returned to China and decided to use the facts to prove that in the outsourcing industry, China can catch up with India. CompupaCific International is one of the few companies in China Business Process Outsourcing (BPO).
Xi'an - China's ancient capital, is not only the end of the new culture and new science concept from Central Asia, and therefore, it is still good to develop outsourcing services in this emerging city. Despite the way Xi'an's famous Murrricks, Qin Shi Hua, the Terracotss, but it is also one of China's modern city. Here is the birthplace of national space technology and the aerospace construction center. Here is one of China's largest science and technology park - covering an area of 35 square kilometers of "China Silicon Valley", including 7,500 companies, in addition, universities across the country each year to Xi'an Transfer more than 120,000 college students, half of which is computer scientific talents. And this is just the beginning. The Director of Xi'an High-tech Industry Development Zone said that the district will expand to 90 square kilometers and invest 100 billion yuan (about $ 12 billion).
In the project, a large pen is exposed to China's vitality: becoming a global software and service industry, to match it in manufacturing giant position. Attracting more outsourcing business is the core point. The world's most authoritative IT market research and consultation consulting company - US Gaodener said that the overseas IT service of Western companies will grow twice as of 2007, the global overseas market has reached 50 billion Dollar. Domestic Business Process Outsourcing (BPO) - From the document and credit card application to complete the operation of the entire human resources, the development pace is even faster, will reach 24 billion US dollars next year.
India undertakes most outsourcing services. Bill Lewis, founder of Singapore Tema Industrial Consulting, said China is one of the world's largest manufacturing countries, but only $ 2 billion in the outsourcing industry. Due to historical and geographical factors, most outsourcing business is in Dalian, China. In Dalian, many locals speak Japanese and Korean, so many Japanese and South Korea's background support companies are there. According to official data, Xi'an's annual outsourcing service income is only 300 million yuan (about $ 40 million), most of which comes from Japan.
But China has multi-part potential. Here, workers' computer foundation and mathematical knowledge are solid. Although they lack creativity, they are disciplined and have received good training, they can make this machine's work faster better than Indian workers. They are ideal for this kind of work in China Business Process Outsourcing (BPO). "These work is repetitive, regular, can train a military to complete." Sujay Chohan, Gaodene, USA, "Sujay Chohan, said," This is a job that does not require innovation. "
"Army" is a very divided word: this work takes millions of low-pay workers, and China is just. In the past, Indian human resources is low, now, Indian college graduates, engineers and programming designers have risen rapidly, and IT's personnel flow rate reached 30% to 40% per year. In China, each of the newly entry BPO staff is about $ 300 monthly, and it is 1/10 of the United States. It is getting more and more robbing. In January, SAP CEO Henning Kagermann warned India that its outsourcing business is high. SAP is one of the largest software companies in the world. In addition, although the price of China's coastal cities has also increased, the price of the mainland still has a competitive advantage. In addition to Xi'an, foreign-funded companies also focus on Chengdu and Wuhan, NEC Xi'an, president, Kaoru Miyata, said that in terms of venue rental and salary overhead, Xi'an is 40% to 50% lower than Beijing and Shanghai. Yasuo Noshiro, President of Xi'an Systems, Xi'an, said that Xi'an's price is lower than the rapid development of Dalian, and there are fewer hopping opportunities. The staff will be more faithful to the company. China's infrastructure is excellent, tax concessions (this, India is not inferior In China), the government has supported it. IBM, HP, Microsoft, Siemens and British have entered China for many years and is now busy adding staff. Japanese consumer electrical giants NEC has launched research and development work in Xi'an, and its opponent Fujitt has 120 employees in writing software programs.
The recent situation indicates that China is obviously a stationery that many Indian outsourcing service companies. Tata Consultancy Services - TCS has opened its own venues in Hangzhou. In the next few years, India's second largest software outsourcing company in Shanghai and Beijing has an extension plan, and their employees will develop from hundreds to 5,000 to 6,000 people. Former India's largest business process outsourcing (BPO) Group GenPact In Dalian's number of employees increased from 1800 people to more than 5,000 people, it increased three times.
Since overseas companies want to reduce costs, dispersion risks and support them in China's rapid development of local companies, China's outsourcing industry has grown rapidly. In addition, there is a small part of the business from China's domestic companies. For example, TCS is a new design and installation software system for Huaxia Bank (China 12th Bank). With China's state-owned company's growth in computer foundation and background support, this part of the business accounts for more and more. James Amachi, President of Japan IT Outsourcing Company, said that the growth rate of China's domestic market has exceeded his imagination. "We originally thought that there will be Chinese customers after two or three years, but now we have already launched a large domestic Telecommunications project. "
However, most observers say that China is going to catch up with India and need five to ten years. Because there are two major disadvantages. First, although many Chinese understand English, their speaking and writing skills are very bad. Therefore, the service department needs to remain frequently contacted with overseas divisions. In Xi'an Branch, Yingfeiling employs two full-time English teacher training employees. Michael Tiefenbacher said, "Unable to communicate between employees is too bad. People often confuse technical skills and language skills."
Theoretically correct, but not suitable for actual
In addition, China's engineers and computer professional graduates are very similar to their academic qualifications. Compared with European peers, they are more solid in the theoretical knowledge, but few people can apply them to such practical issues such as software development. "Just like, they know how to describe a steel saw, how to use it," Mr Amachi said, "But there is no concept for how to use it to do a door." In the recent software development talent recruitment Grapecity received an application for 1,200 students in Xi'an, in which only seven people were qualified. The lack of professional training, the lack of contact between business and academics is one of the reasons. In contrast, in Europe and India, the engineer's degree is required to have a work experience. In China, the university teacher is cultivated from the strict systematic-based system, they cannot lead the students to conduct realistic operations. One of the Wang Yingluo and China Institute of Engineering, Xi'an Jiaotong University said that "most of our people are not from the factory, no experience in the business world."
As a result, it is like some people say that China's foreign companies have to allocate huge money to "fund the improvement of China's education system." Mr Noshiro, Fujitsu, said that the company allocated $ 30,000, and sent Chinese employees to Japan Acceptance Intensive training. "Be a intermediate engineer, they need to receive a two-year training, become a project manager, take four years of training." Mr Amachi said, even after three years of training, "only 10-20% programmers It can achieve excellent levels and become designers. China has many universities and graduates, but there is not necessarily talent. "
China's infrastructure is also the same. After grapecity moved into Xi'an Science and Technology Park in heavy rain, it was found that the factory and computer were flooding.
China's scattered outsourcing service department does not work. In China, most outsourcing companies are less than 1,000 employees. For example, Compupaacific employment is less than 600 compared to India TCS 60,000 employees. However, small-scale companies may merge, the Pacific computer has been compared by local opponents - a joint venture. At the same time, India's local politicians have risen the risk of loss of influence. (Sometimes it is to prevent local companies from mergers from foreign companies), which is also one of the reasons for the US outsourcing company hoping to disseminate these outsourcing companies. Conversely, if the Indian National Trade Organization India Software Association (NASSCOM) can encourage companies to merge, it is of great benefit to the development of the industry.
At the same time, worry that the infringement of intellectual property - China is more embarrassing in India, and also inhibits the growth of outsourcing industries. China's foreign companies said that the immictions of complex IT treatment is not easy, and may be intercepted by relatively simple security settings, but due to the large risk of sensitive business information, the development speed is also delayed.
The above situation shows that now, China may increase in low-level BPO business, such as data processing, table processing, and software testing, and India will continue to dominate in high-end business, such as research and design. Innovation capabilities and proficient in English. However, due to more and more Western companies need China's support, China's domestic development opportunities will be increasing. And this is not just a pure competition between two countries: Last year, India's TCS and the Chinese government signed; Microsoft will establish the first large software company in China to provide IT services for the Olympics. (Blueiie is translated from Economist, 2006/5/4)
This article under China, society, scientific classification
