Michael McCourt of the China-Britain Business Council in
Shanghai describes the opportunities for UK IT companies in China
in reaction to aComputer Weekly articles about IT offshoring in
China.
Chinese companies such as Neusoft, UFIDA, Seioglobal, VanceInfo
and Wicresoft are developing and learning extremely quickly. Issues
that were real perhaps only three or four years ago either have
been or are being addressed - eg, it was often said that Chinese
ITO vendors had extremely good technical talent but lacked good
project management skills. Given that the Chinese
software/outsourcing industry was really only formed in the
mid-1990s, this was perhaps understandable, but the main players in
this market are getting it right by watching and learning from the
foreign competition in the market.
I would say, however, there are opportunities for UK vendors who
want to enter the Chinese market in partnership form either in
ITO/BPO or software. Many of the mid-sized software companies (400+
staff) have very good programming talent, good software engineers,
have experienced but variable quality in systems architects and a
lack of industry leadership particularly in international markets.
Looking at the UK software industry, our issues seem to be the
inverse. There are opportunities in bringing these two needs
together.
I have some issues with comments on physical environment,
communications infrastructure and language barriers. Yes, outside
of Shanghai good enough English language skills for any reasonably
large BPO operation are hard to come by.
For the ITO industry there is less requirement for fluent
English speakers in tech teams that are not customer facing - there
is already a large talent pool of tech staff with (fluent enough)
English language skills for tech teams in many of the second-tier
cities. For example, Dalian Software Park employs 25,000 in
software/ITO with 6,000 speaking fully fluent English (and an
additional 5,000+ speaking fluent Level 1 Japanese) where among
others Oracle has been successfully operating a technical support
centre for the US market.
When you consider university cities that are up and coming
outsourcing destinations, such as Nanjing or Wuhan - these cities
each have more than one million students on campus - and that every
student must take compulsory English language classes no matter
their academic major, the sheer scale of numbers will tell you that
the Chinese will get there, if not now, very soon.
In addition, organisations such as NIIT are already in China
with 170+ centres around the country preparing graduates on
language programmes for the outsourcing industries.
With regards to physical environment, please let's remember we
are not comparing China with the UK but with India. Sure, China is
still developing, but anyone who visits Shanghai/Beijing or any of
the second-tier outsourcing locations of Nanjing, Dalian, Chengdu
and Suzhou can't help but be impressed by the scale of
environmental development there. Much more so than India.
With regards to communications infrastructure, anyone who has
spent time working here in the industry will tell you the
infrastructure is excellent and far exceeds that of India for
reliability. When the Chinese government decides to target an
industry for growth, the first thing they do is make certain that
the infrastructure investment is in place - their recent stimulus
package of RMB4trillion was almost entirely spent on infrastructure
improvements (in its widest definition).
With regard to a lack of entrepreneurship and organisations only
being set up by government, I could name at least three dozen
Chinese ITO/BPO and several HR outsourcing companies that are both
privately-owned and successful in their own right. The size of
these companies would range from 350 to 14,000 staff.
I do agree with some of the issues about cultural barriers.
However, I tend to take a slightly different view. Many of the more
well-known ITO/BPO operators here already have international
contracts. However, for those smaller and emerging companies, the
most compelling issue is that many of the staff have never
experienced let alone visited a foreign country. It is extremely
difficult for the teams in these companies to have any
understanding of the required user experience (software).
In turn, I see business opportunities for the more
China-seasoned and industry experienced foreign companies here in
vendor management services operations that can bridge that gap and
oversee the technical development of ITO projects. The more
established companies know this and are putting the building blocks
in place now.
To me, the suggestion that China is five years or more behind
India is incorrect - that may be their status now, but they have
accelerated programmes in place - and that the gap will be bridged
within two to three years. Coincidentally, it is my own personal
experience that Indian service providers suffer the most in dealing
with cross-cultural differences in China, not the Europeans,
Americans, Japanese etc.