vietnam software development outsourcing
Explore The Turning Point Of China’s Software Outsourcing Industry
June 18, 2009, Dalian, soft cross-seventh session, chairman of McKinsey Greater China, Europe and Gordon Brown to make such a conclusion: China’s software outsourcing can be achieved by the current financial crisis, the reverse-type growth, one of the Jiao-Jiao by chance among the world’s leader.
June 20, in the software outsourcing trends in the discussion, the McKinsey Global Director Peng aims only at boosting the EU Gordon Brown’s words to extract the three meanings: the financial crisis, other sectors in a recession, but the IT / BPO (Business Process outsourcing) industry growth; other countries in recession, but China and other emerging markets growth; other traditional software outsourcing in a recession, but the new business model of outsourcing on the rise.
State Assistant Minister of Commerce Wang Chao at the soft opening of the fair revealed a few figures appear to confirm the McKinsey judgments. From January to May of this year, according to the latest statistics caliber, China’s software exports amounted to 2.53 billion U.S. dollars agreement (excluding embedded software), an increase of 21.6%; to undertake service outsourcing agreement amounting to 2.59 billion U.S. dollars, up 25.9%; while in 2008 China received, including ITO (information technology outsourcing) and BPO services, including outsourcing agreements amounting to 3.81 billion U.S. dollars, an increase of 1.6 times.
”China and other emerging markets in economic downturn will be the cost of arbitrage can be accelerated through human development.” McKinsey think. In addition, although policy changes by the United States and Europe, the local real estate cost reduction and near-shore to reduce human capital factors such as stimulation, Central America and Eastern Europe and other places near-shore outsourcing of financial institutions in Europe and the United States to increase the attractiveness of business process outsourcing, but the McCann-Erickson Xi said China, India and other offshore labor arbitrage opportunity is much higher than near-shore (70% vs. 30%), plus accumulated experience and India’s outsourcing and human resource base has been relatively well, near-shore outsourcing is not the formation of a big threat.
Blue Ocean “in package” to promote catch-up
Compared with India, China’s outsourcing software companies there is another killer – not yet started the huge domestic demand. According to McKinsey, in 2008, China’s total IT services spending ratio of GDP, only 0.2%, while India’s is 0.5%, South Korea 1.3%, Japan 1.8%, close to 2% of the United States, the United Kingdom and even up to 3 %, China is far lower than other countries.
Low ratio means that a huge room for growth, once the market started, will bring a huge amount of business.” Peng aims only at boosting that the country has seen the value of software outsourcing and software development outsourcing industry is determined potential. Peng suggested that countries can systematically introduce and implement the four support plans (growth engine program, domestic demand and the release of plans, project planning and leading large outsourcing enterprise support plan), outsourcing prospects will be very bright.
”Outsourcing” on the road with a few threshold
Although promising, but the domestic software outsourcing is still an urgent need to resolve several of weakness.
First of all, market share and growth rate, China still lags far behind India.
Value of the global offshore outsourcing in 2007 reached 60 billion U.S. dollars, while China accounted for only less than 10% of the share; China’s four top IT software outsourcing services vendors in the past three years, a growth rate of 21%, although the speed is not slower However, the company’s annual growth rate of India’s top four manufacturers in China are twice the size in 2007 is to achieve 14 times the Chinese manufacturers.
China’s software outsourcing industry remains highly fragmented pattern was the lack of firm size with the world’s top comparable to large-scale enterprises, but also yet to emerge a service outsourcing revenues over one billion U.S. dollars in domestic enterprises, which led our country can not effectively access to large-scale outsourcing and integration projects .
This situation also resulted in a lack of the value of China’s position and attractive enough. KPMG partner Wu Jianlin told reporters that KPMG had 150 multinational companies CEO conducted a questionnaire survey, most can easily say 10 outsourcing cities in India, but most people only Nengjiang Chu Beijing, China and Shanghai; If India is to promote business development personnel effect 100, China’s commercial development and extension of results to achieve an average of only 50, “China’s lack of outsourcing cities and the entire industry as a whole package, the lack of success story driven.”
At the same time, peripheral and other emerging countries in the service outsourcing on the rise of outsourcing to China has also formed no small challenge, such as: the Philippines, Malaysia, Vietnam, Indonesia and Egypt continue to increase the service outsourcing support to the governments of these countries one after another issued a vigorous policy support. Researcher, according to McKinsey outsourcing Egypt, Egypt has “in 2017 to become one of the world’s top five offshore outsourcing destinations,” As a government goal.
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