In 1962, the first Sino-Indian war was fought over border dispulates in the Eastern Himalayan region. The next Sino-Indian war seems that it will be fought over a dramatically different turf, information Technology outsourcing. The world’s manufacturing superpower is China it is making a credible play for a share of the Information Technology outsourcing pie. The China’s well-oiled machine, once it makes up its mind about rolling out a policy is capable of doing so more effectively than most other governments.
Its communist past comes in handy, the China has created an education systems that is scaling well in the engineering disciplines. The United States graduates roughly 70,000 undergraduate engineers annually. The China graduates 600,000 and India 350,000. With an additional 300,000 Information Technology graduates through non-engineering programs is the India’s compensates in a higher education. The China is racing ahead producing engineering at a much faster pace than either the US or India. To cope as the India’s struggles with raging attrition and salary inflation challenges and a generally unstable, mercenary workforce.
In 1995, entrepreneur Chris Chen founded VanceInfo, it is headquartered in Beijing. The company has become one of a half-dozen companies leading China’s forays into software outsourcing. The Vance got its first breakthrough when the IBM gave the start-up a project to localize its OS2 operating system into Chinese. The contracts blossomed into a testing projects and then led to a development assignments with the 3,800 employees spread across Beijing, Shanghai and six other cities. A palo Alto, Calif-based banking middleware company is the TIBCO, which has an revenue of $570 million and it is run by an India-born chief executive. It is recently kicked out a major Indian outsourcer because it could not meet TIBCO’s offshore project staffing needs in a timely manner. The TIBCO subsequently also downsized its captive development center in India from 150 employees to 100. Both of the moves were compensated by Vance in China, whose TIBCO-specific operation grew from nothing 200.
Due to American multinational companies’ desire to diversity out of India the vance and a handful of other Chinese companies continuing to control costs. The US downturn has accelerated the process as companies are looking for alternatives to India’s rising costs. It is natural choice, particularly because of the most multinational corporations already have significant Chinese operation either in manufacturing or to reach the Chinese market. Vence has found it relatively easy to sell software testing, maintenance and research and development services to these operations without having to incur the larger cost of selling to the US headquarters. The company went public recently on the New York Exchange.
The Chinese companies are not the only ones building up resources in China. The Indian outsourcers, reeling under rising cost-structure and eroding profits. They are not committed to using Indian resourcers. The China can keep up all the major Indian outsourcers are looking at China as a strategic alternative. The Chinese workforce are eager to learn new things like business application development that is traditionally not a Chinese strength. The work ethic is sincere and motivated unlike the sense of entitlement that prevails among Indian engineers.
REFERENCE:
http://www.rediff.com/money/2008/apr/01bpo.htm
