Software Outsourcing Market
Undoubtedly India is one of the major providers in Software Outsourcing. The abundant skilled manpower has made India a target destination for multinationals to BPO, Software Outsourcing and other back end operations in India. India ranks high in areas such as qualifications, capabilities, quality of work, linguistic capabilities and work ethics, and thus is ahead of competitors such as China, Philippines, Ireland, Australia, Canada etc. Indian companies have unique capabilities and systems to set measure and monitor quality targets.
In specific Software Outsourcing and BPO categories, Indian centers have achieved higher productivity levels-for example, the number of transactions per hour for back office processing, than their Western counterparts. Also, India is able to offer a 24x7 services and reduction in turnaround times by leveraging time zone differences. India's unique geographic positioning makes this possible. Many state governments in India are offering incentives and infrastructure to set up Software Outsourcing, BPO and other IT enabled services. About 100,000 engineers graduate from India every year. Many of these engineers are employed with Software Outsourcing companies and call centers for troubleshooting and providing technical support at salaries that are dramatically lower compared to the pay scales in the US. The average monthly salary in India is $400-700 compared to $2,700-2,800 in the US.
Another most promising market is China. Japan has become a major market for China's Software Outsourcing firms, and a substantial part of China's USD 3.6 billion software outsourcing profit came from Japan, according to statistics from the Ministry of Information Industry (MII).
Approximately 10% of China's Software Outsourcing profits last year were generated by firms located in northern China's Liaoning Province, which is geographically near Japan, and most Software Outsourcing firms in the province are targeting the Japan market. In Beijing, Software Outsourcing revenue soared by 67.6% year on year to USD 13.319 million in the first two months of this year, accounting for one third of the country's total. Major business of the city's biggest software outsourcing firm, SinoCom, is also located in Japan.
The comparatively low technical requirements in software exported to Japan, similar culture backgrounds, and more willingness for technical disclosure by Japanese software firms to Chinese counterparts, are believed to be three major reasons behind the booming Software Outsourcing business to Japan, industry insiders were quoted by a southern China newspaper, Nanfang Dushi Bao, as saying. Western software firms are less willing to disclose technical secrets to Chinese counterparts.
Software Outsourcing firms are required to have the capability to develop total solutions and complete application systems if they want to enter the European and North American markets. In addition, they will have to meet the qualifications on management and maintenance capabilities as well as internationalized business and legal practices. But in China, the current market is dominated by numerous small Software Outsourcing firms, and few of them can meet these requirements.
The attractiveness of the Japanese market is also leading to a price competition among Chinese outsourcing firms. In a bid to get Japanese orders away from Dalian-based firms some firms located in western China's Lanzhou and Kunming even cut their prices below their cost to secure deals. (Source: Interfax)
In specific Software Outsourcing and BPO categories, Indian centers have achieved higher productivity levels-for example, the number of transactions per hour for back office processing, than their Western counterparts. Also, India is able to offer a 24x7 services and reduction in turnaround times by leveraging time zone differences. India's unique geographic positioning makes this possible. Many state governments in India are offering incentives and infrastructure to set up Software Outsourcing, BPO and other IT enabled services. About 100,000 engineers graduate from India every year. Many of these engineers are employed with Software Outsourcing companies and call centers for troubleshooting and providing technical support at salaries that are dramatically lower compared to the pay scales in the US. The average monthly salary in India is $400-700 compared to $2,700-2,800 in the US.
Another most promising market is China. Japan has become a major market for China's Software Outsourcing firms, and a substantial part of China's USD 3.6 billion software outsourcing profit came from Japan, according to statistics from the Ministry of Information Industry (MII).
Approximately 10% of China's Software Outsourcing profits last year were generated by firms located in northern China's Liaoning Province, which is geographically near Japan, and most Software Outsourcing firms in the province are targeting the Japan market. In Beijing, Software Outsourcing revenue soared by 67.6% year on year to USD 13.319 million in the first two months of this year, accounting for one third of the country's total. Major business of the city's biggest software outsourcing firm, SinoCom, is also located in Japan.
The comparatively low technical requirements in software exported to Japan, similar culture backgrounds, and more willingness for technical disclosure by Japanese software firms to Chinese counterparts, are believed to be three major reasons behind the booming Software Outsourcing business to Japan, industry insiders were quoted by a southern China newspaper, Nanfang Dushi Bao, as saying. Western software firms are less willing to disclose technical secrets to Chinese counterparts.
Software Outsourcing firms are required to have the capability to develop total solutions and complete application systems if they want to enter the European and North American markets. In addition, they will have to meet the qualifications on management and maintenance capabilities as well as internationalized business and legal practices. But in China, the current market is dominated by numerous small Software Outsourcing firms, and few of them can meet these requirements.
The attractiveness of the Japanese market is also leading to a price competition among Chinese outsourcing firms. In a bid to get Japanese orders away from Dalian-based firms some firms located in western China's Lanzhou and Kunming even cut their prices below their cost to secure deals. (Source: Interfax)
posted by Manoj Jain @ 12:25 AM
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