Why Software Outsourcing to China

China is becoming a top preference for offshoring and software outsourcing. There are many compelling reasons as to why China is an ideal destination to either put into effect a multisourcing strategy or set up an ODC. Here is a snap shot on why? For the Bleum whitepaper "Software Outsourcing to China" , please click here to receive a copy

China's huge and diverse talent pool

The size and skill of China's talent pool has barely been tapped. The Chinese Government is mobilizing this resource and having identified software as one of the six favored industries in 2000 is proactively supporting the software outsourcing industry. National schools for software training have been set up and the number of graduates from Chinese universities with degrees in IT, computer sciences, and software engineering is growing year on year.

Chinese Government Support

The Chinese Government support is proving critical to promote the offshore software business in China. In addition to investing heavily in developing a skilled workforce, the Government is providing tax breaks and incentives to software outsourcing companies setting up operations in China or improving their capability. Service providers receiving CMM Certification were awarded grants by the Shanghai Government.

Capability

In the rush to be a world class player, China has focused on raising its capability in the software outsourcing industry. An increasing number of software outsourcing companies are seeking CMM certification from Carnegie Mellon University's Software Engineering Institute. By having a recognized global standard, China will become an increasingly favored destination.

On an individual level, the number of certified PMP Project Managers from the International Project Management Institute is increasing year on year. This rose from 80 to 5,000 between 2000 and 2004. Importantly, the technical skill set is on the rise with many IT professional now practicing the most advanced software development based on the Java and Microsoft .NET platforms. Many professionals also have expertise in legacy platforms, including COBOL.

Infrastructure

China is now wired for business. Accessibility is on a par with New York or London with Shanghai boasting a state of the art international airport with direct daily flights to most major cities in the world. Importantly access to downtown takes only 7 minutes on the world's fastest train - The Maglev. There is accommodation and restaurants to suit all tastes and budgets, and free and reliable broadband and wireless access is widely available.

India is overheating

There is a widening gap in India between supply and demand. The increase in demand remains but there is a dwindling talent supply and a hike in prices. As a result, quality is suffering. With the present rate of demand it also appears unlikely that India can overcome this issue, in the short term.

Multisourcing improves results

As outsourcing becomes a strategic operating policy for an increasing number of companies so organizations are looking to outsource to two or more destinations. A second outsourcing destination has many benefits; it diversifies the geopolitical risk, companies can increase their negotiating power amongst service providers and it prevents a company becoming beholden to a single vendor.