Software Outsourcing China

 

Software Outsourcing China

 

Software Outsourcing

In general, outsourcing refers to the process of transfer of service by the parent server to a third side for the sake of meeting its financial and managerial goals. It can help businesses benefit from operational cost savings, shorter time to market cycles and access to cutting edge software development expertise. Not only will software outsourcing help the rapid development of the software industry all over the world, but also give rise to a deduction that the rate of the development is three times of what it would have been without outsourcing.

Software Outsourcing Development in China

In IT offshore outsourcing areas, China is unquestionably the brightest supernova around the world. The IT industries in China are well established, 90 percent of whose IT services work had been done locally. Total revenue of the Chinese software outsourcing industry has increased from 7.16 billion USD in 2000 to 19.3 billion USD in 2003 at a Cumulative Annual Growth Rate (CAGR) of 39 percent, according to China’s Ministry of Commerce. The income of exports from Chinese IT industries was increased from 0.25 billion USD to 2 billion USD with a CAGR of 100 percent during the exact period. Revenue in China's software outsourcing industry rose by 29.1 percent year on year to 604.8 billion RMB ($89.34 billion) in the first half of 2010, the Ministry of Industry and Information Technology (MIIT) said.

Through many years’ rapid development to be the world’s largest manufacturing country, China has fully comprehended how to effectively handle outsourcing trades. Up to now, it has played an important role in the global software outsourcing manufacturing market for several decades. China has attempted to develop an entire different industry called outsourcing in information technology industry about 10 years ago, especially after China joined WTO in 2001. After suffered from the downturn of global financial crisis from 2008, China has paid more attention to its emerging software and service outsourcing industry. At the same time, more and more foreign corporations all over the world have shifted their attention to Chinese IT industries. American IT companies, including Microsoft and IBM, even Indian IT companies have already built operations in China. As a matter of fact, facing the promising opportunity in China, foreign companies are able to undertake the global IT outsourcing demand in Chinese local market.

The Current Situation of China Software Outsourcing

Large numbers of China Software Outsourcing Development Parks were appeared during the last 10 years and were supported by China’s growth economy, infrastructure and transportation development. China’s government, maintain IT knowledge and languages, large IT talent pool, great international business opportunities, low labor cost, and the maturity of China Software Outsourcing industry.

The most two famous and ideal software parks in China are UFIDA Software Park which invested by UFIDA Software Group, the largest Asia-Pacific ERP software and IT solution provider, and Zhong Guancun Science Park (Z-Park) which supported by China government and both of them are in Beijing. Please CLICK HERE to read more about UFIDA Software Park and CLICK HERE for Zhong Guancun Science Park.

Not only Beijing, China government also encouraged and established many advanced software parks in other cities across China mainland to undertake global software outsourcing projects development. These China software parks are Hefei Software Park, Kunming Software Park, Dalian Software Park, Tianfu Software Park of Chengdu, Xi’an Software Park, Tianhe Software Park of Guangzhou, China Voice Park of Yangzhou, Huaqiao International Service Business Park on the border between Shanghai and Jiangsu, Wuxi Software Park, Hangzhou Hi-tech Industry Development Zone, etc. Clients can go to any of the above software parks easily from airports or town centers.

The Advantages of China Software Outsourcing

1- Low Cost Services
The most remarkable advantage of China software outsourcing is low labor costs. At present, the cost of offshore software development outsourcing in China is lower than in India, where 30 to 80 percent can be saved when hiring an in-house IT staff.

2- China is A Member of WTO
China joined the World Trade Organization (WTO) in 2001, which provides lots of opportunities to develop China economy.

3- The Supporting from the Government
Plans for all the IT outsourcing industry have been made out by Chinese government, including the offshore software development outsourcing, which provides a supportive ground for IT outsourcing development programs.

4- The Growth of the Professional Team
Annually in China, more than 700,000 of students with computer engineering degrees and 200,000 IT specialists with 50,000 professionals join the software outsourcing sector.

All these factors will jointly contribute to Chinese software outsourcing development, which will turn the software industry to be an important strength to boost the development of electronic information industry.

The Future of Software Outsourcing Industry in China

The future of China’s software outsourcing industry is promising. The next five years will be a golden period for China to speed up the growth of software and information services outsourcing. It will continue to be strong market demand in China for the global software industry.

Due to the rapid development of software outsourcing in China, more and more foreign companies are shifting their software projects to the Chinese market, ant China expected to replace India’s top place in the next five to ten years. Chinese government has listed 20 major software outsourcing cities which have the potential to undertake global software outsourcing projects. Among them, Beijing, as the capital of the country, would be the first choice to outsource global software projects.

Though the blueprint for China’s software outsourcing industry is bright but challenges still existed. One of the reason is that the global economic is still under the influence of downturn and will not immediately recovered, especially for the small and medium sized software outsourcing companies. In addition, some experts said Chinese software outsourcing companies still have long way to go because of their company size, experience and capacity compared to its biggest competitor Indian software outsourcing companies.

Chinese software outsourcing companies need to improve their ability of competition and industry structure instead of low level IT outsourcing work, hardware maintenance or other support services, said Kai Shao, CEO of RayooTech, one of the leading software outsourcing companies.