Outsourcers aim for the big league

India's traditional supremacy in the IT offshoring stakes is being challenged by China which plans to quadruple its outsourcing exports by 2010, according to this InformationWeek story.

software outsourcing China skillnet.gifAs EngagingChina has noted before, China is starting from a low base but growing fast. In 2007, China's software outsourcing services are predicted to reach €1.7bn according to German consultancy Skillnet-- see chart.

Nevertheless, China still has a lot to do to convince western customers and software houses that its competencies and skills are comparable with those of India.

In its latest initiative to address these issues, China hopes to convince 100 multinationals to outsource to the country and encourage the development of 1,000 large and mid-size indigenous outsourcers.

Unlike India, China's outsourcing industry remains highly fragmented and none of its indigenous outsourcers are household names in the west.

Most outsourcing experts say China's technical skills are -- or soon will be -- comparable with those of India. But there are a lot more factors that come to play in choosing an outsourcing partner and the lowest-priced bid does not always win.

TifoSoft, a Chengdu-based outsourcer, recently announced it would set up operations in Singapore, presumably in a bid to address the unease that some western customers may have about dealing with a Chinese company. Singapore is home to many multinationals and so western fims will presumably have less qualms using an outsourcing partner based on the island nation, even though the bulk of the work will be done at TifoSoft's facility in Chengdu, where labour costs are only a fifth of those in Singapore.

Also the IT outsourcing theme, ChinaTechNews has an interesting interview with Eric Rongley, CEO of Bleum, one of the first firms to spot the potential of China for offshore software development. To counter the communication problems that can occur with western clients, Bleum has an "English only" policy and provides English classes for its staff . Bleum is one of only a handful of companies in China to boast CMM Level 5 certification -- the highest quality certification.

The company was recently awarded Gold Partner certification by Microsoft in recognition of its expertise in Microsoft technologies.