China partners S'pore in outsourcing push

Chinese software services provider TifoSoft Software Services has established operations in the island-state to jointly promote offshore outsourcing capabilities of Chengdu and Singapore to Europe and the United States.

The Singapore subsidiary of TifoSoft aims to be the bridge connecting software and business process outsourcing (BPO) companies in Chengdu with Singapore IT services providers, said Jade Zhang, TifoSoft's vice president, Tuesday at the launch of the office.

TifoSoft heads the Chengdu Software Outsourcing League, an alliance comprising 49 companies. Zhang told ZDNet Asia that he expects the number of members to grow to 60 within the next three months. Members of the alliance include Singapore-grown companies such as NCS and Singapore Computer Systems.

Zhang noted that China and Singapore are culturally similar and their strengths complement each other in the outsourcing business. China, he explained, has the human resources while Singapore is a recognized player in the global scene and is home to many multinational corporations.

TifoSoft's move is believed to be the first such platform facilitating partnerships between outsourcing providers in China and Singapore. The company also has subsidiaries in the United States and Japan.

Stephen Lim, a council member and immediate past chairman of the Singapore infocomm Technology Federation (SiTF), pointed out that with the move, "there'll be some competition" for local players from the Chengdu software and BPO services providers. However, it also opens up opportunities for Singapore companies to access cheaper resources, as the "cost structure there is about one-fifth that of Singapore".

TifoSoft, headquartered in the Chengdu Software Park which is located within the Chengdu Hi-Tech Zone, is one of 53 technology hubs in China. Chengdu is located in the southwestern part of China and has a population of about 10.5 million.

According to IDC, TifoSoft said, IT outsourcing is the fastest growing segment of China's IT services market, with a five-year compound annual growth rate (CAGR) of 39.9 percent up to 2009. The BPO market in China is also expected to enjoy a CAGR of 34.8 percent between 2004 and 2009.