Eric RongleyIn an industry where most companies perish before they find any gold, entrepreneurial foreign ventures find it difficult to make any headway in China's technology sector. But offshore development company Bleum has not only grown in size since its launch in 2001, it has risen to be one of the top software development centers in China.

Originally from the United States, Eric Rongley is the CEO and founder of Bleum. After graduating in 1989 with a degree in Economics, he worked as a futures broker in London. He then worked in the PC and training industries in Taiwan before landing an opportunity in 1994 to establish a software development center in India for a U.S. firm called IVR. He ran the development center there for five years, learning the offshore business model and a new management process called CMM–Capability Maturity Model.

In 1999 Rongley was recruited by the U.S. bank, Capital One, to open an offshore development center for them in Shanghai. He grew this to be the first CMM Level 3 in China and then in 2001 Capital One changed its strategy and sold off the Shanghai center to one of the top Indian firms to capitalize on its success. Having already set up two successful development centers in Asia for others, he decided that the time was right to strike off on his own.

How was Bleum founded and when?
In 2001 I resigned from Capital One to build China's greatest software company with several friends who recognized the opportunity and wanted to invest. However, before the company was formed the dot-com bubble burst and those friends who were still in their jobs became risk averse. Since I had already quit my job, I decided to go ahead on my own.

In August of 2001 the first employee was hired, which may be considered the start of the company. We worked out of my apartment in Shanghai for several months while we looked for our first clients and developers. Since we started under-funded, Bleum first focused on local China projects. Quickly I learned that success building offshore development centers in India and China to serve Western clients did not necessarily translate into success serving the local market.

After a year of struggling in the local market it became clear that we should focus on what we do best, building high performance teams for overseas clients. By the end of the second year this transition to pure offshore work was completed successfully and we have never looked back.

How has the company grown in its personnel and product offerings since you started the firm?
Initially Bleum staffed up to 10 developers and we did a number of development and testing projects for banks, both foreign and local in China. Once we transitioned to offshore work we focused on a service called ODC. That stands for Offshore Development Center, and it is quite different from project-based work.

An ODC is a large team that is dedicated to one overseas client and acts more as part of their organization rather than as a subcontractor. The customer benefits from retained knowledge and increasing productivity and Bleum benefits from the stable business resulting from these long term relationships.

Today Bleum provides a number of services all focused on our ODC customers. Some teams do custom development, others maintain large legacy systems for our clients and others produce sophisticated automated testing frameworks that are critical to keep highly complex production systems operating. Having passed the survival stage we are now entering our high growth stage and are surging past 200 staff.

How does Bleum differentiate itself from competitors?
There are a number of ways we differentiate ourselves. Firstly, we are a service provider only. Therefore our focus is on client service and providing best possible added value solutions.

Secondly our focus to date has been on developing our long term growth platform. We have turned key concerns for not outsourcing to China into our key differentiators. Our business is therefore based around; capability; security and communication. For example with regards to capability, we are one of the only companies in China with CMM Level 5 certification and the first to also achieve ISO 27001 security certification. This is the highest information security standard globally. We also have an "English Only" policy that is backed up with a comprehensive English training program that is winning praise from our customers.

A final differentiator is that amongst all our competitors here in China we remain American owned and managed. This means we understand the culture and the business pressures our clients in the west have.

When Bleum gets a new client, what is a typical process you take to prepare to service that client?
At the start of a new engagement we have a formal knowledge acquisition process. Depending on the circumstances we may send a core team to work for a period of time onsite with the customer, they may send their key technical people here, or we may capture the knowledge remotely. In this first stage the team will learn and document the customer's processes, business domain, development environment and build relationships with the customer's team.

An ODC operates like an extension of the customer's IT organization rather than just as a subcontractor. Like with internal teams, bottlenecks of communication reduce productivity and ease of operation. Building strong relationships with the customer and enabling fluid communication between all members of both teams are critical to getting an ODC up and running smoothly. Consequently English skills throughout the whole team are vital, not just for the project manager.

Although we have a mature CMM Level 5 software process, the processes used by a new customer's internal team invariably differs from ours at the start. If we try to force our process onto them in the beginning of the relationship we may alienate the very people from whom we most need cooperation. Therefore we first synchronize with our customer's process, and focus on building a successful track record delivering results. Then slowly over time we make suggestions and implement parts of our process which compliment theirs enabling us to provide us long term improvements in quality and productivity. We often hear from our long term clients that collaborating with Bleum has improved the performance of their internal teams.

What are some challenges you have or currently face in operating a technology business in China?
We have viewed challenges as opportunities for ensuring our business model has a great foundation and addresses major concerns about outsourcing to China.

Assuring clients about capability is vital. Hence Bleum is one of the first companies to receive CMM Level 5 certification and all of our project managers are PMP certified. PMP stands for Project Management Professional and is the most recognized certification globally.

Security is another key challenge. Bleum addresses this by putting in place security systems and processes including ISO27001. Through our continuous attention to security issues and rigorous processes we have built close to a Zero Risk Environment for our customer's Intellectual property and data.

The other key challenge is language and cultural compatibility. Bleum has a proactive English language policy that is winning support from our clients.

Finally, like all businesses in China we are challenged to find enough suitably qualified talent, especially middle managers. We have a continuous recruiting program designed to identify the brightest talent in China with the competencies that we see as critical to success in the offshore industry. We often find that our best managers are ones who have risen up through the ranks and therefore have a comprehensive training program to identify and nurture the most promising individuals.

What type of advice do you have for other wannabe technology entrepreneurs entering the China sector?
Look at the Indian model 10 years ago with a number of major players. Those players of 10 years ago such as Wipro, Infosys and Cognizant are still the major players today. Entry has to be now before it is too late.

How does China compare to India as an outsourcing destination?
China has the greater longer term potential and will be able to keep up with demand and provide a quality offering for far longer than India. This is due to the still untapped but vast and highly skilled and qualified talent pool that is to be found in China. The key challenge with India at present is over demand and under supply and therefore quality is starting to fade.

People aside, China has a better infrastructure; better roads, airports, and communication facilities. On an emotional level, many prospective clients prefer Shanghai to India.

What are some milestones or benchmarks you have that plot your success?
There have been a number of successes, some on a personal level and others at a business level. Starting as a young foreigner in China with relatively little resources compared to what a company like this requires, just surviving was very gratifying.

At the business level, Bleum has established itself as the Gold Standard in China's software industry. This was first realized by pursuing the highest international standards in our industry to demonstrate that one could get the highest levels of service here in China. In 2005 we were one of the first companies in China to achieve CMM Level 5 and last year we became the first to also achieve ISO27001. Last November we became a Microsoft Certified Gold Partner. That is the highest level attainable in the Microsoft development community and validates that our team's excellence in Microsoft's newest technologies such as Service Oriented Architectures (SOA).

Through our uncompromising pursuit of quality we have achieved international recognition. In 2005 we were recognized as the number one outsourcer in China in a review by industry experts NeoIT and CMP publishers. We continue to win international awards and recognitions and seek to raise the standard in China. For the last two years Bleum has been included in the list of the top 100 outsourcing firms in the world and this year was identified as one of the rising stars by the International Association of Outsourcing Professionals. Bleum was also identified as one of the World's top 15 emerging outsourcing companies by industry expert Gartner in 2006. We seek to not just be one of the best in China, but to mature into one of the World's great software firms. Notably we have not achieved our reputation by having the most number of heads, but through our laser focus on delivery and excellent customer references.

Did you raise outside capital in the past, and are you currently looking for capital for expansion?
Bleum has only taken funding from friends and family until now. We are committed to building a long term and sustainable business. We are in the business for the long term. Our success is based on ensuring that our business model is strategically and technically sound. It is based our capability, security and communication. With these in place, sustained growth can be managed.