Chinese and Indian Companies Outsourcing, Too
A KPMG announced that 55% of Indian companies and 46% of Chinese companies are also currently outsourcing parts of their operations.
Another one-third say they plan to do the same. These results are based on a survery of 305 senior executives from Asia-Pacific companies.
Indian companies outsource for different reasons than saving money – primarily so that the company can focus on its core competencies.
Both "Indian and Chinese companies are outsourcing non-customer activities, preferring to manage the customer relationship aspects in-house."
Who would have thought? But, then it makes sense. If you can hire someone, an outsourcing company, to do things for you cheaper than doing it yourself, so that you can do what you do best yourself…then why not?
What do you think?
From my vantage point as VP, Business Development with both Worksoft and Beyondsoft, the two largest U.S.-focused China-based ITO firms, the issue at hand is totally loaded.
For example, L10N and G18N (localization and globalization) are almost always sub-contracted. And contractors (as individuals) are hired on a routine basis. But sub-contracting to other firms for higher-end work tends to be problematic: It’s potentially creating and/or strengthening a competitor. Hence, it’s not so common to see this. The exceptions tend to be other firms where there are very high level guanxi-based relationships, e.g., a CEO of one firm sub-contracting work to a firm owned by his brother-in-law.
At Startech, we take very high level work from others. As the outsourcing hub for Tsinghua University, China’s MIT, we have access to some EXTREMELY high-level talent — but not talent that most IT outsourcing firms would want to keep on their permanent staff. It tends to be very highly billable work.
Matter of fact, the sub-contracting tends to often be at the extremes: Low-level L10N/G18N and high-level algorithm development. Some stuff “in between” can be sub-contracted as a part of a firm’s staff augmentation. Alas, staff augmentation is really what most ITO in China is all about, especially for ISV clients like Microsoft and IBM.
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