CHINASOURCING Releases Recent Overview on China Advantages
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China's outsourcing industry has become increasingly dispersed regionally. Due to the cost increase in primary cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, service providers are moving their operations to 2-tier cities. At present, all major offshore outsourcing service providers in China have established themselves in cities such as Nanjing, Xi'an, Chengdu, Chongqing, and Wuhan, which has somewhat alleviated the pressure of rising salaries. This tendency is likely to grow in the years ahead. At the moment, China's outsourcing market is still centered in Beijing, Shanghai, and Guangzhou; bridged by the international ports of Dalian and Shenzhen; and supported by Nanjing, Xi'an, Chengdu, and Wuhan.
The project management level and process management capabilities of China's outsourcing companies have also come a long way. Most outsourcing companies have obtained related certifications. In 2006, about 80 software companies in China had a workforce of more than 1,000 employees each. The number of companies with software sales revenue of over RMB 1 billion has increased from 12 in 2002 to 35 in 2006 and the number of companies with software sales revenue of over RMB 100 million reached 396. As of 2006, 69 of the 152 key software enterprises in the State Programming and Layout had revenue of over RMB 100 million. By the end of 2006, 38 software companies in China were Capability Maturity Model (CMM) 5 certified, 23 companies were CMM4 certified, and over 200 were CMM3 certified. In addition, 2,136 companies have obtained service integration qualifications. Large Joint-Ventures organized by Indian BPO and ITO providers in China have also accelerated the development of China's BPO and ITO capabilities. More and more buyers are recognizing China's strengths in its growing number of outsourcing service providers and improved quality and customer satisfaction with its outsourcing projects.
Outsourcing service providers in China have also improved their competitive edge through mergers and acquisitions (M&A). Since 2006, the industry has seen rapid growth in M&A, indicated in its change in market share. In 2005, the 10 biggest outsourcing service providers in China had market shares of about 24.2% each, which by 2006 increased to 30.7%. Among these service providers, only companies active in the Japanese market continued to rely on business growth as M&A in this market were rare in the last two years.
Some large high-performance outsourcing service providers have adopted the strategy of "going global" and managed to cultivate international markets. Others established R&D, marketing, and service institutions abroad, trying to get close to outsourcing buyers' markets and work out solutions that can meet both the business standards of service providers and special requirements of service buyers.
Read the original version at : http://www.chnsourcing.com/about_china/advantages/ |
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