Why outsourcing to China

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In today's economy, outsourcing is no longer an option but a necessity. Software outsourcing is graduating into the unstoppable trend in the software industry. As companies attempt to focus on core competencies, many are considering outsourcing various aspects of their in-house operations. The driving force behind this decision is typically cost reduction and organizational restructuring. Outsourcing can result in significant benefits for both customer and vendor.

In recent years, China is rapidly emerging from the competitive software outsourcing industry as one of the world's leading suppliers of offshore software outsourcing services due to its unimaginable development rate. Although India is now the undisputed world leader in software outsourcing industry, China aims to outpace India and become the next dominant competitor in software outsourcing just like what Gartner predicts: China will emerge as one of the top three countries for overseas software outsourcing between 2007 and 2010. Companies should plan their offshore outsourcing strategies to take advantage of China's emerging strength as an outsourcing center, including looking for ways to take advantage of the country's current software strengths.

Compared to India, there are many reasons to forecast that "China will soon be competing with India as an outsourcing destination".

China has a much more robust internal IT structure, networks and infrastructure than dose India. It has had a massive telecommunications expansion and more networking capacity than people think. All of these have been a direct result of the rapid and sustained national economic growth.

With it entering WTO in 2001, China has adopted laws and regulations conforming to the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which eases the concern of IP protect with outsourcing to China.

China has over 800,000 IT professionals and is graduating about 200,000 technical graduates each year. These people coming out have strong technical skills. So they're quite competitive with the people coming out of India.

China's labour cost is 1/5th to 1/10th of that of many European countries. India's advantage has always been the large pool of inexpensive talent. But now salaries in India are jumping at 25 percent or more annually. So India's cost advantage can't endure. Companies can gain 50%-60% cost saving from China considering the infrastructure, telecommunications and project management related costs.

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This paper presents the state, general focuses and prospect of offshore software outsourcing industry in China in a holistic sense to help you get a further understanding the advantage of choosing China comparing to other countries for your outsourcing needs.

Get a clear understanding of Why Offshore Outsourcing to China with a PDF presentation.

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