From the Ministry of Information Industry of the “2007 China Software and Information Service Outsourcing Industry Development White Paper” and “2007 China Software and information service outsourcing enterprises and personnel research report” shows that currently China’s software and information service outsourcing industry, with strong government support, sound infrastructure, abundant human resources and other advantages, but small-scale enterprises, capacity to undertake large-scale projects is weak, enterprise project management capacity, and scarcity of professionals and other issues also plagued the emerging industries. Both reports suggested that China should focus on intellectual property protection, increase the training of personnel, and to promote the nation’s public branding, and corporate alliances.

Industry Bottleneck

Today, China, Dalian has become a well-known business process outsourcing services center. In this region, rather well-known company is subordinate to the former General Electric (GE) subsidiary of Genpact. But now the company has to face not only competition, more problems people lure them away from peers. In China, capable business process outsourcing (BPO) staff who are not much, and therefore, major outsourcing agencies in this area has been coveted by professionals.

The problems faced by the company Genpact is also a Chinese software and information services outsourcing companies are facing trouble. Survey showed that, at present, China’s software outsourcing and information services about 800 enterprises, employing total of 10 million people. However, apart from the above-mentioned lack of qualified personnel, our country still has small-scale enterprises, capacity to undertake large-scale projects is weak, enterprise project management capabilities lower the bottleneck restricting development of the industry.

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Report pointed out that, at present, China’s software and information service outsourcing enterprises, with fewer than 100 enterprises accounted for 79.2%, more than 500 people and only 6%, the largest enterprises more than 4,000 people, the smallest less than 10 people. From the sales point of view, in 2006, China’s sales revenue of the industry about 20 billion U.S. dollars, turnover of more than 50 million yuan of the total number of enterprises accounted for only 7.3%. There are already several companies in India’s annual sales revenues of more than 2.0 billion. This shows that China’s outsourcing industry practitioners is also a lack of large-scale enterprises, the core competitiveness has not yet formed.

Chinese enterprises have a certain industrial base, but also a lack of management experience. Some get the relevant qualification of the enterprises in the course of business is still lagging behind the actual implementation capacity. In the past, the Japanese outsourcing business accounts for 57.6% of the total, this part of the lower profit margins, so Europe and the United States to develop high-margin outsourcing business to become the next focus of development.

In addition, the survey also pointed out that to develop the type of China-based outsourcing company can undertake the majority of the most basic coding, followed by a high degree of difficulty to undertake the project design, the monomer testing, system testing, ie ITO (Information Technology Outsourcing) accounted for 91% of the market; but can provide advisory services to small business outsourcing, BPO market is only 9%.

Policy support

According to China in 2010 to promote China’s software and information services outsourcing industry realized a sales income of 10 billion U.S. dollars, more than 100 large and medium enterprises, outsourcing professionals more than 500,000 goal.

Ministry of Information Industry in the White Paper states that China’s government will make efforts to resolve the following issues: first, to expedite the implementation of industrial policy, namely, “Software and Integrated Circuit Industry Development Act” in the study and formulation work, promote their as soon as possible, and to develop other specialized policies and management practices, and actively build service outsourcing base cities.

Second, we should vigorously implement the software and information services outsourcing industry, the national brand strategy, and actively guide and encourage enterprises to integrate resources, joint cooperation, promote the establishment of recognized software services outsourcing and information portal that provides businesses with international contract information.

The most important is the outsourcing industry alliance to establish and improve the overall core competitiveness. Ministry official pointed out that China will establish a National Association of Software and Information Service Outsourcing Industry Alliance, and truly play a role in promoting the industry alliance.