VideoNevertheless, China is ready. Already, IBM, Microsoft, Hewlett-Packard, and other multinationals are running IT-services support in cities like Shanghai, Wuhan, and Dalian.
Skills-wise, China's strength is in programming, and less so in systems integration and project management, says Rajesh Rao, COO of Bamboo Networks, a Hong Kongbased provider with outsourcing centers in the mainland. As a result, any CFO attracted by the potential cost savings in China would be wise to consider what applications he or she is planning to outsource. "If you're going to outsource a relatively recent package like Siebel, I would do that in India, but if I was going to outsource C++ or Java, I'd do that in China," says Brooks.
As for business-process outsourcing, such as running call centers, processing invoices, and human resources, China remains far behind India. The reasons go beyond the limited use of the English language. "The way of processing invoices and handling human resources, legal matters, and insurance is very different in China," says Alex K. Lam, Toronto-based COO for Asia of U.S. consulting firm The Outsourcing Institute. Also, despite reform efforts, China still has major obstacles with its banking system, wherein the central government keeps a very tight lid on the movement of foreign exchange. "Because of all these things, the mind-set of the Chinese in terms of business processes is not as—for lack of a better term—advanced as the West," says Lam. —A.D.R.
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