Indian Software Firms Tap China
For two hours every Friday, Chinese software engineer Huang He takes a break for an English-language lesson at his office here. His teachers: new Indian colleagues, who also are enlightening him about Western-style management techniques and Indian food.
Mr. Huang works for Infosys Technologies Ltd., one of several fast-growing, Indian software-outsourcing companies now setting up shop in China. It is an example of how companies in rapidly industrializing India and China are increasingly putting aside old, nationalistic rivalries to tap each other's markets and compete more effectively with Western rivals.
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12/22/04
In India, Infosys employs tens of thousands of English-speaking employees to handle back-office software projects for U.S. clients including Citigroup Inc. and American Express Co. Now, the company wants to re-create that high-tech, low-cost model for software development in China, where many of its biggest clients are beefing up operations.
"China will be a useful source of skills for Indian companies," says Girija Pande , a regional director for Tata Consultancy Services Ltd., another Indian software company expanding in China. Tata now has more than 200 people working at three China offices and plans, like Infosys, to market services to multinational companies operating in China as well as domestic ones. "These are two countries that are going to be collaborating," he says.
For U.S. companies still struggling to compete with cheap foreign labor in industries ranging from textiles to computers, it sounds like a double-outsourcing nightmare. But the trend toward Indian-Chinese business cooperation is likely to continue, analysts say, particularly in information-technology services where both countries have a wealth of engineers.
Both countries also are focused on boosting overall bilateral trade, particularly of higher-end products: This week, India's Ministry of Commerce and Industry said the value of India/China trade hit $10.8 billion during the first 10 months of 2004, up more than 82% from the same period last year.
Some big Western companies already have started doing work in China similar to that done in India. International Business Machines Corp. develops software in both places. General Electric Co.'s partly owned, Indian back-office processing unit has a 2,000-person operation in the Chinese city of Dalian. There, workers perform financial processing and other types of analytic work, executives say.
Putting Down Roots
Now powerful Indian outfits such as Infosys, Tata and Satyam Computer Services Ltd. are putting down roots in China, too. There are risks: The Indian companies must spend extra money to train Chinese engineers, many of whom lack strong project-management and consulting skills, including good English. But the Indian companies feel they need to be physically closer to their existing Western and Japanese clients who are now selling more products inside China. The idea is that Chinese programmers are best-suited to deal with material written in Chinese and can better customize programs for the heavily regulated Chinese market, including the accounting and billing software used by Western companies.
The Indian companies also are worried about their bottom lines: With competition for skilled programmers getting fiercer in India, and salaries soaring, the companies need new, affordable sources of labor to maintain a competitive edge over Western rivals such as IBM.
Infosys estimates that wage costs for software engineers are rising about 15% a year in India, but increasing just 4% in China. That makes China an alluring alternative to India for all types of programming, not just software built specifically for a customer's China business.
In terms of producing software, China is "the only country that comes close to India in cost, quality and scale," says Vineet Toshniwal, Infosys' head of sales and marketing for greater China. The English-language skills of Chinese engineers also are improving rapidly, and Chinese infrastructure -- including roads and power supply -- is often superior to that in India, he says. Mr. Toshniwal, 33 years old, is moving to Shanghai from Hong Kong to help open the new China office, which now employs more than 100 people. Company officials expect that figure to double by March.
Gradual Realignment
Uday Karmarkar, a professor of technology and management strategy at the University of California at Los Angeles, calls such cross-border business cooperation increasingly common. It is part of a gradual realignment of the information economy, he says, in which services, such as writing software, are being commoditized and parceled out to low-cost producers around the globe. "It's changing services to become more like manufacturing," where companies already are wringing costs out of super-efficient, global supply chains, he says.
And as large countries such as China, India and Brazil develop, their populations eventually will become big consumers of information services. That means China and India increasingly will do business with each other, he says. "The [economic] center of gravity is not the Atlantic anymore," says Mr. Karmarkar, who recently wrote an article on the topic for the Harvard Business Review.
Indian-Chinese cooperation runs both ways. Chinese telecommunications-equipment maker Huawei Technologies Co. opened a research center in Bangalore several years ago, hoping to tap the expertise of Indian engineers. Global manufacturing company Flextronics International Ltd., which is based in Singapore but has an electronics factory in Doumen, China, recently scooped up several small Indian software companies to help it move into product design.
But the software industry, still booming despite the current outsourcing furor in some parts of the U.S., provides a particularly good illustration of how India and China are working together on the ground. Infosys, which had revenue of $1.06 billion last year, is shifting some work for existing clients, such as a global logistics company it declines to name, to Shanghai from India. It also hopes to target domestic Chinese companies as they mature and need more IT outsourcing and consulting help.
Infosys officials say clients don't notice a difference in service as work moves to China from India; Infosys also doesn't raise billing rates, even if it has to spend more to get a Chinese development team up to speed. Analyst Dion Wiggins, of consulting firm Gartner in Hong Kong, says Indian companies might want to start by moving "lower-risk work" such as software maintenance to China, just in case quality is a problem at first.
At Infosys' new Shanghai quarters, staffers -- mostly Chinese -- occupy two brick buildings in the "Computer Software Technology Corridor," an office park in an industrial area of the city. The Chinese engineers and a handful of Indian expatriates toil in salmon-colored cubicles beneath walls bearing signs reminding them to promote "Infosys Quality." When it is time for lunch, they stroll together to the campus cafeteria, where Chinese workers translate local menu items for their Indian colleagues.
Some of Infosys' new Chinese engineers, such as 26-year-old Jessica Li, say they have long admired Indian companies like Infosys -- even though China's government hasn't always been friendly with India. Mr. Huang, 31 years old, says there are "always comparisons between the two countries" in newspapers. But he enjoys the Infosys culture, he says, because it is more disciplined than the atmosphere at Chinese companies where he previously worked. He is even looking forward to doing a training stint at Infosys headquarters in Bangalore. "I am expecting it," Mr. Huang says proudly.
印度软件业开发中国人力资源
中国软件工程师黄禾(音译)每周五要花2个小时在办公室里上英语课。一位来自印度的新同事为他授课，同时还让他对西方管理技巧及印度饮食有了初步的了解。
黄禾现在就职于Infosys Technologies Ltd.，这是一家业务正在蓬勃发展而且在中国开办了分支机构的印度软件外包企业。可以看出，曾发生过边境冲突的印度和中国在迅速迈向工业化国家的进程中，两国的企业界已经将不愉快的过去放在了一边，取而代之的是踏足对方的市场，并向西方竞争对手发起更有力的挑战。
在印度，Infosy雇佣了上万名讲英语的员工为花旗集团(Citigroup Inc.)、美国运通(American Express Co.)等客户承接后台软件项目。现在，该公司准备把这套聘请低成本员工来搞高科技项目的经营模式运用到中国的软件开发业务上来，因为该公司的许多大客户正在加紧拓展中国市场。
塔塔咨询服务公司(Tata Consultancy Services)的地区主管吉里?贾班迪(Girija Pande)表示，中国能在为印度企业提供高科技劳动力方面发挥积极的作用。塔塔在中国拥有3个办事处以及200多名员工，和Infosys一样也准备为在华开展业务的跨国企业以及中国国内企业提供服务。贾班迪表示，中、印两国企业界可以展开合作。
中、印两国企业界携起手来无疑使得本已在纺织品、电脑等多个领域疲于应对外国廉价劳动力压力的美国企业雪上加霜。但分析师们表示，中国和印度企业界展开合作的趋势不大可能逆转，特别是在信息技术服务领域，因为两国都拥有大量的信息技术人才。
与此同时，两国还在致力于促进双边贸易的发展，特别是在中、高端产品领域。本周，印度工商部(Ministry of Commerce and Industry)表示，今年前10个月中印双边贸易额达到108亿美元，较上年同期增长了82%以上。
一些欧美大企业已开始在中国从事它们在印度开展的业务。国际商业机器公司(IBM)同时在两地设立了软件开发业务。通用电气(General Electric Co.)持股的印度后台处理子公司在中国的大连市雇佣了2,000名员工。中国员工负责财务数据处理以及其他分析方面的工作。
如今，Infosys、塔塔、Satyam Computer Services Ltd.等印度大型企业也来到中国落户生根。风险也是存在的：印度企业必须为培训中国员工支付额外的费用，许多中国员工缺乏项目管理及英语等沟通技巧。但现在的问题是不少印度企业的欧美及日本客户正在加大对中国市场的开发力度，他们有必要紧跟这一趋势。之所以选择在中国开展业务是因为中国的编程人员最能读懂用中文撰写的书面材料，而且在中国这个很多方面受到政府严格控制的市场上，中国员工为西方企业开发的会计和计费等方面的软件更能满足实际需要。
印度企业这样做还出于利润方面的考虑：由于国内的人才争夺愈演愈烈导致编程员的薪金大幅增长，许多印度企业不得不开辟廉价劳动力的新渠道，以维持对IBM等西方竞争对手的竞争优势。
Infosys估计印度软件工程师的薪酬今年增长了15%左右，而中国的增幅仅有4%。受到印度企业青睐的不止是专门为其客户的在华业务开发软件的中国工程师，印度企业希望在中国找到能够从事印度的软件编程人员所做全部工作的软件工程师。
Infosys驻大中华区销售和营销业务负责人托西尼沃(Vineet Toshniwal)表示，就软件开发而言，中国是唯一能在成本、质量和规模上和印度相媲美的国家。他表示，中国软件工程师的英语水平也在迅速提升，而且，中国的道路、供电等基础设施往往也强于印度。为了协助开设中国子公司，现年33岁的托西尼沃从香港来到了上海。Infosys中国子公司现在的雇员超过100人。公司的管理人士预计到明年3月底之前，雇员数量将增加一倍。
加州大学(University of California)的科技及管理策略教授尤戴?卡马加(Uday Karmarkar)表示，这类跨国的商业合作正变得越发普遍。这是信息经济时代产业逐步整合的一部分。在这个过程中，编程等服务的质量在全球范围内已经没有多大差别，自然会分配给那些劳动力成本低廉的开发商。这就像全球制造业的转移趋势一样，制造企业从超高效的全球供应链中实现了成本的节约化。
中国、印度及巴西等发展中国家迟早会从人口大国演变为信息技术的消费大国。卡马加说，这就为中国和印度企业提供了展开商业合作的空间。他表示，就经济影响力而言，大西洋两岸再也不能独占鳌头了。
中国和印度企业之间的合作是双向的。为了吸引印度的人才，中国电信设备制造商华为技术有限公司(Huawei Technologies Co.)几年前在班加罗尔设立了一个研发中心。总部设在新加坡的伟创力国际(Flextronics International Ltd., FLEX)在中国斗门开办有一家电子工厂，该公司近期聘请了几家印度的小型软件企业帮助它迈向产品设计领域。
尽管在美国某些地区外包大潮激起了轩然大波，但软件业仍在欣欣向荣地发展，这是一个印度和中国企业可以携手前进的绝佳例证。Infosys把为现有客户提供的一些服务从印度转移到了上海。另外，随著中国企业的发展，他们将对信息技术外包及咨询服务有更大的需求，Infosys还希望能把握住其中蕴含的商机。
Infosys的管理人士表示，将业务从印度转移到中国后，客户们认为他们的获得服务并没有出现变化。尽管为了全力推进中国的软件开发业务需要追加投资，但Infosys并没有上调收费。咨询公司Gartner驻香港的分析师迪恩?威金斯(Dion Wiggins)表示，印度企业可能会先把软件维护等风险较低的业务转移至中国，以防自己的服务质量在这一转移过程中受到影响。
