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Wuxi takes giant strides in outsourcing game

By Shoba Montague

According to China’s Ministry of Commerce, the value of the country’s international service outsourcing contracts for 2011 has exceeded USD 10 billion with 152% increase YOY. It reports also that over 8000 service outsourcing companies hired 700,000 more employees, approximately 500,000 among them fresh graduates, making it a 12% increase YOY.

The global slowdown is also pushing foreign firms to transfer their non-core business to China. As such local governments are shifting from reliance on labour intensive industries to catering to the needs of foreign companies looking to outsource their business operations.

Wuxi Municipal People’s Government is one such local government providing incentives to nurture Wuxi’s growth in the outsourcing industry.

Wuxi has been holding the Asia Pacific Service Outsourcing International Conference (APOIC) for three years now as part of an effort to showcase itself as a viable outsourcing location.

At its fourth edition of the conference this year, The International Institute for Outsource Management (IIOM) China reported that Wuxi’s service outsourcing contracts has reached USD2.44 billion growing at a rate of more than 65% YOY.

Wuxi has been approved by the State Council of China as China’s Service Outsourcing Model City as local government policies over the years has seen the establishment of over 10 state-of-the-art software and outsourcing parks.

A great number of leading service outsourcing providers have set up bases at these parks such as Hewlett Packard, Achievo, Exigen, Freeborders from USA, SONY, NEC,NTT and Fujitsu from Japan, NIIT and Zensar from India, Softtek from Mexico, and Hisoft, isoftstone, ICSS, Inspur, Neusoft, Vanceinfo, Beyondsoft, Lenovo Service and many more.

According to IIOM-China’s report, projects totaling US$170 million were contracted during this year’s APOIC conference, some of which involved software development, data entry, flash development, investment and financing.

Roger Li, Director of Marketing and Sales of JoinBPO, an offshore business process outsourcing service provider in Zhejiang, China, found the conference a perfect platform to meet buyers.

He was one of the 300 delegates who attended the conference.

“JoinBPO provides legal process outsourcing and information technology outsourcing, data solutions which include data capture and forms processing, to English speaking countries.

“Our potential clients are in the US, UK and Australia. For us, the conference in Wuxi is the perfect platform to meet buyers from these markets and I particularly found the Business Matching segment of the conference useful as I got the chance to have one-on-one chats with various buyers. This allowed me to introduce my company and at the same time gauge the kind of services they are looking for and customize our services to suit their requirements,” said Li.

“I think China offers foreign clients many values that other countries don’t have. Besides the low cost of operations and huge qualified labour, it also has wonderful infrastructure. Its vast domestic market is something clients can look to tap also. Last year, Chinese suppliers generated US$20 billion revenue according to a report by KPMG. And the forecast is US$50 billion by 2014.”

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The Mayor of Wuxi, Zhu KeJiang was also present at the conference to meet with the delegates from all over the world. He accepted Wuxi’s award for being the 12th safest city for Offshore Outsourcing 2010 from Black Book of Outsourcing.

Experts from Klynveld, Peat, Marwick and Goerdeler (KPMG), Microsoft, Infosys and other world-renowned business executives shared their extensive knowledge on outsourcing management, trends, international outsourcing and personnel training.

Scott Wilson & Douglas Brown, the authors of Black Book of Outsourcing also gave a talk on their overall survey while the keynote address was given by Chen Wenjin, Chief Economist of Service Outsourcing Research Institute from the Ministry of Commerce.

One of the highlights of the event is Business Matching organised by IIOM China where 28 international service buyers met one-on-one with 70 domestic service outsourcing companies.

“Companies like JoinBPO who rely almost completely on foreign clients appreciate this session as we get the chance to personally talk to potential clients about the services we offer,” said Li.

Another event highlight was drawing the best from local talent and providing incentives to them.

The Wuxi Municipal People’s Government played an active role at the APOIC conference in stimulating the growth of local talent. To coincide with the event, it held the Second Chinese College Students Service Outsourcing Innovation and Application Contest.

The Ministry of Education and Ministry of Commerce of China co-hosted this event with the local council.

 “The contest started from June. This year 70 Chinese universities and colleges took part. We held several elimination rounds until only 30 colleges and universities were placed as winners at the finals which took place in August,” said Michael Zhang, Deputy Director, Service Outsourcing Section, Wuxi Bureau of Commerce.

 “The winning teams were awarded certificates, flight tickets to Taiwan, cash and other benefits and the award ceremony was held one day before the conference as our goal is to get the students to participate in the conference. We want them to get the feel of the business transactions taking place at the conference and experience what the practical aspect of working in the real world would be like.

 “The contest also incorporated real projects for them to do such as taking a model retail business like Walmart and coming up with the best applications for their buyers.”

NIIT Wuxi (China) Institute of Service & Outsourcing located in one of Wuxi’s technological parks boasts of an employment rate of its graduates of over 95%. Many more talent training institutions and academic facilities are dispersed throughout the parks to cater to the ever expanding foreign and local companies setting up offices there.

IIOM-China’s Chairman Emeritus, Jerry Durant feels the APOIC keeps improving each year.

“Wuxi continues to roll out the red carpet to foreign investors, buyers and business analysts – showing them why the location should be considered as a premier outsourcing destination,” he said, adding that the collaborative efforts of the local council and Ministry of Commerce with IIOM helped to bring about an event that addresses all the key areas of outsourcing.

He affirmed China as a major player in the outsource provider market.

“It is focused on building, perfecting and delivering services on par with other industry leading nations to the point of investing heavily not only in promotional activities but also in their vast human resources to scout for and develop local talent. Prior issues of Intellectual Property Rights (IPR) and English proficiency is being attended to and is rapidly becoming less of an issue,” said Durant.

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