After a run of stunning good fortune, India's tech community finds itself dealing with a looming challenge from a flourishing Chinese economy. Just as American companies saw jobs disappear to less-expensive venues in India, China has begun to figure as an alternative for the practice of shipping tech tasks offshore.
The shift has not gone unnoticed by leading technology outsourcers in India, who are dealing with creeping wage inflation. As a result, some are fast establishing a presence in China to remain competitive with their peers.
How big this trend will become remains unclear. Revenue from IT services is rising in China, but it is still barely half of India's US$12.7 billion a year, according to a recent report from consulting firm McKinsey.
Part of the problem is a fragmented market, McKinsey said. And China faces other challenges, not the least of which is a lack of management talent.
ZDNet Australia sister site CNET News.com recently spoke with Sudip Banerjee, president of enterprise solutions at Wipro Technologies, about the relative cost of software operations and other issues surrounding the future of outsourced tech work in China.
Q: What are the advantages and disadvantages of being in China right now?
Banerjee: The advantages are twofold. You have a large labour supply pool like you have in India. The other advantage is that if you're dealing with customers or companies who have an Asian headquarters, there is a language and cultural advantage. (That is brought by) some of the Chinese, particularly in cities like Shanghai, which has bilingual engineers who speak both Japanese and Chinese.
In terms of the areas where they still fall short, I think one is the intellectual-property protection issue. The second is their English language capability, and the third is their lack of project management expertise.
Is there is a particular example of things going well in China? Have you been surprised at something working out where you didn't expect it to?
Banerjee: I think they have very dedicated people. The programmers that you get there are very hardworking, very dedicated, and they produce content as good as anyone else. When we went there first, we were not sure what kind of output we would get, but we're very happy.
I think the challenge there is only in the project management area -- project lead area or the specialised consultant area. But at the grassroots level, the attitude as well as the ability to do hard work and the quality of output -- all that is very good.
When you're talking about this dedication and quality, are these Chinese programmers and other professionals developing in computer languages using Chinese characters? Or English alphanumeric characters? How does it work?
Banerjee: We only hire people who can do it in English, except where we have to do a local office implementation. So we do tend to get bilingual people. We have a requirement sometimes of people who know Chinese characters.
Can you give an example of a time when things didn't work out well? Or you ran up against an obstacle that you hadn't expected? Were there any intellectual-property scares you had there in China, for example?
Banerjee: We ourselves haven't had those, because of the nature of work that we have done. We have not exposed ourselves in any area where it could be in trouble with IP. But I've lived in Shanghai, and I've met people, and they certainly do have those concerns.
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