IT Outsourcing Firm VanceInfo Wins 2010 Deloitte China Risk Intelligence Award

VanceInfo Technologies Inc. (NYSE: VIT) ("VanceInfo"), an IT service provider and one of the leading offshore software development companies in China, today announced it was granted the 2010 Deloitte China Risk Intelligence Award by Deloitte Touche Tohmatsu CPA Ltd. ("Deloitte"). The award, granted in collaboration with School of Economics and Management at Tsinghua University, recognizes prominent Chinese mainland companies that have demonstrated competence in enterprise risk management. Twenty five enterprises out of more than 120 participating companies were selected for the awards.

Deloitte defines a risk intelligent enterprise as one that is able to intelligently manage a full spectrum of risks across all aspects, the practice of which helps improve operations and enhance transparency. The selection criteria, covering nine distinct characteristics of risk intelligent enterprises, center upon the innovativeness and achievements of risk management work.

"We are privileged to receive this recognition from Deloitte and Tsinghua University." commented Chris Chen, VanceInfo Chairman and CEO. "We have strived to build a solid risk management platform that protects not only our business from undue risk, but our clients and shareholders as well. We are focused on maintaining a high level of enterprise risk intelligence to ensure responsible and sustained growth in our dynamic IT services sector."

From: http://www.bobsguide.com/guide/news/2011/Jan/18/IT_Outsourcing_Firm_VanceInfo_Wins_2010_Deloitte_China_Risk_Intelligence_Award.html

China Becomes Japan's Biggest Software Outsourcing Base

China's growing software outsourcing trade with Japan is expected to rise even faster after Premier Wen Jiabao's "ice-melting" visit to Japan.

"China accounted for more than 60 percent of Japan's outsourced software trade in 2006 and has become the country's biggest software outsourcing base," said Mine Shentaro, of the Japan External Trade Organization based in Dalian, northeast China's Liaoning Province.

Dalian Hi-Think Computer Technologies (DHC) Co. Ltd is one of China's leading software outsourcing firms. Manager Liu Jun is proud of its big-name customers, including technology giants Hitachi, Sony, Mitsubishi and NEC.

"DHC started outsourcing computer software from Japan in 1996, a time when Sino-Japanese relations were at low ebb. Political hindrances have not impeded our business," said Liu.

DHC's business with Japan has grown 30 percent annually since 1996 and now employs 2,000 people. Last year, the company exported software worth 50 million U.S. dollars to Japan.

"More than 60 percent of China's software trade is Japan-oriented," said Jin Guowei, deputy director of Dalian Information Technology Bureau.

Dalian, a Japanese colony for 40 years before the end of World War II, became the outsourcing center of information technology to Japan due to its geographical proximity and its skilled labor force.

The city's software industry sales last year set a new record at 10 billion yuan (1.23 billion U.S. dollars), maintaining a 60 percent annual rise in the past six years.

Of the sales, processing outsourced software contributed 3.7 billion yuan (456 million U.S. dollars), of which at least 80 percent was for Japanese companies.

The city has 20,000 people working in the software-outsourcing sector and 70 percent of them speak Japanese.

According to a government plan for the development of software and information services, China aims to generate 168 billion U.S. dollars from the software sector and export 12.5 billion U.S. dollars worth of software services in 2010.

Jin is confident in the future. "With the improvement of bilateral ties, I believe the industry will become more prosperous."

"The friendship between China and Japan is an irreversible trend. Premier Wen Jiabao's visit to Japan is good for the two countries. I hope after the visit more Japanese can put away misgivings and start cooperating with Chinese firms in the software industry. It will be a win-win solution." said Jin.

"While European and American companies are choosing India as an outsourcing base, Japanese firms prefer China because we are close neighbors and have similar cultural backgrounds." said Noshiro Yasuo, president of Fujitsu System Engineeering Co., Ltd in northwest China's Xi'an.

"Premier Wen's visit to Japan will give us more confidence to expand our business in China," he added.

From: http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200704/20070404564441.html

Service outsourcing industry robust in China, boosts employment

The global economic meltdown impacted many of the clients of BT Frontline, which provides outsourcing services for the IT systems of docks and logistics companies. But its General Manager, Lawrence Low, is still satisfied with the company's performance amid the financial crisis and confident about its future.

China's service outsourcing industry, mostly about software outsourcing, bounced back in the second half of the year from a hard time of three months caused by shrinking demand from the global market, according to Yu Hengzhuang, vice president of Dalian Software Park.

"We have gained access to high-end market and recently entered the Middle East market, which more than offset the impact of the global downturn," Low said.

"Our business not only survived, it grew and thrived," Low said with a smile, keeping the exact figures as business secret.

RAPIDLY DEVELOPING INDUSTRY

The software outsourcing park in Dalian, the industrial hub in China, attracted 63 new clients in 2009, bringing the overall number of businesses in the park to more than 400, and the park's total sales are expected to top 20 billion yuan, up 32.9 percent year on year.

The sales of Dalian's software outsourcing business grew from 200 million yuan (29.3 million U.S. dollars) to more than 30 billion yuan in the past 10 years. A total of 700 companies are in the industry, including 300 joint ventures and more than 40 Fortune 500 companies.

In the first ten months, the industry's sales in Dalian grew by33 percent to 33.7 billion yuan and its export grew by 34 percent to 1.1 billion U.S. dollars.

While Dalian has become a world famous hub of software outsourcing after Thomas Fridman compared it with Bangalore in India, another less known industrial hub with equally fast pace in east China's Jiangsu Province, is taking shape.

The contract value of Jiangsu's software outsourcing industry reached 3.28 billion U.S. dollars in the first 10 months of the year, a growth of 174 percent. The province has 2,470 companies in the industry, with 290,000 employees, according to statistics from the provincial department of commerce.

The provincial capital Nanjing's software outsourcing industry had a contract value of 2.1 billion U.S. dollars in the first 11 months of the year, growing by 239 percent.

"The income of China's software industry, which software outsourcing takes a major part, has been growing by 38 percent annually and its revenue is expected to top 1 trillion yuan in 2010," said Hu Kunshan, vice chairman of China Software Industry Association.

China's software industry earned 757.3 billion yuan in 2008, and the figure is expected to reach 900 billion yuan in 2009.

BOOSTING EMPLOYMENT

The rapid development of outsourcing industry bears great significance in sustaining economic growth, restructuring economy, stabilizing export and boosting employment, said Chinese Vice Premier Wang Qishan during a visit to Dalian in November.

More than 60,000 people are working in the software outsourcing industry in Dalian.

China's outsourcing industry recruited 690,000 new employees, 460,000 of whom were college graduates, in the first 11 months of 2009, according to statistics released on a national conference on commerce.

China's Ministry of Human Resources and Social Security expects the outsourcing industry to create 1.2 million new jobs in five years, including 1 million jobs for college graduates.

At the end of Sept. 2009, 1.42 million people were working in 8,060 outsourcing companies in China, said Qian Fangli, deputy head of the foreign investment department of the Ministry of Commerce.

The software outsourcing companies in China have enough programmers but lack mature project managers and decision makers, who are on the top of the talent pyramid, said Yu Hengzhuang, vice-president of Dalian Software Park.

The gap in talent pool limited the size of such companies to less than 300 people, which is a human resource threshold to carryout core projects with high added value. "That's why Chinese companies are now the lowest ring of the world software outsourcing chain," Yu added.

From http://english.peopledaily.com.cn/90001/90778/90860/6857605.html

Four Characteristics of the International Service Outsourcing Market

This article from http://news.at0086.com/China-Outsourcing-Services/Four-Characteristics-of-the-International-Service-Outsourcing-Market.html

As a product of increasingly refined social division of labor and IT technology development, the Service Outsourcing will become a new vital driving factor along with the tide of the new round industry shift. What kind of opportunities and challenges does the rapid developing service outsourcing will bring for the world-wide countries and enterprises in the new century, as well as the related large service outsourcing market?

China and India become the two biggest world outsourcing bases

The world’s developed countries and regions mainly serve for outsourcing exporting regions, and developing countries are the main service outsourcing recipient places, Asia undertakes most outsourcing business especially, which occupies 45% of the international outsourcing business. China, India, Ireland, the Philippines, Russia and some other countries are the main competitors of the international outsourcing markets. However, China and India have become the main attractions in the manufacturing and service trade outer pack of the developed countries, along with the increasingly development and perfect of the international service outsourcing.

Expansion of Service Outsourcing Area

Nowadays, along with the total amount increase in the world, the new service outsourcing area is being formed gradually, and the definition of the service outsourcing has a new extension, especially the improvement of service outsourcing requiring skill with the help of the development of information and network technology for the past few years. Now the coverage of the international service outsourcing has been changed from traditional information technology and operation flow outsourcing to many areas, such as the areas of finance, insurance, accounting, human resource management, media public administration and some others.

IT and Financial Service Outsourcing become the leading parts

Along with skill-intensive and knowledge-intensive oriented development of the service structure, the high and new technology related or dependent service outsourcing are developing rapidly, but the IT and Financial Service Outsourcing are still the leading parts. IT outsourcing service includes IT systemic and operation flow outsourcing service. Because of the increasingly complex internal integration and external combine of the financial circle, as well as the division of labor based on specialization and scale economy influence, there are more Financial Departments choose the international outsourcing, so that the Data Center, Underwriting and Claim Management, stock deal and financial analysis can be conducted in some appropriate low-cost centers.

Vertical Markets Earn Widespread Respect in the International Outsourcing Service

Generally speaking, the outsourcing service items have no connection with product classification, especially in the IT area. However, with the spirited competition among outsourcing markets, the Outsourcing Service Company has difficulty in displaying its features to win the beneficial location. Therefore, in the past several years, in virtue of the needed professional skills in the vertical markets, the efforts of cutting into the vertical markets to offer clients more professional service can be an efficient strategy.

The Brief Introduction of China's Software Outsourcing Procedure

Software industry, as a new industry in the mid-term of last century, has its inborn features and advantages to blend into the globalization tide.

Software industry, as a new industry in the mid-term of last century, has its inborn features and advantages to blend into the globalization tide. Software outsourcing industry has risen dramatically and is becoming a very important commercial mode in the modern society. If you want to find software outsourcing service in China, you have to know the following outsourcing service procedure.

Strategic decision- homemade or purchase

The clients firstly choose software product or component according to the company’s strategy and market demand. Once the decision has been made, the company will make a decision- to homemade or purchase.

To sign an outsourcing contract

Once the outsourcing mode has been fixed, the outsourcing management group and the vendor will negotiate on the contract style and contract content to reach an agreement. The clients will provide the vendor with SOW and describe the job task and requirement. The vendor will provide proposal for the clients. Finally, they sign the outsourcing contract

The enforcement of outsourcing service

After the signing of contract, it is far from the ending of outsourcing management group’s activities for the clients. The clients should monitor the process of the outsourcing service and provide change request according to the product demand to avoid the high risk event’s happening.

Acceptance check of product

The vendor should prepare the product which is going to be checked and hand the necessary material to the outsourcing management group in advance. Then, the outsourcing management group organizes the inspectors cautiously. The two sides fix the checking time, place, participant etc. The inspectors examine the product to ensure that the product is complete and correct. And the inspectors write down the checking results in the Outsourcing Contract Receiving Report.

Product delivery

When all the products have been checked as qualified products. The vender delivers the products to the outsourcing management group. And the responsible persons of both sides sign on the contract to confirm.

From: http://news.at0086.com/China-Outsourcing-Services/The-Brief-Introduction-of-China-s-Software-Outsourcing-Procedure.html

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