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By Liang Xiaoliang & Zhang Yi
Recently, when taking part in the 3rd China International BPO (Business Process Outsourcing) Conference held in Xi'an, Shaanxi Province - one of China's ancient capitals, the reporters have heard many stories of "transfer" and "choosing".
ACE Insurance from Japan is the biggest insurance enterprise in Japan. Due to the expansion of their business and the high costs in Japan, they have to transfer some of their basic data-processing tasks and system maintenance abroad so as to hire more professional people to help them do such things. Having conducted reviews, they chose the Xi'an Branch of UFIDA Software Co., Ltd.
Low costs are a key advantage of Xi'an. Jing Junhai, Director of the Administrative Committee of Xi'an Economic & Technological Development Zone, said, "I dare forecast that in the coming years, the largest enterprise in Xi'an will not be a manufacturing enterprise but a service outsourcing enterprise."
In 2005, the scale of the global service outsourcing market has amounted to US$624.4 billion, up 6 percent year on year.
It is forecast that in the coming years, the global outsourcing market will increase at a rate of 30 to 40 percent with the scale amounting to US$1.2 trillion by 2007. When the reporters asked David Tapper, IDC's program director for the Outsourcing, Utility and Offshore Services research team, what the outsourcers of outsourced services are most concerned about, his answer is "Costs and price".
Mr. Yan Jianfu, a traveling merchant from Singapore who came to attend the 3rd China International BPO Conference, said, "The costs for a BPO order in a city like Xi'an are only a quarter of the costs for such a BPO order in Europe and USA."
Jing Junhai, Director of the Administrative Committee of Xi'an Economic & Technological Development Zone, introduced Xi'an's advantage in low costs to anyone that he met that Xi'an's low costs have two meanings: firstly, the costs of employment are low. There are 37 public universities in Xi'an, and Xi'an ranks the third (Beijing and Shanghai ranks the first and second respectively) in China in terms of the comprehensive strength so far as talent reserves are concerned and there are 180,000 graduates from colleges and universities waiting to get employed each year. Among the 672 research institutes in Xi'an, one third are engaged in studies on Information Technology, communication and software technology while the index of human resource flow rate is comparatively low ?? Secondly, the cost of urban living index in Xi'an is the lowest among the 9 key software cities in China.
Service outsourcing is an opportunity! But such an opportunity is especially important for an inland city like Xi'an. Chen Baogen, the Acting Mayor of Xi'an, even proposed that "The city will make every effort to develop its software service outsourcing industry".
The construction of infrastructure facilities is what almost all investors and partners are concerned about. In certain countries in Southeast Asia, many multinationals would get their generators prepared so as to respond to the frequent power cuts. But the electricity supply pattern of "Two-Way Main Supply" in Xi'an Economic & Technological Development Zone is a very striking point for software enterprises that have a higher requirement on the context for electricity use.
The most important point and also the most critical point for the development of service outsourcing is the environment for digital communications, i.e. ensuring a highly reliable and high-speed access of the local Internet to the international Internet. At present,[link widoczny dla zalogowanych], two 155megawatt special lines have been connected from Xi'an to the international port of China Telecom; in the meantime, priority-degree ensuring measures will be adopted. As a result, the communication conditions of Xi'an Economic & Technological Development Zone are second to none among all software zones in China.
Talent cultivation is the focus of focuses. Although Xi'an is obviously advantageous in terms of talents, Xi'an still takes the cultivation of talents as the focus of focuses. In allusion to the direction of development for the industry and the features of demands for talents, Xi'an has planned the system of cultivating talents for software service outsourcing in a comprehensive way, set up a universal norm for education and training and a universal system of quality control while emphasizing particularly on the cultivation of talents of the application type and skilled talents. Each year, Xi'an will invest no less than RMB30 million yuan in constructing the first information service institute in China after a base for professional internship and trainings,[link widoczny dla zalogowanych], which is centered around the Xi'an Software Zone, has been constructed.
There will be 200,000 people engaged in BPO. Xi'an has a fine plan for itself in the global BPO industry. Mr. Mao Ailiang, Director of the Xi'an Software Park,[link widoczny dla zalogowanych], said, "We promise to latent investors and clients of the burgeoning BPO business in Xi'an that we are serious in our pursuit for our objectives in BPO." From 2006 to 2010, Xi'an will introduce in 30 service outsourcing multinational companies. By 2010, there will be a service outsourcing enterprise with over 10,000 staff members, 20 service outsourcing enterprises with over 1,000 staff members, and 100 service outsourcing enterprises with over 100 staff members. Xi'an will cultivate an industrial labor force of 200,000 people and realize a sales revenue of RMB 40 billion yuan from service outsourcing.
Although BPO has just begun in China now, it is just like what Qu Jiadong, President of Lucent Worldwide Services (Greater China) has said: only a latecomer can develop a new style of himself.