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13.04.06 15:39

56413 Postings, 6181 Tage LibudaDie Investmentidee vom Feinsten

News & Events

Outclassed by China in Outsourcing


Mumbai, April 11 : Which is the world?s favorite outsourcing destination? India? Forget it. It?s mainland China.

India has been thumping its chest and proclaiming itself as the king of the outsourcing world ? except that China has quietly stolen the crown.

A survey carried out by global consultancy firm Grant Thornton busts a lot of the myths that surround global businesses. The $36-billion Indian outsourcing industry isn?t the top dog anymore.

The survey says close to 31 per cent of the global businessmen have already transferred or are planning to transfer operations to China. India comes next with 27 per cent, followed by Mexico (8 per cent) and Malaysia (5 per cent), the survey said.

India trails China on a large number of parameters save one: optimism. The survey says business owners in India ? 93 per cent of the respondents ? are the most optimistic about the outlook for the country?s economy over the next 12 months. Mainland China trails at number four.

But the hay has already turned into gold just next door: to begin with, nearly one in five medium-sized businesses now import from mainland China. More than a third of mid-sized businesses in NAFTA (US, Canada and Mexico) and East Asia said they perceive China both as a threat and an opportunity.

Almost 18 per cent of the respondents perceived China to be the biggest opportunity, while only 3 per cent considered India to be a big opportunity, says the report.

Not only that, 34 per cent of the business owners surveyed in the US considered China as a great opportunity compared with 6 per cent who considered India as hot. And the bad news for India doesn?t end there. Close to 11 per cent of the UK respondents voted for China compared with 2 per cent for India. The global average stands at 18 per cent for China and 3 per cent for India.

The Chinese also believe a lot more than the Indians in Brand China as just 9 per cent of Chinese business owners have plans to import from India compared with 27 per cent of Indian businessmen who have plans to import from China. And this is not just restricted to the two close neighbours. While 31 per cent of the surveyed US businessmen have plans to import from China, the number dwindles down to just 19 per cent when it comes to India.

The percentage of business owners in most of the 30 countries surveyed exporting to China or having plans to export to China is much higher than compared to India, says the survey report.

But all?s not lost for India. The Chinese businessman is equally worried about the financial constraints to international expansion. While 24 per cent of Chinese businessmen feel the heat, close to 25 per cent of Indian businessmen worry about money.

But China lags behind in transportation. Close to 26 per cent of Chinese businessmen feel that transportation is a constrain compared with only 18 per cent in India.

However, political and social instability is more or less the same in China and India. © Freeborders 2006, All Rights Reserved  

13.04.06 16:01

56413 Postings, 6181 Tage LibudaThe next big offshorer?

Der Text ist ein Jahr alt und die Entwicklung ist weitergelaufen - aber Ihr könnt ja rechnen.

March 29, 2005 1:21 PM PST
Could San Francisco-based Freeborders be the most important outsourcer you've never heard of?
The company is aiming to be the biggest operation in China providing application development services to clients outside the country. And the numbers show it is making progress. Freeborders, founded about four years ago, doubled both its revenue and head count last year, and it now has about 370 employees working out of Shenzhen, China. The company is adding about 60 people per month, according to co-CEO John Cestar.

Even so, Freeborders is up against some stiff competition. India-based outsourcing giants such as Infosys appear eager to establish themselves in the Chinese software outsourcing industry, a field that has been fragmented.

One of Freeborders' secret weapons, though, is its human resources approach, Cestar says. While Indian companies are using Indian managers in China, Freeborders uses Chinese nationals (who've spent time abroad) to minimize morale problems, he said.

Cestar said he got a firsthand lesson about the difficulties foreigners face trying to manage Chinese employees while working on a project to buy software companies in the country some years ago.

While that effort centered on selling to the Chinese domestic market, Freeborders is focused squarely on international clients. The company already has snagged big-league customers such as Target and DuPont and is now going after financial services companies.

Although revenue from information technology services is rising in China, it is barely half of India's $12.7 billion a year, according to a recent report from consulting firm McKinsey.

Cestar, though, argues that offshoring to China potentially is as big or bigger than offshoring to India, thanks partly to a lack of wage inflation in the world's biggest country.

"In the next 18 to 20 months, the Infosys of China will emerge," he said.

Freeborders seems to be in the running for that title.


13.04.06 16:08

56413 Postings, 6181 Tage LibudaAdvantage China

China begins to offer better comparative advantages over India

Companies opt for China when considering offshore software outsourcing

April 13, 2005

With a huge talent pool and a constantly improving infrastructure, China has attracted global companies from different business sectors to set up their manufacturing base there. Software outsourcing business is a recent example of rapid development in China. Freeborders is a US-based IT and software application development outsourcing provider. By setting up its operational base in China, Freeborders undertakes US and European offshore outsourcing projects, while enjoying the cost benefits offered by China.

Freeborders CEO John Cestar said China was fast becoming a major market for offshore software outsourcing. He believed that though China is a late starter in the business when compared with India, it has begun to catch up with India in various aspects and is very likely to replace India in the future. That?s why Freeborders decided to launch its business in China.

There were a number of concerns on the development of software outsourcing in China, such as the low English command, intellectual property issues, and the poor programming quality resulting from low tech environments. Cestar believed the above problems have been overcome and therefore are no longer obstacles for China in developing its software outsourcing industry.

Cestar pointed out that the command of English by Chinese university graduates has greatly improved, and Chinese software talents have very good skill sets.

When handling intellectual property rights in China, Cestar said stringent process management is the key, with process control is the company?s main focus. There is no possibility of disclosing intellectual property.

Cestar said that it is a challenge to engage in offshore outsourcing business, and he has to meet a number of requirements before gaining the clients? confidence. To facilitate communication with clients, the company sets up offices in the countries or cities where its clients operate. Good development process management is also very important.

When asked about what is the major challenge of developing this business in China, Cestar said it was the lack of management talent. According to Cestar, there are currently very few management talent who are experienced in managing software outsourcing business in China. Freeborders is employing two methods to solve this problem. First, to recruit overseas IT talent who have a good knowledge of the China market, such as Chinese nationals with several years of work experience in US or Europe. Second is to headhunt suitable IT talents from China offices of multinational technology companies.


13.04.06 17:27

56413 Postings, 6181 Tage LibudaChina Infosys


Capacity to increase by 50% in early Q1 2006

SHENZHEN, CHINA-December 6, 2005-Freeborders, a leading technology outsourcing provider from China, announced today at Gartner's China Outsourcing Summit that expansion of its technology center in Shenzhen is well underway and the first phase of construction will be completed in early Q1 2006. Capacity is expected to increase by 50% immediately to over 600 seats.

"The construction is going extremely well and is on schedule," said Fang Liang, President, Asia, Freeborders. "The expanded facility is a significant milestone for the company and will help us accommodate the increased demand from our clients for outsourced solutions."

Freeborders announced in September that it would expand its state-of-the-art technology center after it secured $20 million in expansion capital from new investor FTVentures and existing investors Internet Capital Group and TAL Investments. The 52,000 square-foot technology center will include dedicated work spaces for client teams, client offices, heightened security infrastructure and cutting-edge broadband connectivity.

The expansion of the Shenzhen facility is a reflection of Freeborders' growing business in the US and European markets. "The Chinese outsourcing industry is poised to become a dominant outsourcing location," Liang said. "We have the talent and our infrastructure is world-class. Our education system produces engineers of the highest quality and we adhere to international standards in project management.

With Western companies keen to enter the China market, Liang sees this development as another factor that will drive the growth of the outsourcing market. "Investing into China is the number one priority for many US and European MNCs. It is only natural for a Western company to want to work with partners that understand the Chinese market and the Chinese way of doing things. For Freeborders, having client touchpoints in the US and Europe will again put us in good position when US and European companies target the China market."

Freeborders China development center is located on High Tech Industrial Park North in the NanShan District of Shenzhen. Work on the next construction phase will begin sometime in 2006.

About Freeborders

Freeborders is the leading provider of technology solutions and outsourcing from China. Freeborders provides vertical expertise to North American and European companies in financial services, technology and retail/consumer goods. Headquartered in San Francisco with offices in three continents, Freeborders has developed a track record of service delivery to the Fortune 1000 by combining world-class project management in both hemispheres with one of the largest technology centers in China. Freeborders believes China's massive and growing supply of IT talent and the country's emerging importance in the global supply chain make China a strategic imperative for any company seeking cost-effective world-class technology solutions.


14.04.06 00:15

56413 Postings, 6181 Tage LibudaThe next big thing

By Dian Schaffhauser

When Freeborders announced in September 2005 that it was receiving an infusion of $20 million from existing and new investors, it was a hefty endorsement of that company’s business model and track record as a US-China IT service provider.

Funding came from existing investors TAL Investments, a division of TAL Group, one of the largest apparel manufacturers in the world, and Internet Capital Group, a venture fund that targets B2B e-commerce companies, as well as new investor FTVentures, a consortium of financial services firms.

Sourcingmag.com recently spoke with co-CEO John Cestar to learn how the company intends to use the money and just what the business model is. Along the way, he explained the nuances of delivering services to the retail and financial industries and how the company will grow to a thousand people by the end of 2006.

Can you explain what this latest investment is about?

John Cestar:
We were founded on the premise that we could build software in China for delivery to major industries here in the US. The economics for doing that are extremely attractive for clients. At the time -- in 2000 -- you couldn’t get a financial services firm to do that. They were too nervous about China. India at that time was extremely cost effective and successful. So most financial services firms were not interested [in China].

The industry that was interested was retail. It kind of makes sense. Retailers have been working in China for decades. Many of them have infrastructure in China. They’ve been getting their core products from China. China’s no big mystery to most big global retailers. They felt comfortable having their software products built and delivered from China as well...

Our initial investment went to building out the retail vertical of the business. So we invested in hiring retail experts here in the US, because it’s not enough to have engineers in China to build software. If you do that, you’re just a commodity. You have to really have industry-specific business process experts here in the US to drive strong results.

We did that and gained process maturity.

In what kinds of projects?
At that time, most custom non-packaged software the retailers were consuming was and continues to be on the supply chain side of the business. Retailers will buy a package to manage retail point of sale, for example, or buy a package to manage CRM -- customer-facing software.

Retail supply chains are extremely complicated, and retailers typically build large custom systems around categories like PLM, which we specialize in -- product lifecycle management -- around workflow and other supply chain management applications, plus applications that touch logistics and integrate into ERP systems...

Retailers see that as strategic to their businesses. We’ve got 30 retail clients in this business. They all approach it differently. They all have some twist on it that they see as competitively important. Which is why vendors have not succeeded at selling fixed packages on the supply side to retail.

Is that retail vertical business coming from the US or China reps?
[TAL Apparel Group] is an investor. They are part of this $20 million expansion round. TAL is one of the largest retail products manufacturers in the world. [Major customers include Brooks Brothers, L.L. Bean, J.C. Penney, Giordano, Land’s End, Liz Claiborne., Nautica and Tommy Hilfiger.] They’re a private company. They are extremely profitable and strategic to retailers.

Fountain Set is another one. Fountain Set produces 50% of the Gap’s knit fabric. It’s the largest fabric supplier in the world. They’re a shareholder in the company.

What’s going on in retail is a concentration of strategic work with highly technology-enabled partners. It’s kind of the opposite of what went on [in retail] in the early ’80s -- which was, just find more sources of supply, cheaply.

So we were...able to attack the market with a deep knowledge of how key strategic suppliers need to communicate with retailers here in the US.

How do you make the leap to providing services for financial services firms then?
The core strategic value that we have developed is the ability to build complex software products from scratch in China for delivery to the US. That requires a huge degree of process maturity. We work differently today than we did five years ago. Five years ago in China our infrastructure wasn’t as automated as it is now. We were much more focused on heavy lifting -- everybody jump on a new project and do it to perfection. Now we’ve got serious process maturity and repeatability...

Those processes do migrate to other industries well. We’ve completed major work for financial services firms, and the key is bringing on front end talent here in the US -- but using the same processes for defining requirements, getting technical specs to China, communicating well in a formal process with the engineers in China, then delivering back and implementing in the US... It’s all around process maturity.

We’re in the final evaluation for [Capability Maturity Model Integration (CMMI)] level 5. We should have it in December... We’ve had our auditors living with us for two years. And the audit firm is from India because CMMI -- as a value -- was really developed and proven by the major outsourcing firms in India. We realized we didn’t want to have an auditor from China who was basically looking for us to get to Level 5 as a marketing matter.

Why are financial services so important to your company?
FTVentures [is] a special kind of firm. [Their] limited partners -- people who gave them the capital to invest -- are the 33 largest financial services firm in the world -- everybody from Citigroup to UBS to Deutsche Bank to JP Morgan. They really are a consortium of financial services firms with a mission of giving companies expansion capital to deliver services to financial services.

Delivering technologies to financial services requires the same degree of industry knowledge as delivering in retail. If you’re going to work on a supply chain in retail, you’re going to have to know how the retail supply chain really works. If you’re going to work on a core banking system, a trading system, a cash management system -- whatever in financial services -- you really need to have the industry expertise to have credibility.

We were interested in their partnership, in their ability to recruit top talent, in their track record in building outsourcing services firms. You can see on their Web site, they’ve built some successful firms in India that deliver services to Wall Street firms.

The reason [the financial services firms] invested in FTVentures was to turn around and be the client for the firms that FT [funds]. It’s a virtuous circle. It’s really the bank’s money. The banks give it to FT to decide where to place it, and then the banks become customers of the companies that FT invests in.

We’re not exclusive to financial services. But in our business, you say, “Hey, let’s not reinvent the business model. India did it.” ...The top Indian firms work in multiple verticals, not just one. Of the top five Indian firms, financial services is the largest vertical. The reason is, there’s huge profit. Financial services firms dedicate a large percent of their budgets to IT and outsourcing.

I think last year, there was about $12 billion that went from the US to the firms in India... Half of it was from Wall Street.

Most major Wall Street firms decide, we are going to outsource. Then it’s a question of, what are we outsourcing? What are we keeping in-house? How strategic do we get with our outsourcing firms? Do we throw projects over the wall? Or do we actually bring them inside our firewall? So from China, they’re inside our firewall in NY and can do large-scale maintenance and integration work. It’s really a co-sourcing or co-location model. That’s where you get groups like Infosys inside Merrill Lynch. Merrill Lynch has got 2,000 people at Infosys.

Who’s your competition?
If you go in the Internet and put in “China software outsourcing” or “China solutions outsourcing,” you’ll see a bunch of entrepreneurs from China who have no understanding of how major global companies consume services... Lots of companies that are working in the China market are not sophisticated enough in terms of their process, in terms of their English language, in terms of their business knowledge [or] knowledge of how major western clients work, to deliver to them.

[So the competition] really is the guys from India.

Now, China has an advantage over India that’s significant. We’re not saying that all the business in the world is going to move from India to China. But China is more cost effective than India, significantly. And part of that is what I call “the disease of success.” India has been so successful, it’s gone haywire. So many firms are out there now, and there’s been wage inflation. There’s been a lot of turnover at the firms. And the clients feel this. India firms are passing on price increases to clients, because their own wage bases have gone up 60% in the last 18 months.

That’s driving people to look at China for the first time.

Also, more importantly, in the financial services world, there’s the sense that major firms got overcommitted to India. Just as a matter of risk mitigation and diversification -- they are bankers after all -- they need to send 5%, 15%, half of it, whatever the number, to China. They have to diversify away from India a bit.

The only place where you can get the kind of scale that you can get in India is China.

What are your goals?
We have 400 [people] now in China. We plan to be at a thousand in 12 months. We’re hiring between 30 and 50 people a month. And we’re being selective in hiring. The good news is the talent pool is huge and well qualified. The education system is producing results. More importantly, multi-nationals are training good technologists in China.

So IBM has huge facilities in China. Microsoft has huge facilities in China. What they’re doing is not what we’re doing, which is offering talent from China to the rest of the world. They’re taking Microsoft products from the US and using teams from China to localize that product for the China market.

Since we started four years ago, what’s gone on in China is a dramatic shift in multi-nationals going to China. There’s not an industry in the US today that has not identified China as their number one growth story. Four years ago, Microsoft had 50 people in China. Now it’s 5,000.

It’s enabled us to tap into that. It’s great training. We’ve hired many people from multi-nationals.

They know as technologists that their careers become valuable if two things happen: One, if they work in an English-speaking environment. So if you’re localizing an IBM product for China, you’re speaking Chinese, you’re delivering a product for the Chinese market that’s Chinese-based. English is important. The other is the opportunity to work for multiple western-based clients outside of China. You know if you’re delivering to a major bank in NY and you succeed, that is a major accomplishment and career builder.

What is recruiting like in China vs. the US?
...The key to success in operating in China is not having expatriates run the technology facilities. Expatriates meaning Americans, Indians, anybody outside of China.

What’s lacking in China -- which is true of many developing economies, but particularly in China -- there are outstanding technologists -- world-class. We have many clients who will attest to that. The challenge is identifying and recruiting good senior managers, who know what it means to be good custodians over someone else’s assets, not theirs.

Part of it is the history of the country. There are many bureaucrats in that economy... In the US, on the left hand side [of a bell curve], there are relatively few bureaucrats in our economy as a percent of the working population. Relatively few people work in government. Most people work in the middle, and professional management. And we have relatively few entrepreneurs on the right hand side as a percent of the working population. China is the exact reverse of that curve. There’s a huge group of bureaucrats who are well trained technologists, who work for state-owned industries. And they want to make the leap to a private company. But if you hire those guys, nothing gets done. They just don’t know how to deliver the quality. On the right hand side of the curve, there’s a huge group of entrepreneurs in China, but if you’re going to rest your company’s fortunes on that group, it’s a big risk. You’re not really sure what they’re up to. In the middle of the curve, there’s a tiny group of professional managers.

We spend all of our effort, identifying, recruiting, training and retaining those people. Initially we recruited at the top -- 20 people from the US who were Chinese citizens, who were from the US or Canada or Europe who were on H-1 visas or some kind of visas and working for western software companies... They had a taste for how western clients consumed technology services.

So we were able to populate our initial management ranks in China with those people.

Then [those management groups] spend a great deal of effort identifying and recruiting in China.

We’re well known in China. Where we are in Shenzhen -- in southern China, fairly close to Hong Kong -- [there’s a] national draw. If you go around the facility and ask people where they’re from, nobody’s from Shenzhen. But they all go there because of the opportunity and because major firms like IBM and Microsoft are set up there.

We recruit through our network in China. We use Web sites. We use job fairs. We do use recruiters as well...

Last year, we went through 20,000 applications and invited 3,400 for first-round interviews and testing. We invited 800 back for second round interviews and further testing. We gave 200 offers and 170 accepted.

What we were recruiting for last year, we definitely emphasized English language. People must speak English as well as being strong technologists. We tie our comp plan to demonstrating increasingly proficient English skills. You can be a great technologist, but if you can’t pass a level 2 English exam that’s online, then you don’t get your comp.

...We do a lot of training around how to speak with clients. What clients are concerned about, how to ask questions, how to listen. These things are not obvious to people who are good technologists in China but haven’t worked with Western clients...

What are the US-based folks doing?
We’re working in three distinct industries: financial services, retail and high tech. The main expert [for retail, for example,] used to run the women’s business at Levi Strauss & Co. She has a couple of decades in retail. All of our retail team has great degree of retail credibility and business credibility. So what they do is initiate discussions with the client. Clients typically are very vague in the beginning: “We need a system to coordinate with 10 suppliers.” It’s the CIO’s job and his or her team’s job to translate that mandate into a technology project that meets the needs of the end users and that works and that is cost effective.

The industry experts on the front end will work with the business users to really flesh out what the use of this product is, will define the high-level requirements, will drive those high-level requirements into detailed use cases and detailed functional specs.

Ultimately those specifications are transferred in standardized documents we’ve developed over the years to a team lead in China...someone with eight to 12 years of experience in application development and in running teams. That team lead will take the hand-off.

And we have deployed in China solutions managers who will get assigned to the project as well, who will clarify any questions on the spot in China about requirements, will build a sizing plan and execute against the documentation.

Sizing is the key to the whole thing. It’s the key to setting the project delivery schedule, setting customer expectations, it’s the key to pricing. And we are very highly productive in China. Yet we don’t push people 80 hours a day. It’s important to setting client expectations.

Most of the clients take our deliverables and use them in their business. If we slip on timelines, it’s very painful for them. We’ve gotten sophisticated about understanding, “OK, in a product cycle in this retailer, they need this system in place by June 1st, in order to hit a Jan. 1 set of deliveries that need to be in stores by May 15th.” The implications of our delivery slipping is major for their business because we understand how that retailer deploys software. We understand that retailer’s own merchandising calendar.

One of the reasons our growth has been so swift is that we are close to the client, and we make decisions close to the client. We push decision authority in this organization down to client partners who live with our clients.

We’re doing the same with financial services. We’ve been building HR systems for financial services most recently. And the whole compliance area in financial services is a very big growth area. [Sarbanes-Oxley] is a subset of that.

Like retailers, financial services firms are global. They work in many different geographies and legal environments.

We’re working on a number of systems that give early warnings to managers back in the US if managers in a different country are out of compliance, either with specifics of regulations in that country or with the global regulations internally at the bank. So it’s these training systems that will ask critical questions of key managers every week. [As a manager] you’re able to understand pretty quickly if their understanding of regulations is sufficient. And if not, you get them additional training.

What systems are you using?
We’re heavy users of Skype. We’re heavy users of formalized process. If you start talking informally on the phone -- you can do that to clarify specific issues, but if that’s the process, there will be communication error. If we’re ever off a 10th of a degree in a delivery, it’s because of communication errors. You want to squeeze out all communication error. So we have documentation and processes around issue resolution, around decision checkpoints, around escalation procedures. We constantly train on and reinforce process. You cannot work in an ad hoc way.

We’ve invested in systems to do it, very sophisticated software systems from companies like [IBM Rational Software] and others that help to put a workflow process around issue resolution.

Talk about intellectual property. I can see it be important to financial services, but retail?
I think the whole category needs to be taken very, very seriously. I wouldn’t want to distinguish between industries. It is true, if you build a complex back end system [for retail], there’s no commercial value to anybody. You’re not going to sell that thing on the streets of Shenzhen. But at the same time, these systems are delivering competitive advantage to the client. They don’t want any of that knowledge going anywhere else.

It’s important that we have security inside our facility... When you come to our facility, it looks like it’s in San Jose CA. It happens to be in China. It happens to enjoy the world’s most cost-effective environment for doing this kind of work. The teams are dedicated and the infrastructure is secure. And there’s no chance that work from one client is suddenly going to show up in the environment of another client. We encourage our clients to visit us. This is a big reason we’ve grown so swiftly. When people do come to visit, they say, “Wow, this place does look like it could be in California.”

For example, there is no paper. You will not see a scrap of paper. No one can bring anything in, no one can bring anything out. Everyone is searched on the way in and on the way out. We have no USB ports. They’re all blocked out. You can’t email, except for dedicated people in dedicated rooms.

...It looks almost like we’ve gone too far. The people in China weren’t used to that. [They’d say,] “What are we building in this place?” It looks like a government lockdown.

Now it’s clear, you’re working on important work. This work you’re doing is for the world’s largest companies. And it’s strategic and competitive to them. It actually adds seriousness to the environment. It’s like if you wear a suit to work, you probably act more serious than if you wear jeans.

So what is the dress code?
...We don’t require people to wear coat and tie, but everybody has to wear a collared shirt with slacks. No short skirts.

At first, people said, “Wait a minute. We’re executing over here. We can’t be marketing.” And we said, “No, no. You may not be explicitly marketing, but this facility is a big part of our company’s presentation, because people want to come see it.”

We want to squeeze out the whole thing that this is a college all-nighter. It’s not a college all-nighter. It’s a professional environment. We’re going to do all we can to eliminate all the heavy lifting. We want to run a facility that’s highly automated. The work is very professional, but well meted out, well planned. We’re not having a lot of crisis. It’s not a success in my view if we have to get our best people around a problem, stay up all night for three days, to deliver to the client, even if the client is happy. That’s too much heavy lifting.

Useful Links:

An interview with Freeborders' other co-CEO, Ramsey Walker

How To Start Working with China (18 Practical Tips)

TAL Group


Internet Capital Group

About the Author:
Dian Schaffhauser is the editor and publisher of Sourcingmag.com. Contact Dian at dian (at) sourcingmag.com.

Copyright © 2003-2006 – Sourcingmag.com, CTQ Media LLC. All Rights Reserved
Reproduction Without Permission Is Strictly Prohibited – Request Permission

14.04.06 12:17

56413 Postings, 6181 Tage LibudaDas Muster für Freeborders

Darüber konnte man diese Woche in deutschen Zeitungen lesen:

"Infosys ist ein Senkrechtstarter. Im Jahr 1999 kam der Konzern aus Bangaloren erst 100 Millionen Umsatz. Im abgelaufenen Geschäftsjahr durchbrach Infosys die Schwelle von zwei Milliarden Dollar. Indiens bekanntester IT-Dienstleister ist mit einer Nettogewinnmarge von 27% auch der profitabelste und wächst jährlich mehr als ein Drittel."  

14.04.06 20:55

56413 Postings, 6181 Tage LibudaCo-CEO: We think there will be an Infosys of China

, and we think we will be it". Wir Ihr dem nachstehenden Artikel entnehmen könnt, ist die Geschichte mit Infosys keine Erfindung von Libuda, sondern die Aussage eines der beiden Chief Excutives Officers.

12 December 2005 by Dian Schaffhauser Printable version  |  Email to a friend  
The Other Freeborders Interview

What do you do when you interview somebody and you don’t quite get the article you expected out of it? You blog, of course.

And that’s the case with my interview with Ramsey Walker, co-CEO of Freeborders. I profile Freeborders in “Inside a Service Provider: Freeborders Shares Its China Growth Plans.” (The company offers services to clients in the retail, financial services and software segments, with most of its operations in Shenzhen, China.) But that article is based on a second interview I did, this time with co-CEO John Cestar. Since I couldn’t figure out a smooth way to integrate some of the more relevant comments from Mr. Walker into that article, I present them here...

What’s your strategy? To grow big and get sucked up by somebody else?
Ramsey Walker:
We think there will be an Infosys of China, and we think we will be it. And if we are the Infosys of China, then we don’t need to be sucked up by anybody -- we will be doing the buying. That is really the strategy, to be the Infosys of China...

What is the state of the China development market right now? What does it look like to you?
There is just a huge new supply of qualified, educated technical programmers coming out of schools, coming out of some of the captive sites that Microsoft and others have set up. So what we see is just a tremendously educated, tremendously motivated supply of labor. That is enormously attractive to US and European and rest-of-the-world clients. So, start with the labor pool.

Behind that is, of course, an education system, and the education system in China is outstanding and really very horizontal. Unlike India, where you have much more elite type of an education system with relatively few people coming out of [one of the Indian Institutes of Technology] schools and some of the other [schools], China is much more broad, and so that is driving the labor supply.

The other aspect is no one has broken out on the vender side with any kind of scale. We think we are in the process of doing that. What I mean by that is real scale -- in this business, many thousands of people, not 50, not 100, not even a couple of hundred. It is many thousands of people. We will have 700 or more by the end of this year -- between 1,000 and 2,000 next year. We have Fortune 100, Fortune 1000 customers today, and we are simply adding to that.

We are optimistic both on the supply side and on the competitive landscape and on the demand side.

When you talk about the China market, there is a focus on regions. How do clients even decide? Is it the case that most of the US or European companies going over there are looking for sourcing solutions and are sticking with regions where they have already got a toehold through their manufacturing?
We are in Shenzhen -- right across from Hong Kong, a 40-minute ferry boat ride. That is a tremendous advantage. It has 11 million people. It is obviously a big city. It has increasing amounts of first-world infrastructure. In Shenzhen there are a couple of advantages. Number one, the supply of labor is strong. It is a point of attraction for many of the regions all around China, people coming into Shenzhen.

Number two, the proximity to Hong Kong is a tremendous advantage for us because customers are coming to Hong Kong all the time. They either tack on this trip, or they come to see us and then they will tack on other stuff. They are in Hong Kong, the business center of the world and so it is very easy for them.

The costs in Shanghai are actually higher, and the supply is lower. Beijing, to be honest, I don’t have the statistics on.

What kinds of mistakes are American companies making around doing business with China?
One mistake would be to drop a bunch of westerners in to manage the operation. That is not what we have done. We have used Chinese nationals to manage the team there. That is one thing -- how you set up the organization.

Two is, of course, respecting the culture, respecting the holidays. Don’t force them to buy US holidays and that sort of thing.

I think the other thing is to recognize that doing work offshore is not the same as doing work onshore. You don’t get the water cooler conversations. You need to have really well documented processes to succeed.

Wie kann man da dabei sein? Auf dem Hot Stock Board erkläre ich, wie man bei einer der vermutlich hottesten Anlagemöglichkeiten in 2006 dabei sein kann.


15.04.06 20:06

56413 Postings, 6181 Tage LibudaWarum Freeborders in 10 Jahren Infosys abgehängt

haben könnte, könnt Ihr hier lesen:


16.04.06 18:05

56413 Postings, 6181 Tage LibudaONE OF 'TOP 5 TO WATCH IN CHINA' : #2 on the list

Global Services magazine names Freeborders to its
2006 Global Services 100

San Francisco, CA - January 31, 2006 - Freeborders, a leading technology outsourcing provider from China, announced that Global Services magazine has selected the company as one of the Top 5 to Watch in China as part of its 2006 Global Services 100 awards. Freeborders was ranked . This ranking is the result of Freeborders' dedication to world-class project management, its track record of service delivery to US and European companies and its innovative business practices.

"Freeborders is honored to be included in this year's Global Services 100 list," said John Cestar, co-CEO of Freeborders. "We are also pleased to be distinguished as one of the emerging outsourcing providers from China. This ranking affirms our leadership, innovation and ability to meet the needs of the rapidly evolving outsourcing market. We're looking forward to further growth in 2006 and beyond."

The Global Services 100 honors the top performers in information technology and business process outsourcing. The list is the result of a study conducted by Global Services in conjunction with neoIT, a consulting firm specializing in services globalization. The list was previously called the Offshore 100 and was published by CMP Media's Managing Offshore magazine, which is now a part of Global Services. The listed companies will be honored at a conference in New York City on February 2, 2006. A complete list of this year's winners can be found at http://www.globalservicesmedia.com/.

About Freeborders

Freeborders is a leading provider of technology solutions and outsourcing from China. Freeborders provides industry expertise to North American and European companies in financial services, technology, retail/consumer goods, manufacturing and transportation & logistics. Headquartered in San Francisco with offices on three continents, Freeborders has developed a track record of service delivery to the Fortune 1000 by combining world-class project management in both hemispheres with one of the largest technology centers in China. Freeborders believes China's massive and growing supply of IT talent and the country's emerging importance in the global supply chain make China a strategic imperative for any company seeking cost-effective world-class technology solutions.

16.04.06 18:36

56413 Postings, 6181 Tage LibudaUnd ein IPO steht vor der Haustür

Ähnliches wie Freeborders planen noch andere, aber Freeborders dürfte die Nase vorn haben: "Others in the market include global giants like IBM , Hewlett-Packard Co. , BearingPoint  and India's Infosys , along with Shenzhen-based Freeborders, another start-up that told Reuters last week it hoped to go public in the 'not-too-distant' future, with hopes of achieving a market capitalisation of $1 billion or more." Das mit der Milliarde halte ich allerdings für übertrieben.

Augmentum aims to build China software giant

By Doug Young and David Lin

SHANGHAI, Feb 13 (Reuters) - Software outsourcing start-up Augmentum is turning up the heat on its Indian rivals, with plans to build a China-based juggernaut boasting 40,000 employees and $1 billion in annual sales by 2013.

The three-year-old firm is on a rapid growth trajectory that saw revenues double last year to more than $12 million, with a target of doubling that figure again every 12 to 18 months through 2013, chairman Leonard Liu told Reuters in an interview on Monday at the company's China headquarters in Shanghai.

He said Augmentum, which counts Motorola  and Microsoft  among its clients, began with 50 engineers at its Shanghai design centre in its first year, growing to 200 people in 2004 and 400 at the end of last year.

'We expect to have 600 people by the middle of this year,' said Liu, a China-born software engineer who emigrated to the United States by way of Taiwan, returning to Shanghai after opening Augmentum in 2003.

'In the summer we'll open another site in Beijing, and by year-end we'll have 800 people. ... My plan is to reach $1 billion in revenue by 2013. We have a target for 40,000 people in China by then. If you double each year you can get that big.'

Those numbers would pit Augmentum against India's biggest software outsourcing company, Tata Consultancy Services , which logged $740 million in revenues in its most recent reporting quarter and previously said it expects to have about 60,000 employees by the middle of this year.

Augmentum, which is aiming for an initial public offering in 2008 or 2009, is joining a growing bandwagon of start-ups and global software makers trying to tap into China, with its highly educated workforce and fast growing economy, the same way major companies began looking to India in the 1980s and '90s.

Others in the market include global giants like IBM , Hewlett-Packard Co. , BearingPoint  and India's Infosys , along with Shenzhen-based Freeborders, another start-up that told Reuters last week it hoped to go public in the 'not-too-distant' future, with hopes of achieving a market capitalisation of $1 billion or more.


All are chasing a Chinese software outsourcing market now worth about $1 billion in annual exports, but expected to grow rapidly over the next few years as multinationals look to diversify away from India where costs are rising rapidly.

Liu said that a Chinese software engineer in Shanghai now costs roughly 15 percent less than that for a comparable worker in India.

But he acknowledged that a Chinese staffer with good English skills can be up to 20 percent more expensive than one in India, where such skills are relatively common.

Poor language skills are just one of several issues that foreign companies complain about when setting up in China. Other problems include lack of practical employee experience, unreliable infrastructure and intellectual property theft.

Despite its rapid growth, Augmentum has managed to reach its current size solely with funding from its founders, and has not had to seek major venture capital due to the relatively low cost of a business where manpower is the main expense.

But with potential acquisitions in sight as it moves towards its aggressive growth targets, Liu said he would not rule out an equity stake sale or other fund raising in the run up to the planned IPO.

'This year or next we could acquire a company,' Liu said. 'Many software acquisitions are made using stock. I would rather use equity in our company (to finance a deal), but we could also find cash. Lots of people want to invest in our company.'

He declined to put a value on his company, but said the market currently values similar firms at five to 10 times revenue. Thus a revenue of $25 million this year would value the firm at up to $250 million even at this early stage of its life.

'I obviously think that a company in this area is worth a lot,' he said. ((Reuters Messaging: doug.young.reuters.com@reuters.net; +86 21 6104-1768))

17.04.06 11:50

56413 Postings, 6181 Tage LibudaWarum Freeborders eine Erfolgsgeschichte wird

kann man in der folgenden Passage aus dem nachstehenden Artikel nachlesen: "However, John Cestar, CEO and co-founder of Freeborders, said the pie has just gotten bigger. The U.S.-based IT and applications developer set up operations in China in 2001.

"It is the larger systems integrators which are servicing multinational corporations in China that may feel the heat."
-- Eugene Wee
IDC analystCurrently, "only a few companies" are capable of serving the "lucrative North American and European" markets--which India already serves--where MNCs require service providers with "English capabilities, strong management and experience", Cestar said."

Freeborders ist meines Erachtens die beste Gelegenheit an der Wiederholung der indischen Erfolgsgeschichte in Form der chinesischen Variante zu profitieren. Noch ist Freeborders nicht börsennotiert, aber es gibt eine Chance, sich im Vorfeld zu beteiligen. Die Internet Holding Internet Capital, für die ich auf dem Hot Stock Board einen Thread laufen habe, ist mit 33% an Freeborders beteiligt. Und bei der noch geringen Marktkapitalisierung von Internet Capital von "nur" 350 Millionen Dollar würde eine Börsengang von Freeborders gewaltig zu Buche schlagen.

"With India’s move into China, China's outsourcing industry has finally gained recognition and credibility," he said. "More knowledge will be passed on to the Chinese companies [which] will get better, and which will in turn bring in more business [for them]."

Indian outsourcers aren't a threat to Chinese players
By Vivian Yeo, ZDNet Asia
Thursday , January 19 2006 07:48 PM

The influx of Indian outsourcing service providers that have set up camp in China has validated the latter's rising status as a key outsourcing market. But are local players feeling the heat? According to industry observers, however, the pie is set to grow even bigger.

Indian outsourcers such as Tata Consultancy Services and Infosys in recent months announced their intentions to further expand and invest in China.

These companies would be looking to serve the needs of multinational corporations that have expanded to China, said Eugene Wee, IDC's Asia-Pacific senior analyst for services. As such, their emergence could be perceived as a threat particularly to China-based outsourcing service providers that currently cater to the MNC market, he noted.

"The great majority of systems integrators (SIs) in China have their energies focused on servicing the domestic market, and will not feel the heat as much from foreign competitors such as those from India, the United States and Europe," he explained. "It is the larger SIs which are servicing MNCs in China that may feel the heat."

MNCs with long-standing relationships with a foreign service provider may choose to continue the affiliation when the latter establishes operations in China, Wee said.

However, John Cestar, CEO and co-founder of Freeborders, said the pie has just gotten bigger. The U.S.-based IT and applications developer set up operations in China in 2001.

"It is the larger systems integrators which are servicing multinational corporations in China that may feel the heat."
-- Eugene Wee
IDC analystCurrently, "only a few companies" are capable of serving the "lucrative North American and European" markets--which India already serves--where MNCs require service providers with "English capabilities, strong management and experience", Cestar said.

"With India’s move into China, China's outsourcing industry has finally gained recognition and credibility," he said. "More knowledge will be passed on to the Chinese companies [which] will get better, and which will in turn bring in more business [for them]."

IDC's Wee agreed, noting that the trend presents an opportunity for Chinese service providers to "up their stakes and ramp up outsourcing capabilities as well as to get a better grasp of offshore delivery".

Local companies that are currently "doing well servicing local demand for application development" can also benefit from "spillover Indian business", given their lower-cost models, added Wee.

Players such as NCS, a Singapore-based systems integrator, are also unfazed by the competition from Indian outsourcing companies. NCS has offices and operations in various Chinese cities including business hubs Shanghai and Suzhou, Beijing and Chengdu.

NCS CEO Chong Yoke Sin told ZDNet Asia that as user demand grows, the service provider is increasingly looking at "more inland" cities such as Fuzhou, Chongqing and


18.04.06 12:35

56413 Postings, 6181 Tage LibudaDort kommt Freeborders ursprünglich her


Product Lifestyle Management gilt inzwischen als einer der aussichtsreichen Software-Bereiche. Dort kommt Freeborders urspünglich her und ist in seinem Spezialbereich in diesem Segment auch nachwievor der Weltmarktführer.

Aber man inzwischen in weitere Bereich diversifiziert, insbesondere in den Finanzdiensleistungsbereich.  

18.04.06 23:02

56413 Postings, 6181 Tage LibudaDie Kunden von Freeborders sind vom Feinsten

Im nachfolgenden eine Auswahl (Select Client List) der bekanntesten Kunden. Ich hatte ja im letzten Posting angeführt, dass Freeborders ursprünglich im Product Lifestyle-Sektor gestartet ist, daher auch der starke Retail Sektor. Bemerkenswert ist aber, wer sich da alles bei den Financial Serives tummelt, besser geht es kaum.

Select Client List


CJ Banks
Michael Kors
Marc Jacobs
Sara Lee Courtaulds
Sundance Catalog


Immigration Tracker
Onyx Software


VF Corporation

Financial Services

Credit Suisse First Boston
Morgan Stanley
US Trust


19.04.06 11:47

56413 Postings, 6181 Tage LibudaFreeborders die bessere Alternative

Freeborder sitzt mit dem Vetrieb und der Steuerung in den USA und Europa, die "Fertigung" ist komplett in China. Warum das gut ist, steht im folgenden Artikel: "Auf der anderen Seite spielt das Management jedoch auch mit dem Gedanken, verstärkt in China zu expandieren. Denn dort seien die Arbeitnehmer günstiger als in Indien, wo die Löhne deutlich stiegen. Infosys hat die Löhne für das laufenden Jahr um 15 Prozent erhöht, nach ähnlichen Steigerungen im vergangenen Jahr." Freeborders ist nur in China mit der Softwareentwicklung. Und Freeborders wächst noch wesentlich schneller als seine Konkurrenten - nämlich um mehr als 100% pro Jahr. Ein Börsengang steht vor der Tür. Vorbörslich kann man sich über den Erwerb von Aktien von Internet Capital beteiligen, die 33% halten. Ein weiterer großer Eigner ist FTVentures, ein Wagnisfinanzieren, in den über 30 der größten Banken der Welt invesieren.  

18. April 2006 Die indische Börse boomt. Trotz eines inzwischen ambitionierten Bewertungsniveaus zeigen die Trends weiterhin nach oben. Das zeigt sich auch bei der Aktie des Software- und IT-Beratungsunternehmens Infosys Technologies.

Mit einem Plus von zwei Prozent auf 3.296 Rupien setzt das Papier den im März dces Jahres 2003 etablierten mittelfristigen Aufwärtstrend fort und steht kurz davor, neue Allzeithochs zu markieren. Die entscheidende Marke liegt bei 3.453 Rupien. Sie war im Rahmen der weltweiten Technologiehausse im März des Jahres 2000 und damit vor einer mehrjährigen Zwischenkonsolidierung erreicht worden.

Deutliche Zuwächse bei Umsatz und Ertrag

Blickt man auf die operative Entwicklung des Unternehmens in den vergangenen Jahren so dürften Kurgewinne gerechtfertigt sein. Denn sowohl die Umsatz- als auch die Gewinnentwicklung zeigen nicht nur im Trend nach oben, sondern bei beiden kann man sogar von exponentiellem Wachstum reden. Bisher zumindest.

Das zeigte sich beispielsweise im Geschäftsjahr 2004/05, als das Unternehmen den Umsatz im Vergleich mit dem Vorjahr um knapp 47 Prozent auf 71,296 Milliarden Rupien und den Gewinn je Aktie proportional auf 68,791 Rupien je Aktie steigern konnte. Für das abgelaufene Geschäftsjahr 2005/06 rechnet das Unternehmen mit einem Zuwachs von zwischen 26 und 28 Prozent auf bis zu 115,61 Rupien je Aktie.

Damit dürfte das Unternehmen von der anhaltenden Nachfrage nach seinen Produkten und Dienstleistungen profitieren können. Sie zeigt sich unter anderem an den am Montag vorgelegten von Tata Consultancy. Es konnte im vierten Quartal des vergangenen Geschäftsjahres den Umsatz im Vergleich mit dem Vorjahr um 44 Prozent steigern und den Gewinn um 72 Prozent auf 8,09 Milliarden Rupien. Dafür seien nicht nur die Akquisition neuer Kunden verantwortlich, sondern auch zusätzliche Aufträge von bestehenden. Aufgrund der Entwicklung sollen im laufenden Geschäftsjahr bis zu 30.500 neue Leute eingestellt werden. Die Aktie legt am Dienstag bis zu knapp sechs Prozent zu auf ein neues Allzeithoch von 2.014 Rupien.

Auch Infosys hat in den vergangenen Tagen angekündigt, aufgrund des Geschäftsganges im laufenden Geschäftsjahr bis zu 25.000 neue Stellen zu schaffen. Hier baut das Unternehmen ebenfalls auf neue Aufträge. Auf der anderen Seite spielt das Management jedoch auch mit dem Gedanken, verstärkt in China zu expandieren. Denn dort seien die Arbeitnehmer günstiger als in Indien, wo die Löhne deutlich stiegen. Infosys hat die Löhne für das laufenden Jahr um 15 Prozent erhöht, nach ähnlichen Steigerungen im vergangenen Jahr.

Restrisiken und ambitionierte Bewertung

Zusammen genommen scheinen die indischen Unternehmen der Branche gut und dynamisch unterwegs zu sein. Allerdings läßt sich daraus nicht unbedingt auf das Wachstum in Indien selbst schließen. Denn beide Unternehmen erzielen einen sehr großen Anteil ihrer Umsätze in Übersee, insbesondere in den Vereinigten Staaten und Europa. Aus diesem Grund könnten sich durch eine konjunkturelle Abkühlung in Amerika und eine mögliche Dollarabwertung deutlich getroffen werden. Gleichzeitig sollte auch die Entwicklung auf der Kostenseite nicht unterschätzt werden.

Vor allem dann nicht, wenn es um die Bewertung der Aktien geht. So ist die Aktie von Infosys mit Kurs-Gewinnverhältnissen (KGV) von 36,3 und knapp 28 auf Basis der Gewinnschätzungen für das laufende und das kommende Geschäftsjahr alles andere als ein Schnäppchen. Mit KGVs von knapp 27 und knapp 22 sehen die Papiere von Tata Consultancy Services diesbezüglich interessanter aus. Leider sind sie im Moment in Deutschland nicht einmal indirekt handelbar.

Die in dem Beitrag geäußerte Einschätzung gibt die Meinung des Autors und nicht die der F.A.Z.-Redaktion wieder.

Text: @cri
Bildmaterial: FAZ.NET

19.04.06 14:46

56413 Postings, 6181 Tage LibudaStandbein Banken-IT

Wir Ihr an den Kunden aus dem vorletzten Posting erkennen könnt, ist Freeborders inzwischen mit einem Schwerpunkt im IT für den Finanzbereich tätig. Ein wichtiger Baustein dieser Strategie ist, dass man vor ca. zwei Monaten ein IT-Berater gekauft hat, der direkt an Wall Street sein Domizil hat, wie es seine Adresse ausweist. Diese Neuerwerbung ergänzt hervorragend die "Produktionsstätten" in China.


Freeborders expands onshore team of financial services industry experts with acquisition of IT management consulting firm

SAN FRANCISCO, CA-February 8, 2006 -Freeborders, a leading provider of technology solutions and outsourcing from China, announced today the acquisition of ITK Solutions, an IT management consulting firm specializing in technology project delivery for financial services companies. ITK Solutions will expand Freeborders' onshore team of experts in the financial services industry, a key growth area for Freeborders.

Headquartered in New York City, ITK Solutions provides expert IT management in delivering technology solutions to financial institutions. The acquisition of ITK Solutions will also bring a top-tier client list of global banks, investment banks, and hedge funds to Freeborders.

"The ITK Solutions team brings an outstanding track record to Freeborders and we see the financial services market as a huge opportunity for China IT outsourcing leaders in 2006," said Freeborders co-CEO Ramsey Walker. "The quality of the ITK Solutions team is one of the main drivers of this deal. ITK management has many decades of experience with top-tier financial services firms."

According to a November 9, 2005 report by Gartner entitled "What Chinese IT Services Providers Must Do to Succeed In the Global Market", it states, "Many buyers of IT services have gone beyond cost as the main issue and are seeking other areas of value, such as unique domain expertise and experience in client's specific industries."

The ITK Solutions acquisition completes the first phase of Freeborders' expansion of its North American and European client delivery teams in financial services.

For ITK Solutions, the acquisition offers broad benefits to its current clients by combining the cost and quality advantage of Freeborders' offshore team in Shenzhen, China with ITK's onshore expertise in project management and financial services applications.

"Freeborders gives us a tremendous technology development team that will deliver significant cost and time savings to our clients and enable us to offer services on a much larger scale than ever before," said Susan Kirchhoff, ITK Solutions' founding partner. "ITK's onshore expertise and Freeborders' offshore development talent will benefit our clients in a myriad of ways."

ITK Solutions will exist as a wholly-owned, co-branded subsidiary of Freeborders.

About Freeborders

Freeborders is a leading provider of technology solutions and outsourcing from China. Freeborders provides industry expertise to North American and European companies in financial services, technology, retail/consumer goods, manufacturing and transportation & logistics. Headquartered in San Francisco with offices on three continents, Freeborders has developed a track record of service delivery to the Fortune 1000 by combining world-class project management in both hemispheres with one of the largest technology centers in China. Freeborders believes China's massive and growing supply of IT talent and the country's emerging importance in the global supply chain make China a strategic imperative for any company seeking cost-effective world-class technology solutions.

About ITK Solutions, LLC

ITK Solutions, a Freeborders company, is an IT Management Consulting firm with deep knowledge in financial services and technology project delivery. ITK combines the experience, knowledge and true commitment typically found on internal IT teams, with the effectiveness, productivity and discipline typically valued in consulting teams. ITK's people have delivered real solutions to real business challenges.

20.04.06 13:55

56413 Postings, 6181 Tage LibudaWarum der führende IT-Outsourcer in China von

von dem Nachstehenden besonders profitiert, muss ich wohl nicht erklären:

News & Events

India's Outsourcing Industry Is Facing a Labor Shortage

February 16, 2006

MUMBAI, India, Feb. 16 - India's leadership in global outsourcing may be in jeopardy unless it increases its supply of skilled workers, according to executives gathered here for an industry meeting.

Experts at the meeting of Nasscom, the country's outsourcing group, said Thursday that an incipient skills shortage was the biggest threat to the industry's blazing growth.

As the meeting opened Wednesday, Pramod Bhasin, chief executive of Genpact, a back-office outsourcing company once owned by General Electric, set the tone when he said, "If the talent in India is scarce, we will go wherever the labor pool is available."

Lower-cost centers like Eastern Europe and China could become serious rivals for outsourcing business from Western multinational companies. Until now, corporations mainly looked to India to do work from client support to writing software code to designing chips. But the supply of India's famed "skilled, low-cost, English-speaking" work force may not quite match the sizzling demand.

India's $23.4 billion outsourcing industry accounts for most of the country's software and services industry, which makes up nearly 5 percent of gross domestic product. The industry employs 1.2 million workers, has sparked a consumer revolution in India, and is accelerating at more than 30 percent a year.

On the sidelines of the Nasscom meeting, B. Ramalinga Raju, chairman of India's fourth- largest outsourcing company, Satyam Computer Services, said that India produced three million college graduates every year, including nearly 400,000 engineers. "But most of these are uncut diamonds that have to go through polishing factories, as the trade requires only polished stones," Mr. Raju said.

In a country of 1.1 billion people, raw talent is plentiful, he said, but not all of it is market-ready.

Sensing the threat, government and industry are scrambling. Nasscom has begun a skill assessment and certification program for entry-level employees in back-office work; the group has plans to create such program for software services. The government has introduced computer classes in schools. Companies are working with academic institutions so that graduating students will have skills tailored to the job market.

The supply shortfall is even more acute in mid-level jobs, like software engineers. Salaries in this segment are rising an average 20 percent a year, and in some segments even 50 percent annually, compared with 5 percent annual raises for software engineers in the United States.

"The irony is that while the outsourcing industry partially fueled an economic boom amongst the middle classes, the growth has now spilled onto other areas offering ambitious young college graduates an array of job options outside of the outsourcing industry," said M. S. Krishnan , professor of business information technology at the Stephen M. Ross School of Business at the University of Michigan. This, too, is putting an unexpected dent on the outsourcing talent pool, he said.

Outsourcing companies are taking matters into their own hands to meet mid-level skills shortages by setting up vast, dedicated training centers. Tata Consultancy Services, the country's largest software services company, has a large training center in Trivandrum in southern India, while its nearest rival, Infosys Technologies, has a training campus in Mysore, a 100 miles south of its headquarters in Bangalore.

"At any given point in time, there are 4,000 people in the pipeline at Infosys's training center," Mr. Krishnan said. Many companies believe the skills deficit will only grow. "We are in the people business, and the situation will become more challenging in five years," said Amitabh Ray, director of global delivery, IBM Global Services India. I.B.M. has 38,500 workers in India in centers spread across Gurgaon and Chandigarh in the north, Bangalore, Hyderabad and Chennai in the south, Pune in the West and Kolkata in the east.

The travails of many companies, even mid-size ones like Kanbay Inc., which has its headquarters in Rosemont, Ill., and specializes in financial services outsourcing, illustrate the gravity of the problem.

Cyprian D' Souza, managing director of Kanbay in India, said workers with expertise in securities, investments, insurance and banking were "harder to find." The company has 5,700 workers worldwide, more than 80 percent of them in India. As Kanbay has discovered, prospective hires often have solid technology backgrounds, but little business knowledge. For every 100 résumés it receives, only five candidates qualify to be hired.

"If the conversion rate is as low as 5 percent, the industry needs to look at ways to augment the supply so it is does not come in the way of our ambitious growth targets," Mr. D'Souza said.

Once hired, Kanbay's new employees are put through an intensive 14 weeks of training. The company said it was working with engineering colleges to influence and shape the curriculum to focus on industry needs.

Vikram Bahl, 26, was one of the two dozen employees Kanbay hired out of 1,600 applicants. An engineering graduate, Mr. Bahl is now based at the company's Chennai center in southern India, and has averaged 25 percent pay hikes in his last two years at Kanbay.

The situation is much the same in the back-office and call center jobs: of 100 college graduates applying, only 8 are immediately employable. Another 20 require considerable training to be hired, according to Nasscom data.

Nasscom's new call center certification program may help ease some of the pressure. "It is a finishing school concept, and these standardized tests could potentially make available hundreds of thousands of entry-level ready workers in predictable numbers," said Sunil Mehta, vice president of Nasscom. The industry will make this test a requirement for hiring very soon, he said.

The call center and back office sector currently employs 400,000 Indians, but is projected to require at least 1.25 million by 2008.

Such hurdles, however, appear not to have dimmed industry aspirations. Nasscom is maintaining that its projected outsourcing revenue target for 2008 is $50 billion.
© Freeborders 2006, All Rights Reserved  

20.04.06 15:46

56413 Postings, 6181 Tage LibudaHier erfahren wir mehr - nächste Woche (Mittwoch)


Ob auch schon über einen IPO von Freeborders? Vielleicht, aber das Meeting richtet sich wohl mehr an die Anwender.  

21.04.06 18:52

56413 Postings, 6181 Tage LibudaPre-IPO-Marketing ist sicher auch ein wichtiger

Aspekt des im vorstehenden Posting für Mittwoch angekündigten Ereignis. Dafür spricht, dass da mit Jim Hale auch jemand vom Wagnisfinanzierer FTVentures dabei ist:


22.04.06 12:18

56413 Postings, 6181 Tage LibudaAuf den Ami-Boards sieht man das ähnlich

auch wenn ich selbst davon ausgehen, dass wir uns momentan noch in der Pre-Marketing-Phase befinden.

FREEBORDERS IPO news next week???
by: ayzy4 (50/M/Neverland)
Long-Term Sentiment: Strong Buy  04/21/06 03:34 pm
Msg: 240489 of 240489

April 25, 2006

The Thought Leadership Series is organized by Freeborders exclusively for select clients and key strategic prospective relationships. The theme of this Thought Leadership Series Event is Outsourcing Strategies in China: Perceptions, Realities and Best Practices.
This workshop is designed for those looking to learn more about:

Why North American and European companies are looking to China for IT outsourcing
The unique advantages and challenges of outsourcing to China
Keys to operational success in China

Proposed Schedule:

3:00 pm – 3:10 pm Opening Address and Welcome Remarks
John Cestar, Co-CEO, Freeborders

3:10 pm – 3:25 pm Presentation
The Advantages of China vs. India
Speaker: Charlie Cortese, former Managing Director (IT), Lehman Brothers

3:25 pm – 3:40 pm Presentation
Speaker: Jim Hale, Founding Partner, FTVentures

3:40 pm – 4:10 pm Keynote
Speaker: Frances Karamouzis, Research Director, Gartner
4:10 pm – 5:00 pm Panel Discussion and Q&A
Keys to Operational Success in China ITO
Moderator: John Cestar, Co-CEO, Freeborders
Panelists: Karamouzis, Cortese, Kirchhoff


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