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China Outsourcing BPOVIA

The Dragon Boat Festival is a significant holiday celebrated in China to commemorate the Chinese patriotic poet Qu Yuan who lived in the Warring States Period (475 - 221 BC). The traditional customs on that day are racing boats in the shape of dragons and eating zong zi.

Served as the Minister of the Zhou Emperor, Qu Yuan was a wise and articulate man who was loved by the common people. He did much to fight against the rampant corruption that plagued the court, and thereby earning the envy and fear of other officials. When he urged the emperor to avoid conflict with the Qin Kingdom, the officials persuaded the Emperor to have him removed from service. In his exile, he traveled, taught and wrote for several years. Hearing that the Zhou had been defeated by the Qin, he fell into despair and threw himself into the Milou River.

The boat races during the Dragon Boat Festival attempts to rescue the patriotic poet Qu Yuan who drowned on the fifth day of the fifth lunar month in 277 B.C. The Chinese also throw zong zi, a kind of cooked rice dumplings covered by bamboo leaves into the water in the hope that the fish could eat the rice rather than the hero poet. This later turned into the custom of racing boats and eating zong zi on that day.

The celebration of the Dragon Boat Festival in Chinese tradition is also considered as a way to protect people from evil and disease for the rest of the year. This is done by different practices such as hanging healthy herbs on the front door, drinking nutritious concoctions, and displaying portraits of evil’s nemesis, Zhong Kui. There is an old Chinese saying that if one manages to stand an egg on its end at midnight, he will be a lucky dog in the following year.

The Dragon Boat Festival is a public holiday in China and all the staff in BPOVIA will have a day off on June 9, 2008 (Monday) to celebrate the Festival.

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China has begun to figure as an alternative for the practice of shipping tech tasks offshore after India’s run of stunning good fortune.

One advantage is that China has a large labor supply pool like India and the other one is that if you’re dealing with customers or companies who have an Asian headquarters, there is a language and cultural advantage in China. Particularly in cities like Shanghai, which has bilingual engineers who speak both Japanese and Chinese. China is associated with low cost, at least in the software industry.

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 $12.7 billion a year, according to a recent report from consulting firm McKinsey.

There are both advantages and disadvantages in China right now. One is the intellectual-property protection issue. The second is their English language capability, and the third is their lack of project management expertise. According to McKinsey, China faces other challenges, not the least of which is a lack of management talent.

The challenge in China is only in the project management area–project lead area or the specialized 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.

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China Outsourcing China, Outsourcing

With a slowdown of the world economy, many companies have started paring headcounts in their HR departments and outsource their HR functions to countries like China and India where the labor cost is comparatively low.

James Huang heads an BPO and HR outsourcing firm that has offices across China. Business is booming for freebooters like James as more and more solid, conservative old economy firms start receiving HR outsourcing contracts. The spry services outfits were doing this anyway.As a result, most companies. “It’s turning into a flood of contracts. Most are now being outsourced,” says James.

HR outsourcing is not a very new phenomenon; but what is surprising is the speed with which companies have bought into the idea itself. HR outsourcing covers all functions relating to recruitment, assessment of new candidates, sourcing candidates, background checks of candidates, and talent branding, which is a lot like media planning and deals with where to advertise for candidates and through which channels.

According to BPOVIA, a global consulting, outsourcing and investment services firm, human resource outsourcing (HRO) has come a long way since mere payroll administration or recruitment channel. It has moved up the value chain from tactical HR processes to managing business critical HR.

There are basically three broad classes of companies that are looking at HR outsourcing. First, there are large companies such as TCS and Infosys which have an employee base of close to 1 lakh each. These companies are looking to outsource HR to save costs. The second group comprises mid-size service as well as manufacturing companies with 2,000 to 5,000 people such as Microsoft China and Cisco. For such companies, it is a combination of a need to get the best talent and cost that is leading to the outsourcing of HR activities.Then there are the small companies who have ambition but simply do not have the strength or the expertise to hire big time. So they outsource their functions to BPO companies.

Apart from these functions, payroll and benefit management and performance management, strategic functions and training also form part of HR outsourcing Many of their clients are small firms with big ambitions, which do not have the capability to attract big talent. They also outsource their functions to firms like BPOVIA, who is professional on this.

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BPO, China Business, China Outsourcing BPO, HR outsourcing, World economy

It seems as though everyone is investing in China. During the past few years, every type of investment in the country — including private equity and venture capital — has exploded. At first, investment tended to focus on the technology sector; today’s investments are in everything from real estate to infrastructure. In a keynote speech at this year’s China Economic Forum, Lari, managing director of the Sino-US Ventures, noted that online services, business process outsourcing and mobile value-added services will be the top three investment areas in 2008. While the bulk of the investments are still in the IT and IT-enabled services sector, health care is beginning to pick up and opportunities are often regional:Beijing and Nanjing for IT, Shanghai for media, Xi’an for manufacturing, and Dalian and Nanjing for business process and knowledge process outsourcing.

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BPO, China Business Beijing, BPO, China Business, investment

Close on the heels of opening a business process outsourcing (BPO) unit in Singapore, Spanco Telesystems and Solutions plans to set up centres in China and Malaysia to cash in on the language capabilities of these countries.

The BPO major is also looking at tripling the number of its global seat capacity to 15,000 in the next two years from the current 5,000.

Spanco is in advanced negotiations to acquire two domestic companies, valued at Rs 100 crore each. The company is expected to close the acquisitions in the next three months. The names could not be ascertained.

The company is looking at setting up a 400-seater centre in Malaysia in the next six months and a 500-seater facility in China by the end of this financial year at a combined investment of around Rs 100 crore. Read more…

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The Chinese BPO job may be getting onto a factory like assembly line chore. Similar to automobile shop floors, where jobs are broken down into miniscule tasks and processes demarcated step by step, BPO companies in China are experimenting of breaking a complex activity into numerous simple chores, to be easily performed by even school passouts. Read more…

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In the BPO field, China is perhaps the biggest challenge in the future and the largest threat to India with the largest population and fastest economic growth. However, India is well placed in terms of parameters like cost savings, competency, technical infrastructure, language and skill pool to keep itself as competitive as before.

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