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| China is emerging as the next big outsourcing destination, with over 90 per cent of enterprises sourcing jobs from that country, according to Gartner.
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| However, China cannot go the distance alone, as it churns out only entry-level IT professionals. There are no project-level managers or domain experts in China. Thats where Indian companies can come in.
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| According to Gartner research director Dion Wiggins, India should not consider China as a threat, but as a partner to do business with.
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| The IT services and software industry in India and China are estimated touch $27 billion by 2006.
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| Around 40 per cent of revenues generated in China are likely to come from Indian firms operating in that country, Wiggins said.
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| He noted that while demand for IT professionals in China was 3,50,000 during 2002, the country could supply only 1,50,000 IT professionals.
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| China has twice the number of IT companies in India. However, each firm employs less than 50 people. As a result, Chinese firms are unable to take up large projects.
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| Gartner research also showed that the annual salary of an entry-level employee in China and an entry-level employee in India did not differ much.
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| While the salary of an entry-level employee in China ranged between $2423-$4,806 in China, it ranged between $2,555-$4,913 in India.
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| Further, India has a strong history in software and application development outsourcing, and has very mature processes and methodology.
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| Of the 58 capability maturity model (CMM) Level 5 certified companies in the world, 32 are Indian firms.
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| In comparison, China has only one Level 5 certified firm, Bamboo Networks. However, it has a number of companies certified to CMM Level 3.
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| It is only a matter of time before the Chinese processes mature, and companies gain Level 5 certifications, Wiggins explained.
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| Since Chinese companies operate largely on the basis of relationships, according to Wiggins the best option for India is to build relationships with the MNCs, and thereby gain ground in the Chinese market.
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| Today, most MNCs ask Indian companies what their Chinese strategy is, as they consider China the next best alternative to India.
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