From 30,000’ view Pros and Cons of giving your outsourcing business to China could be summarized as
- Comparatively low rates
- Low attrition rates
- Large pool of talent in many areas
- Superb work ethics of the workforce
- Well organized / highly disciplined organizations
- Staff’s desire to succeed (learning and becoming stronger professional rather than pure career move)
- Flexibility of the contract arrangements
- Poor English skills
- Weak grasp on western communications style, wide cultural gap
- Poor theoretical knowledge in many key areas
- Weak technical skills in comparison to the mainstream Silicon Valley resources
- Limited access to resources in several key areas (e.g. business analysis, architecture)
For most outsourcing initiatives that I managed and consulted on Cons outweighed the Pros. Yet I hope that sooner or later I find the right project and a team in China to match, more so I believe that the balance of Pros and Cons is changing as we speak; in particular
- Poor English skills – Chinese government and outsourcing companies are making very significant investments in English training.
- Weak grasp on western communications style, wide cultural gap – A large number of expatriates returning to China with their families after living in the USA and other countries is reshaping culture of Chinese outsourcing.
- Poor theoretical knowledge in many key areas – I am not seeing notable changes there; possibly due to the fact that majority of service buyers are not concerned with that issue.
- Weak technical skills in comparison to the mainstream Silicon Valley resources – Using an old joke as a metaphor – Chinese vendors do not need to outrun Silicon Valley they just need to outrun Indian vendors.
- Limited access to resources in several key areas (e.g. business analysis, architecture) – Influx of expatriates and attention to the issue should eventually take care of it.
|Of course as Cons are being addressed China may lose some of its competitive advantage in Pros category – attrition rates, cost, etc. That remains to be seen.
I always thought that China was destined to win, and if I ever had any doubts they were eliminated after my trip to Shenzhen. When you see what a combination of strong hand of the government and grass root entrepreneurship can do to transform a small fishing village into a megapolis in just 35 years you start to believe that there is nothing that China can not achieve.