By guest author Tony Scott
China versus India in the Outsourcing World
Tony: You have worked with Indian outsourcers and now in China. Are there any differences in what people are doing in China?
Jean: There are some differences in the markets. Indian companies grew around Y2K, mostly, and the model was different. There was a need, there was a due date, there wasn’t enough talent, it was something that was fairly easy to do, and companies needed bodies to do it. Initially the Indian companies were just bringing hordes of people to the United States. Then, after the Y2K work was finished, the companies doing Y2K work realized people that they brought over to the U.S. or employed in India to work on the Y2K issues were pretty smart, so how could their talents be utilized against other IT problems? And it evolved from there.
There is no compelling event like Y2K to force people to work with China, so you have to fight your way into the market based on capability. You need to find a way to be very capable very quickly, and therefore you need a newer focus. So, I think the maturity of the marketplace is the biggest difference. The Indian providers are all grown up, and they are huge companies. The market has changed so much and those companies are so mature that it’s apples and oranges, you can’t even compare. I don’t think you will see many start-up outsourcing companies in India going forward, for example.
Tony: Do you see differences in how you manage and lead between an Indian-centered company and a China-centered company?
Jean: The language is obviously the biggest difference. In India everything was in English. Sometimes you couldn’t understand each other even though both sides spoke English, but it was English nonetheless. In China you have a little bit more of a barrier in oral communication.
On the other hand, in India you really struggle with written communication. People’s written communication is usually not as good as their oral communication. You can never trust somebody to send an e-mail to a client. Somebody else always has to read it and rewrite it, whereas in China they learn textbook English, so their written English is beautiful. If you get an e-mail from many Chinese people you would never know that they were Chinese because their writing is so good. But their spoken English capability is not as high, so getting used to that communication difference is something that I have to figure out. We have to think about how we work with around this obstacle, and how do our clients work with it? How do you help clients find a short cut so that it works smoothly for them?
Tony: What about working with Indians and Chinese from a general personality standpoint?
Jean: They are both very take-orders oriented, so in that regard they are like short-order cooks, not chefs. We have to teach more of them how to be chefs. That takes time and practice, and in that respect it’s the same in India and China. Indian people are a little more mobile; the Chinese system of social security doesn’t allow Chinese to be as mobile. This forces you to open up centers in other places rather than move people where you want them to go, so that’s a limitation in China. It’s easy enough to work with people, but what is different is that they are not going to go from north to south or east to west for you.
Tony: What do you see going on outside of India and China, in Eastern Europe and Latin America, for example?
Jean: It’s scaled a little bit in Eastern Europe and an awful lot in Argentina, there is a lot of outsourcing services coming from there. Brazil is little harder. There are a couple of companies coming out of Latin America, especially Argentina, that are really good companies. English is pretty widely spoken, and Argentina has more of a European culture so the cultural affinity to the United States is good, and the time zone alignment is very good. Eastern Europe suffers from time zone issues just as China and India do, but in Latin America things work pretty well. Between Brazil and Argentina you can’t really compare. While in Brazil you probably could get a higher level of local business volume, you have fewer strong English speakers. So from my perspective, Argentina is very interesting – they have a real opportunity.
Tony: Jean, thanks for sharing your thoughts.