Talent Bottleneck Impacting Software Outsourcing in China

Software outsourcing services have now becometraining project jointly-operated by MII and NEC.
a new growth spot for China's informationThe Ministry of Commerce of China had launched
technology industry. But at the same time, talentan outsourcing professionals training program in
shortage and suboptimal talent structure have2006, which provides funds for supporting
become an important factor restraining theuniversity students to learn extra outsourcing skills
development of the industry.and knowledge, as well as encouraging outsourcing
Structural talent shortagecompanies to add in new training processes. The
China's software and information serviceprogram aims to develop 300,000 to 400,000
outsourcing sector achieved revenue of US$2experienced talents for outsourcing works, and
billion in 2006, up more than 50% from previouscreate 200,000 to 300,000 employment positions
comparable period. Against this backdrop,for university graduates in the next 5 years. It is
companies engaging in software outsourcinghoped that this program can effectively alleviate
businesses are growing strongly, furtherboth the outsourcing skills shortage and graduate
highlighting the importance of talent recruitment.employment problems.
Technologies and talents are now the mostCompanies are also exploring new models of
important factors for winning outsourcingtraining. For example, Beyondsoft, a leading
contracts.software outsourcing provider for foreign clients,
In fact, there have been many universities andhas been adopting an apprenticeship model to fill
collages establishing software-related courses, andthe gap left by course-based training models. The
a lot of training institutions have also been activeresults are effective, but it is also expensive,
in this field in recent years. It was reported thattime-consuming and slow. But the head of human
there were 1.02 million software professionals inresources in Beyondsoft, Mr Yao Shuang, thought
China in 2007. Then why so many softwarethat based on the foundation of corporate
companies in China are still feeling the talenttraining, "Tutors can first educate apprentices in
pressure?their own department, and then apprentices can
The first reason is that in terms of graduate skills,spread what they learn to other departments,
many courses taught in universities are still laggingmaking it a larger-scale training process."
behind the actual demands of the industry. ManyIn addition, experts also suggested that China's
new recruits into a company still need tosoftware talent development should be
undertake relevant training process before theyprofessionalised. Such a thought has also been
can become sophisticated, which may cost therecognised by China Software Industry
employer time and personnel costs. And if theAssociation (CSIA) and industry participants. In
training process is outsourced to external trainingearly 2008, CSIA kicked start its process
institutions, the results are usually unsatisfactory.improvement talent project, attended by several
Mr Liu Jinran, Vice-CEO of EDS Asia, commentedsoftware companies, in order to explore new
that "We did have some experience dealing withtalent training models. The project specifically
training institutions, some of which were useless.targets the area of software process
Their teachers had rarely touched the systems,improvement, which has now become an
and teaching materials were outdated. Real trainingimportant factor affecting software companies
courses should be integrated with demands ofwinning outsourcing contracts. The project covers
outsourcing providers. Training should be related tosegments with the most talent shortages, such
the development of the market and industry,as software testing, evaluation and defect
instead of looking at a few months' tuition fees".management.
Another reason is that although there areThe goal of implementing this project is to
currently many software professionals, qualityachieve a transformation of software company
experts are still in short supply in China. Mr Xuprocess improvement from an organisational level
Chengjun, an IT director from China Developmentto a combination of individual and organisational
Bank, revealed that when the Bank waslevels. Take the example of a Capability Maturity
outsourcing software projects to externalModel® Integration 5 (CMMI5)-qualified
companies, they found that in many Chineseenterprise. Engineers from this company may
software outsourcing providers, "lack of experts",participate in the certification evaluation of MII and
"expensive experts", "long process needed toother relevant bodies via the CSIA project. If
nurture experts" and "expert easily switchingthere are 10 engineers granted senior
jobs". It is also quite often that senior softwarecertifications and another 10 granted middle-level
talents are lured away by high-paying multinationalcertifications, then clients may make a judgement
firms in China. People said that foreign companiesabout this company's capability from both
not only take away your business contracts, butorganisational (CMMI) and individual (certification)
also your talents.levels. This CSIA project is also an important trial
Exploring new training modelsfor professionalising China's software talents. The
In recent years, how to develop a talent matchingproject is due to announce its software process
and training mechanism has become a commonimprovement knowledge framework in June, and
goal for the Chinese government, companies andstart pilot certification processes in July. It is
training institutions. The Ministry of Informationexpected that the project will deliver a
Industry of China has been working onconsiderable amount of practitioners training and
national-scale IT skills and outsourcing talentcertification between 2009 and 2012.
development projects, such as the outsourcing