The Hindu Business Line : A Chinese vendor paints India black to woo clients

The battle is not about pricing or quality but about issues on which India's image has been traditionally less-than-bright: poor infrastructure, not to mention manpower attrition in the software industry.

Chennai , Sept. 30

INDIA'S infrastructure woes have been the favourite punching bag for industrialists and ministers recently.

Now, the Chinese have also picked up the thread. They are using it as a marketing tool to showcase their strengths in software.

Sample an e-mail from a Chinese company doing the rounds in the US and you know how it hurts below the belt. The battle is not about pricing or quality, but about issues on which India's image has been traditionally less-than-bright: poor infrastructure, not to mention manpower attrition in the software industry.

The e-mail comes from Mr Frank Hui of China Tech Source, a company with development centres in Boston, Silicon Valley, Shanghai and Beijing.

Big claims

It talks about a growing number of companies choosing China over India as a destination for offshore outsourcing of software development and even claims that some companies have decided to shift from India to China. It says, "Things become intolerable outside the borders of a few software parks in India (bad road, dirty water, bad phone connection, frequent power outage... ), everything looks nice wherever you go in China."

It also talks of attrition rates exceeding 60 per cent for many "India sites... (while) those in China remain ... below 10 per cent".

Significantly, top Indian companies such as TCS and Infosys have recorded attrition rates in the region of 10 per cent.

The e-mail claims that Chinese software workers stay with "the team for many years" while it is difficult to "maintain a stable team in India for more than six months."

Mr Hui adds, "India sites cost shot up 20 per cent a year over the past 5 years, while the cost of running similar China sites has remained flat during the same period."

Interestingly, while Indian companies have cited time zone differences as an advantage for US clients, the e-mail says, "During afternoon hours of US time, while staff at India sites are still sound asleep, the staff at China sites are already in the middle of routine conference calls with their US counterparts."

Timely reminder

Mr Neelam Dwivedi, Vice-President (Marketing and Sales) at Proteans Software, a company that does outsourced software product development, was one of the first to feel the pinch. He said, "A US client received this e-mail but fortunately we have a good relationship with them. It is not a question of direct competition between two players, but it's about two countries."

He felt that the problem of infrastructure development, key to raking up software orders, is an issue that is too large even for the National Association of Software and Services Companies (Nasscom), the software industry's apex body, to deal with.

"We have industrialists citing Bangalore's poor infrastructure as an example of how not to be. It is time the government did something to improve the image of India worldwide."

Mr Krishnakumar N, President and CEO, IT Services, at Mindtree Consulting was another recipient of the e-mail even though it was intended for IT buyers rather than vendors.

Replying to Business Line's e-mail, Mr Hui confirmed sending out the mail and said, "The context of my original e-mail is to promote our offshore IT services in China. It should not be read as academic research."

On India's manpower attrition problems, he says, "... High attrition problems are mostly with second and third tier India vendors, not with the top firms. We focus on small projects, which puts us in competition with smaller India vendors, and that is where it matters to our client base."

Commenting on the issue of Indians working in development centres in China, he said, "I do not believe there are many Indian IT professionals currently working for Chinese companies in China and I have not met any either. Instead, many are working for Indian companies or US companies in China (for example for Infosys in Shanghai, TCS in Hangzhou and GE in Dalian)."

Still the first choice

Interestingly, Gartner had a release last fortnight stating that "India is still first choice for global sourcing although competition (is) mounting."

The report also said that in terms of the number of IT professionals, "currently, only China comes close to India in potential."

It added that India had "the majority of essential resources and sufficiently robust infrastructures to deliver IT products and services successfully. Other countries - including China, Brazil and the Czech Republic - are making inroads, but they currently lack some of the attributes to qualify as leaders."

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