Offshore IT Outsourcing Companies Shanghai

In 2006, Shanghai became one of the first cities in China identified to be the country’s IT outsourcing base. Offshore IT outsourcing companies in Shanghai are leading China’s efforts to become a global IT outsourcing center.

The global IT services market is predicted to reach trillions in the year 2008. While offshore IT outsourcing companies in Shanghai and the entire Chinese IT outsourcing sector have started in this industry just recently, many analysts see China to become a significant contributor to the further growth of the global outsourcing industry. The IT services outsourcing industry in China is estimated to be worth more than USD20 billion by the end of the year with an annual growth rate of 20 to 25 percent.

What is driving the growth of offshore IT outsourcing companies in Shanghai?

China’s booming economy is a strong factor in the development of the IT outsourcing industry in China. Local businesses and multinational companies with presence in China are growing. Globalization and increasing market competitiveness has made information technology a critical tool for the success of a business. Hence, it has become a necessity for almost any type of business to develop their IT applications and systems.

The domestic market of offshore IT outsourcing companies in Shanghai is continuing to grow boosted by the increase of IT spending of Chinese businesses. These local companies are buying IT services such as application development, system integration and others not necessarily to save money but to meet the demands of a highly competitive market. Examples of these companies are banks and telecommunication companies. This is also true for multinationals in the United States and other western countries.

In essence, the reasons for outsourcing IT functions to an external organization such as an offshore IT outsourcing company in Shanghai is the same as in any type of outsourcing. With the right offshore partner, offshore outsourcing can help a company save money and time. Hiring an in-house IT staff is expensive especially in western countries, where the average monthly salary of a junior developer is US $4,000. Outsourcing to an offshore IT outsourcing company in Shanghai is certainly more cost-effective with comparable quality of output. Moreover, a company that has an in-house IT team can use the services of an offshore IT outsourcing company in Shanghai to supplement the work of its own team and to focus valuable company resources on other IT initiatives. Companies that do not list information technology as a core competency will surely benefit from outsourcing to an offshore IT outsourcing company in Shanghai with technical expertise that can accomplish their IT mission more efficiently.

A unique competitive advantage

Many industry analysts believe that instead of directly competing with India, offshore IT outsourcing companies in Shanghai must build on their unique advantages and carve out their own niche in the global IT outsourcing market. This is what offshore IT outsourcing companies in Shanghai are focusing on. They are aiming to capture global companies with a strong presence in China, Japan and Korea where their cultural and language similarities are a definite advantage.

Today, many multinationals have operations in China and Japan, creating a huge market for an offshore IT outsourcing company in Shanghai. In fact, Japan is the second largest IT market in the world next to the United States. Several leading IT outsourcing companies from India have already set up their own offshore IT outsourcing company in Shanghai and other cities in China to be able to serve this market more effectively. With their unique cultural and language advantages, offshore IT outsourcing companies in Shanghai make ideal offshore service providers for companies looking to develop their IT implementation for their businesses in the Far East Asian markets.

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