The Dao of Outsourcing

Building a Chinese software outsourcing company shortlist can be time consuming and tedious.  Fortunately, IAOP and Neo IT publish yearly global services company lists of the top outsourcing providers globally.  This article looks at the Chinese software outsourcing companies listed and the validity of these lists.

Wading through websites developed by Chinese software outsourcing companies who have meticulously placed keywords to rank high in Google becomes tedious quickly.  It is easy to find more than 100 websites of Chinese software outsourcing companies that are generic and do not actually represent the companies core competencies.  As a result, buyers of offshore services often opt for expert option from service provider lists to create their initial shortlists of potential software outsourcing partners in China.  Although these lists are helpful and save time in creating shortlist, buyers should understand the analysts who create the lists do not have the resources to verify the information provided by the outsourcing companies in the application form.  Without being referred to a vendor by a trusted colleague, or hiring an outsourcing consultant to aid in vendor selection, lists provide an inexpensive way to create a shortlist.

The two most respected lists in the global services industry are compiled by IAOP and Neo IT. Both lists include outsourcing companies from around the globe, and are compiled by thought leaders in the outsourcing industry. IAOP ranks the top 100 companies, while Neo IT lists the top service providers without rankings.  Here is how the Chinese outsourcing companies have ranked over the past three years on the two lists.

Chinese software outsourcing company list

Considering both these lists are compiled by industry experts, it is surprising how much they differ.  For example, IAOP ranks Hisoft as the 20th outsourcing provider in the world, while Neo IT does not include Hisoft in their top 100.  The fact that these lists differ substantially shows the difficulty in ranking Chinese outsourcing companies from overseas.  If the industry experts can not agree on the top companies in China, think of the difficulty Western companies new to outsourcing have creating a list from scratch.

By combining the stats to see how Chinese software outsourcing companies ranked over time, it is easy to see how Chinese outsourcing companies capability have grown in they eyes of analysts over the past three years.

* In 2007 Softtek acquired IT United, removing IT united from the lists

Individual companies have moved around on the lists over time, but there has been a steady increase in the number of Chinese software outsourcing companies listed and their average ranking.  There has been a lot of talk about locally grown Chinese offshore outsourcing companies not being able to compete on a global scale, but these lists show how the competitiveness of local Chinese software outsourcing companies continues to grow.

Public lists created by analysts are a good place to start when creating a Chinese software outsourcing company list, but buyers need to understand that applications for these lists are usually filled out by an outsourcing companies marketing department.  So, a companies ranking often shows little more than the maturity in the capability of the marketing department, not in the vendors delivery capability.  With more Chinese software outsourcing companies setting up their marketing departments in America and allocating profits toward marketing, expect to see the Chinese software outsourcing companies listed move up in 2009 and more home grown Chinese companies added to the list.  For Western companies looking to quickly create a shortlist, public industry lists like these are a good place to start, but it is always better to consult experts advisers like CSO Group when selecting a long term Chinese software outsourcing partner.

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