Friday, July 24, 2009

China IT company Visit

Today, as part of the cultural & economy visibility program, BLCU ( Beijing Language & Cultural University ) planned a visit to a leading IT company in Beijing, China.
Pretty much formally attired ( a refreshing change from the shorts and tee culture which is quite prevalent here) , I boarded the bus with much anticipation and curiosity about working of the Chinese IT machinery.

After a 15 minute drive, we reached the company. They had a fancy conference room and the company President was part of the welcoming committee.
We felt honored to see the President taking out time from his busy schedule to greet us. We were quite impressed by their professionalism and were eagerly waiting to hear the President’s insights on IT and China. However, this is where the good part ended. After formal speeches from the company & our representative, we were driven through a mediocre PPT giving the overview of the company.
The PPT described the company locations, its core functions, technology partners, certifications and clients. The terms were so ambiguous and superficial that there was no lucidity in company operations and business model. At junctions, we felt the PPT was a forceful formality where they were trying to hide their core competencies and detailed business operation model. Nonetheless, once the presentation was over there was a Q&A session which the President himself addressed.

This seemed like a perfect opportunity for me unravel the mysteries behind the famed China IT business and I was all geared with my relevant questions.

This is where all our expectations crashed. The President apparently didn’t understand English and the translator seemed to be in a hallucination mode.
She translated our questions wrong and then later worse translated her President’s answers. One staunch example was when the President mentioned that management education in bachelors level is not very helpful and should be scrapped. What the translator end up saying is that MBA education is worthless and should be scrapped.
Imagine saying something like this is front on 30 wannabe MBAs.

Nonetheless, I am not sure who was at error. Was it the President or his translator? Ultimately, there was not much learning for us in the complete process. The president answered questions with the famed Chinese nationalism & pride, failing to address the key points while the translator failing to do her job miserably.
I understood that the company clocked revenues of RMB 220 M in 2008 and was suitably unimpressed. That’s like USD 30M.
The revenue of IT companies in every nook and corner of Bangalore. Particularly unimpressive because it employed over 1000 people and was one of the biggest IT companies in China. If you do the math, the company was billing (30M/1000) approx USD 30000 per employee per year. That’s peanuts compared to global IT standards.
After the Q&A session, we went for a floor walk across their office. The office was typical Chinese architecture- No frills, only functionality. One thing which was visibly impressive was the employee dedication. We must have crossed over 30-40 cubicles and not even once, an employee deviated from their work to look at us or at least beam us a smile.

The world talks about German straight faces. Guys – check out the Oriental. I was astonished & equally impressed by this dedication. Productivity levels in China are leagues ahead of India or Europe and this speaks volumes about China’s rapid economic rise in last few decades.

There was one important take away for me from this whole fiasco. China IT is way behind Indian IT and it will easily take another 15-20 years before they reach our levels.
Think of it, with 1000 able people the company couldn’t manage a decent English speaking translator.
But there seems to be an urgency among Chinese to learn English and with their perseverance & commitment, day is not far behind (15 -20 years) when they will be knocking Bangalore doors stealing clients and businesses.
IMHO, Lesson for Indian IT companies– Create Intellectual Property in the next 15 years. Look at the long term picture and try moving up the value chain. Make yourself indispensable for your clients. Indian IT companies should become the process instead being part of the process. This is the only way Indian IT can differentiate itself from the rest and withstand the inevitable Chinese onslaught.


slashData said...

We are humans programming machines and I hope India does not aspire to the goal of IT companies staffed by un-smiling human robots.

Indian IT companies don't have any reason to mimic their Chinese counterparts. They have more way more talent in India, if they only knew to look inside and be creative.

Additionally the first wave of enterprise IT has matured, and I see very few Indians (meaning from India - not American-born Indians) creating the next Twitters, facebooks etc.

Social networking aspect is the new paradigm. And Indians are caught sorely lacking - because they prefer to be social robots.

SAP, PeopleSoft, Oracle these are now mature tools and growth is gone from these areas. Small is cool , this is the era of the Micro-ISV. The IT industry in India will soon be like Detroit's car industry - still trying to survive on old-ideas.

venkat_(n)ever_thinking said...

Very interesting and well written article dude.. didn't bat an eyelid.