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Project CHI: What Every CIO Should Know About China
As Market, Business Location, and Technology Services Center
:: completed list main ::
To understand what the CIO should know about China means putting on three different hats. First, the CIO is a participant in the business strategy formulation process, and wearing this hat must stay informed of the key political, economic and social considerations of China. Second, the CIO is responsible for providing IT support to business operations in China. Wearing this hat, the CIO sets the technology-related governance structures, processes, and policies upon which company operations depend. Wearing the third hat, the CIO is responsible for global IT sourcing - supplying IT services to business operations using the best available talent at the lowest reasonable price, wherever in the world it may be found. To date, India is the dominant location for offshore outsourcing of IT services. But China is widely considered a contender. China is not ready for "prime time" sourcing today, but must be monitored as the pieces fall into place.
If your company is not already in China, then get there as soon as you can. Nothing replaces the learning that will occur from firsthand experience, both in business strategy and in IT management. Keep in mind the following key recommendations:
- Learn how to analyze China, then do so to identify the key issues for your company. There are key indicators (both qualitative and quantitative) that help illuminate the business environment in China.
- Participate in your company's strategy formulation process as it relates to China. CIOs should be prepared to discuss what business opportunities await your company in China, what risks and benefits must be assessed, and what the costs will be.
- If you have operations in China, carefully manage both demand and supply of the associated IT services. Develop a plan for delivery of IT services including an architecture, links with your current global infrastructure, and potential sources for hardware, software, and networks.
- Don't assume an unlimited supply of inexpensive, skilled labor. Most of the labor is inappropriately or inadequately trained to meet your needs. Once trained, employees are highly valuable and often recruited away. Begin early to build a pipeline for the skills you need.
- Develop a long-term global sourcing strategy that includes China-based suppliers. Think through the potential issues and advantages of outsourcing IT services to China-based suppliers, then monitoring developments to learn when China is ready.
- Even if your company has no current customers or operations in China, consider the possibilities. Visit China. Identify a low-risk opportunity to begin to understand business opportunities, including sourcing of IT products and services.
This Re.sults® report provides a country analysis model, then uses it to analyze China's political, economic, and business structures. It also discusses how to manage demand for and supply of IT services for business operations in China, and surveys China's prospects as a location for sourcing of IT services.
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