The Comparisons Of Software Outsourcing Industry Between China And India Based On Diamond Model

In order to decrease costs of human resource and focus on core businesses better, companies in developed countries outsource their non-core businesses to firms which have lower costs of human resource in developing countries. Because of seizing the opportunity, India has become a superpower of software industry and the center of international software outsourcing. The software industry in China started at the same time as India. However, the development of software outsourcing in China is far inferior to India. Why?In this thesis, the analysis framework is founded by author based on Michael E. Porter's Diamond Model, which contains factor conditions, demand conditions, context for firm strategy and rivalry, related and supporting industries, opportunities and government. It is used to study the software outsourcing industry between China and India. The analysis reveals that China's software outsourcing industry has many weaknesses compared to India, such as, the shortage of software human resources, the unreasonable structure of HR, laggard higher education about computer, small sizes of firms. However, China also has its own advantages in software outsourcing industry, for instance, larger domestic market, more familiar with Japan's culture. Based on India's experience and according to China's own situation, the author gives some useful advice and suggestions on development of software outsourcing industry of China.