A shrinking market is what driving Indian IT majors seek opportunities elsewhere other than USA. And Japan is the latest destination, where all major Indian software and outsourcing companies are flocking in search of some good business. Even a few years ago, Japan used to be only an insignificant part in the whole scheme of things. The big companies like TCS, Wipro and Infosys had small teams working in Japan. But recession has changed everything. These days, Indian techies are flying to Tokyo in thousands. With US economy badly in the grip of recession, Indian software giants are all set to penetrate the Japanese market.
Indian IT companies are trying to crack the Japanese market in a bid to reduce their dependence on the weak US market. But needs are on both side. Japanese industries are also going to be benefited by the emerging trend. Japan has the world’s largest aging population and that drastically reduce the inflow of new generation of engineers into the economy. Under this circumstance, increasing number of Japanese companies are coining with the idea of sending information-technology work to China and India. And with this Indian IT majors are anticipating much more business in the future. From Hitachi to Fujitsu and Daiwa Securities SMBC to Olympus Corp, Indian companies are designing software for a number of big Japanese companies.
In India’s efforts at courting Japan, China remains the biggest competitor. Every year, Japanese companies outsource IT jobs worth $8 billion to other Asian countries including India, China, Korea, and Vietnam. China alone bagged $ 5 billion worth of deal, where India’s share was not more than $1.5 billion.
However, things are predicted to take some positive turn in the upcoming years. Sony and Toyota have already started outsourcing jobs to India, as a part of their $2 million outsourcing and back office investment plans. The Japanese automaker Nissan is the latest to join the bandwagon. Japan’s third-biggest automaker has invited India’s top four IT companies---TCS, Wipro, IBM and Mahindra Satyam to bid for an application development and maintenance deal. The deal is going to be worth of $250 million. A significant involvement of the local companies is going to be an important part of the contract.
Japan has a lucrative market for IT outsourcing and if Indian companies are successful in wooing Japanese industries, it is going to be bright future for Indian IT outsourcing sector. However, Indian companies have a long way to go; there is tough competition from China, the tradition-loving Japanese businessmen still prefer local companies over the foreign ones. Language is still a barrier in spreading business in Japan. Some Indian companies maintain that the biggest impediment is the prevalent corporate culture in Japan that prevents the business owners trust part of their business to others.
Indian IT firms are also not taking any chances. The big Indian companies are putting their employees through Japanese-language and business-culture courses. Their Japanese employees are also sent to India to learn the Indian ways of business.