The dwindling economies of US and Europe have forced the Indian outsourcing industry to look for greener pastures. The looming recessionary trends over the major outsourcing markets has not only led to the evolution of creative services and flexible business models, but has also led to the discovery of Japan as a potent destination for outsourcing IT services and solutions. Being the second largest market for IT services next to US, Japan’s IT domain is majorly driven by manufacturing, BFSI thereby create a scope for India. In Japan, the information technology is more towards improving business processes for enhanced productivity and resource optimization.
Like all other market leaders, Japan is seeking to modernize their legacy systems for cost efficiency and business edge. Also hit by recession, the efforts are being made by Japanese enterprises to outsource peripheral functions to outsourcing destinations of the world. In addition, the increasing trend of the market competitors adopting the outsourcing model also to some extent inspired Japan to open its doors to India.
There are two major challenges that India has to tackle head on if it wants to enter into the Japanese market. The first challenge is that of language. In Japan, vendors with Japanese language skills are preferred over those with none or minimal understanding. The second challenge is China’s close proximity to Japan. As a result of the proximity, there is a significant cultural exchange programmes between the two erstwhile nations that fosters a clear understanding of both the cultures. Compared to India, China has a significant number of IT professional speaking Japanese which helps them understand the cultural ethnicity and business ethos of the nation.
It is interesting to note that Japan would potentially look forward to outsource its research and development function to India which already hosts brilliant incubation and innovation labs for organizations like Xerox and Google. Research and development outsourcing to India might prove beneficial because of India’s rich talent pool of researchers and technical experts. According to the market analysis by Gartner, one of the effective ways to penetrate the Japanese market would be to partner with already existing IT giants.