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Global technology service giant EDS will set up its Asian headquarters in Shanghai and recruit as many as 1,000 employees to work there, said Joe Eazor, president of EDS Asia and chairman of EDS China.
Eazor said his company will separate the Asian sector of EDS' Asia Pacific region, which is headquartered in Sydney, from the businesses in Australia and New Zealand and set up Asian headquarters in Shanghai.
"EDS has a very strong belief that Asia,[link widoczny dla zalogowanych], especially China, is an area of significant growth for us," Eazor told China Daily.
One key reason for the establishment of the Asian headquarters in Shanghai is many multinationals, which are also customers of EDS,[link widoczny dla zalogowanych], have established their operations in China, so the world's second-largest technology service provider after IBM needs to build a strong local team to serve them.
Another factor is China, with its increasing influence on Asian economies, is one of the best choices to become a central business focus of EDS, if it wants to serve its customers in the region.
The US firm is also considering the prospect of the rise of Chinese companies and their increasing demands to outsource some of their operations.
Service outsourcing has been listed in China's 11th Five-Year Guidelines for 2006-10, which is expected to receive much attention from the central and local governments.
US market intelligence firm International Data Corp also listed outsourcing as one of the 10 trends in China's information technology (IT) industry this year and predicted that China is going to be a bright spot in the global business process outsourcing market in 2006. It adds that the world's factory will also become a global talent center of IT professionals with the emergence of outsourcing.
EDS is expected to recruit 1,000 people for the Shanghai headquarters this year.
"We will start with a small team,[link widoczny dla zalogowanych], but the number will grow very fast in the second half," said David Wirt, vice-president in charge of global service delivery in Asia.
Eazor said the mid-term goal for his company is to have a team of several thousands of people in China in a couple of years.
EDS has invested US$50 million in the past few years, but Eazor said the figure in the coming years will be much higher than that.
He said the tasks for this year is first to build a global deliver capacity to be able to provide large-scale services to customers.
The other task is to try to achieve some breakthroughs in developing domestic customers in finance,[link widoczny dla zalogowanych], transportation, manufacturing and government sectors.
Eazor said he believes that many domestic companies need to compete against foreign rivals either in China or globally,[link widoczny dla zalogowanych], so they must focus on their core competence and outsource some functions for higher efficiency.
Wirt quoted predictions from some consultancies that the number of domestic clients in outsourcing will exceed that of multinationals in 2007 or 2008.
They believed that once there is a defining transaction, which means a significant company in an industry or in the whole economy outsources some of its operations, it will tip the outsourcing demand among domestic companies.