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IT Products and Services—Annual Analysis Report on Chinese IT Services Market(2005)
Analysys International, May 2005
Suggestions
For Domestic IT Service Providers
- If a domestic firm can only focus on one industry but at the same time is not a leading company, then it should consider entering industries highly related to its current services. This would improve its viability in competition and better its chances of survival by not becoming a purchasing object of a stronger IT company. - IT service providers that are strong and some industries and weak in others should consider quitting from those areas that it is weak. This would enhance their core competitive power in specific areas and maximize profit during those critical growth periods. - Domestic firms should pay more attention on developing applications for specific industries and gradually spread to all system integration projects. Companies improve their profit-making capacity by increasing the proportion of revenue gained from development and service and gradually decrease the proportion of revenue from traditional hardware system integrations. - Domestic IT service firms should complete their IT professional service offerings. This should be accomplished in stages, for example, establishing an IT consulting service before entering into the IT management services. Domestic firms could also consider cooperating with foreign IT consulting or management firms by setting up new joint ventures.
For Foreign IT Service Providers
- Foreign IT service providers could enter government IT projects by cooperating with IT service providers with strong connections to the government. Participating in government projects allows them to gradually develop their success cases and thereby increasing their influence in government sectors. - Foreign IT service providers should fully use relationships with their local branches of multinational corporations (MNC) to secure relationships with the Head Offices. Some MNC enterprises implement global procurement procedures. Therefore, a partnership with head offices of an MNC enterprise may mean a relationship with branches in China. Foreign enterprises should prepare to enter industries on a large scale offering services that completely cover every aspect of that industry. - Foreign IT service providers should spread the word of their success stories. They can do this by organizing workshops or forums and providing concrete methods of implementing their experience. This would supply domestic users with references and guide the demands of the industries. For IT Service Users
- Industry users should select implementations of IT systems of several enterprises in the same industry. By examining the 'indicators' of solutions that have been implemented in other companies, the users can create an operational model on which to plan and build their own IT solutions. - Some users may find it hard to locate enterprises with solution requirements similar to their own. Others have a long history of problems when it comes to constructing IT systems. These users should consider selecting an IT consulting firm to 'settle' the problems and work with them to develop a solution with the lowest cost and strongest functionality. - Industry users should assess the cost and expenditures of IT operation and management. This includes hardware maintenance costs and the cost of operating IT assets like a data center or call center. It also includes the cost of upgrading the application and the labor requirements of IT personnel. Once all the costs have been assessed, users should compare that with the price of services provided by IT management companies. This should allow them to determine whether or not to select IT management services.
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