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Unisys plans Shanghai global centre

By Zhang Di (China Daily)
Updated: 2006-03-22 06:17

Attempting to take advantage of China as an offshore service destination, US-based Unisys Corp will invest US$100 million to set up a global sourcing centre in Shanghai in the next five years.

The technology service company's new centre will zero in on information technology and business process outsourcing (BPO) activities, technical help desk services and technology support and maintenance services.

In the past, foreign companies have generally used China only as a manufacturing base due to its low labour costs.

But now more multinational companies are moving their service bases offshore to further cut costs and increase delivery efficiency, and China is becoming a more attractive spot to do just that.

Unisys has already set up outsourcing centres in other countries including India, but was behind in moving such activities to China.

"Unisys is not a leader in global sourcing," said Cal Killen, vice-president of Unisys Global Services.

"We came too late to realize that we need to move more of our resources overseas. Unisys Corp's long-term strategy is to invest in China as a key global sourcing destination."

Killen said during its transition from a technology company to a service company, Unisys overlooked offshore services.

But Unisys will catch up with IBM and Accenture, leaders in global outsourcing, in the next three years, the vice-president said.

"We will be aggressively going offshore."

The centre in Shanghai will initially recruit 250 people, increasing that number to 550 soon.

Unisys plans to eventually build outsourcing centres in Beijing or Dalian of Northeast China's Liaoning Province.

Killen said Unisys will move 20 per cent of its services offshore by 2008, and will have 1,000 employees in China by then.

China has become a popular destination for offshore services, as multinational companies are seeing salaries in India increasing and the Chinese improving their English skills.

Killen expects China to have a mitigating effect on India's domination in IT outsourcing over time.

He said to satisfy global customers, a company has to be in both India and China.

The Indian BPO industry is expected grow 10-fold by 2010, according to a report by the Indian software trade association Nasscom and global consulting firm McKinsey.

David Fu, vice-president and general manager of Unisys Greater China, said Unisys is seeking to rapidly expand its China business in particular.

The firm has signed contracts with big Chinese corporate clients including Beijing Capital International Airport and the Industrial and Commercial Bank of China.

Fu also revealed Unisys is interested in co-operating with the Beijing Organizing Committee for the 2008 Olympic Games, offering services like e-ticketing.

(China Daily 03/22/2006 page11)