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1.  Learn a new language this summer - The Hindu Business line - 12th April 2011
2.  Develop a yen for Japan - The Hindu Business line - 12th Nov 2008
3.  Japan's DoCoMo acquires 26% stake in Tata Tele - Our Bureau - 12th Nov 2008
4.  'India has better IT skills than China' - The Economic Times - 7 Jun, 2008, Shinichi Yamada,NTT Executive Vice
      President & CTO.
5.  High-Tech Japan Running Out of Engineers - New York Times - May 2008
7.  Indian IT firms eye Japan to counter US slowdown - The Economic Times -Jan 2008
9.  TCS bets on embedded systems to spur growth in Japan - The Economic Times - Nov 2007
10.  Indian IT firms queue for Japan's outsourcing pie -
11.  Japan blips on radar of Indian IT companies - The Hindu Business Line
Learn a new language this summer
Source name:
Bangalore: Knowledge of a foreign language sits very nicely in a CV. No wonder there is an explosion in the number of those learning a new tongue as it opens up career opportunities as well as helps understand the literature and culture of other countries. In Bangalore, there are many who beat a path to the door of institutes offering courses in Spanish, German, Korean, Japanese, Chinese, French, Portuguese, Russian, Arabic and Dutch among others.
Students, professionals and homemakers are among many opting to study foreign languages either as part of their curriculum, for professional reasons or purely with the passion to learn.
Pallav Ghosh, who works in Oracle as a foreign language expert, has done his graduation and masters in Russian along with a certificate course in Portuguese."My love for Russian literature drew me to study it. I learnt Portuguese as business between the two countries is booming and career opportunities are opening up," he said.
Translators in demand
As India's tourism is developing and many multinational companies opening their offices here, translators are now very busy. There is great demand for German, French and Japanese in the city, said Vikram Malhotra, proprietor of Vidushi Academy which offers courses in German, French, Spanish, Chinese and Japanese. “Spanish and Portuguese do not have many takers but they have huge scope as South American and Portuguese markets are opening up," he said.
Young people are opting to learn foreign languages as a base for further studies. Karthik Adithya, a journalism student, has learnt German as he plans to pursue his higher studies in international politics."After learning German I have grown to appreciate German movies," he adds.
Tech professionals
People employed in BPOs, call centres and software professionals who are posted abroad queue up to learn the respective languages. Hari Joshi, proprietor of Foreign Language Institute, says: “Senior directors, CEOs of companies and Americans posted in India are learning foreign languages. Many MBA graduates and engineers also apply for the courses."
Just for the love of it
And then there are those who come merely for the love of the language. Jyotsna S., has been learning Japanese for the last two years from Sakuraa Nihongo Resource Center. “I started learning Japanese as I found it interesting. It is very challenging to learn the three Japanese scripts. But now because I have learnt the language, I'm exposed to the world of Japanese media," she said.
Develop a yen for Japan
Moumita Bakshi Chatterjee
With the financial hurricane pounding US and European shores - the cornerstone of the $40-billion Indian software and services exports industry - there couldn't be a more opportune time for India's code-jockeys to look eastwards, and crack the Japanese market.
"Japan, with shortage of technical skills and urgent need for business transformation, can turn out to be a very large market for us," says Som Mittal, President of software association Nasscom.
And for a good reason too. The Japanese IT market, at a whopping $108 billion, is the second largest IT services market globally. Despite this, the island nation accounts for less than 2 per cent of IT services exports from India, compared to the US and Europe, which form nearly 90 per cent of India's overall IT exports.
"While de-risking is one of the drivers for Indian companies to look at geographies such as Japan, the Japanese companies too realise that they have to go global, in order to grow. This is the right time for Indian industry to partner with Japanese companies," points out J. Kalyanaraman, Head - APAC for HCL Technologies Ltd.
big slice for bfsi
A recent Nasscom-PwC report, which offers a bird's eye view of this large yet relatively uncharted IT territory, notes that for most Japanese companies usage of IT has, so far, been restricted to improving business efficiencies in administrative and intra-company transactions, with only a few harnessing it to strengthen competitiveness
.Japan has low overall IT spending with spend-to-sales ratio at around 1-1.5 per cent for most verticals, compared to 3.5-4 per cent in case of the US.
"Japan is largely a products country as opposed to a services economy, and much of the IT spend seems to be camouflaged in product costing," says an industry expert.
As is the case with other geographies, banking, financial services and insurance (BFSI) - which incidentally is the sweet-spot of Indian IT players in other markets - is the highest IT spender amongst all industries in Japan. BFSI, together with manufacturing industries, consumes close to 42 per cent of Japanese IT services; Systems Integrator accounts for 16.3 per cent; and public sector and ICT 8.6 per cent and 7.9 per cent, respectively. Another aspect that stands out is the domination of custom-built software over packaged products.At present, while less than 10 per cent of the outsourced IT services is actually offshored by Japan ($8.6 billion), arch industry rival China has cornered over 50 per cent share of these offshored services.
India's share is a mere 13 per cent, with the Philippines and Vietnam completing the list of low-cost offshoring destinations for Japanese IT work.But all that may change soon. The industry is optimistic that India could play a greater role as the world's fastest ageing nation prepares to make bold choices to remain competitive globally.
Opportunities for India
Where India is busy reaping the demographic dividend, Japan is facing a negative growth in population.
"The skills shortage in Japan is getting worse. Most of the IT systems are legacy systems and with the current set of technical professionals retiring, Japanese companies are staring at a huge challenge.
India also has a definite edge in the engineering services and embedded systems space," says Girija P. Pande, Executive Vice-President and Head Asia Pacific, TCS.
Moreover, the financial crisis is nudging leading Japanese companies to look for high-quality, proven and low-cost sourcing destinations, and newer markets.
Enter India. "We can be a natural ally to the Japanese market, given India's excellent service delivery expertise, strong Human Resource (HR) skills, and large consumer market. Indian IT vendors are regarded high on domain competence, and offer fast ramp-up capabilities, lower costs and a better-IP protection environment," says Mittal of Nasscom.
While embedded systems development and engineering are the 'quick win' service offerings for Indian vendors, opportunities in application development and maintenance are also opening up.
According to the Nasscom report, with the changing business requirements and increased need for flexibility, Japanese enterprises are now overcoming their preference for custom-built application and embracing packaged software applications - ERP, Sales force automation and CRM lead the wish list. This augurs well for the Indian IT industry as it offers implementation opportunities.
Top Indian companies, including TCS, Satyam and HCL, have already started demonstrating project wins not only in applications development and maintenance but also areas such as ERP implementation and embedded systems - perhaps an indication that Japanese companies are getting comfortable with Indian service providers. TCS, for instance, has built an algorithmic trading platform for Japan's Daiwa Securities, and also set up a broking solution for another large Financial Institution - these projects would perhaps have been nearly impossible to clinch just a decade ago.
Satyam, whose Japan revenues are high on ERP implementations, has seve
1.  Develop a yen for Japan - The Hindu Business line - 12th Nov 2008
n-eight active clients and also serves 20-25 smaller engagements.
2 High entry barriers
But while the industry has established a strong foothold in most developed markets, a similar level of success in selling tech wares in the Japanese market continues to elude India.
"Selling goods and services in Japan takes a long time, and IT seems to be no exception," points out a senior official of a leading IT company.
For one, Japan market poses two high entry barriers for India - language and cultural compatibility. China, on the other hand, scores as it is familiar with the Kanji script.
In addition, the north-eastern Chinese city of Dalian has a large number of Japanese speakers, given the city's historical links with Japan, and has, therefore, emerged as a hot-spot for Japanese companies.
"For most of the Indian companies that currently serve the Japanese market, revenues from Japan will be less than 3 per cent of the overall turnover.
This is primarily because language acts as a hurdle, and also because Japan, as a society, is relatively closed. As a result, a significant chunk of the work ends up in China," says Virender Aggarwal, Director and Senior Vice-President, Satyam - Asia Pacific Middle-East, India and Africa operations.
Satyam derives nearly 1.6 per cent of its revenues from Japan where it serves companies in the automotive, electronics manufacturing, and insurance sectors.
Besides, Indian companies, who have long served global clients, struggle to cope with the IT project management practices in Japan - Japanese clients tend to give out projects based on relationships, points out Nasscom.
"Indian providers have to build trust, the marketing cycles are long and the quality consciousness is extremely high with Japanese companies," says Pande of TCS.
Last but not the least, the incumbent IT services hierarchy offers little incentive for Indian companies keen on working at high-end technology levels.
IT service providers are stacked in a Keiretsu model where Fujitsu, NEC, NTT Data and IBM comprise Tier-1.
The IT development work is first contracted to these Tier 1 providers who, in turn, sub-contract work to secondary and tertiary players.
Where we can score
The good news, however, is that Japan is seriously looking to experiment with India when it comes to IT services.
Though China has long enjoyed preference as an offshore location, Indian industry can derive some solace from the pattern in which this work is offshored. Where China is seen as a low-end service provider with limited capabilities to manage large and complex projects requiring high domain expertise, Indian IT vendors are considered high on technology and domain competence, says Nasscom.
Pande of TCS emphasises on the need for Indian vendors to maintain a strong front- end presence in Japan. TCS has 1,200 of its employees working with Japanese clients, nearly 300 of them based onsite, while 800 professionals are based in India, and 100 are in China.
Satyam has 250 professionals based in Japan, while another 250 are based in India and 100 professionals in China work on Japanese customers.
'Turn trusted advisor'
"Indian companies must change their mindset and move from being transactional to transformational in their approach and be ready to invest in strong relationships upfront.
The alternative markets to the US and UK, such as Japan, are relationship-focused. The prospects expect the partners to prove themselves in a relationship, building trust and being a trusted advisor rather than a vendor selling them products and services," says Ambarish Dasgupta, Partner and Head of consulting practice at PricewaterhouseCoopers India.
Agrees Kalyanaraman of HCL Technologies
"Indian industry has to shift gears and move to a partnership mode and not a supplier-buyer mode.
Indian companies interested in the Japanese market will need to commit a certain amount of investment, time and effort to understand and work out a suitable strategy," he stresses.
Japan's DoCoMo acquires 26% stake in Tata Tele
Deal valued at Rs 13,070 cr; open offer for 20% stake on cards.
Mumbai, Nov. 12 Japan's largest mobile operator NTT DoCoMo on Wednesday became the latest entrant in the world's fastest growing mobile telephony market when it picked up a 26 per cent stake in the city-based Tata Teleservices (TTSL) for a consideration of $2.7 billion or Rs 13,070 crore.
This deal would value TTSL, with its customer base of 30 million, at over $10 billion.
This is the third instance in the last two months, of a foreign telco picking up significant stake in an Indian company. It appears that the global liquidity crunch has not yet negatively impacted investor interest in the Indian telecom sector, said Mr Naresh Singh, Principal Research Analyst, Gartner Inc.
(Etisalat purchased a 45 per cent stake in Swan Tele for $900 million (Rs 4,320 crore) in September, while Unitech sold 60 per cent stake in its telecom venture for $1.27 billion (Rs 6,120 crore) to Norway-based Telenor.)
DoCoMo will make an open offer to acquire up to 20 per cent of the outstanding equity shares of Tata Teleservices Maharashtra Ltd (TTML), the listed subsidiary of TTSL which has operations in Maharashtra even though it is not required to do so according to SEBI guidelines. TTSL holds 37.65 per cent stake in TTML.
SEBI guidelines say that companies have to make an open offer only if the acquiring party picks up more than 15 per cent stake in the target company. In this case, DoCoMo will only acquire 9.9 per cent in TTML as a consequence of buying into TTSL.
Since the company is going ahead with an open offer, it could mean that the intention is to get TTML delisted, merged into TTSL which could subsequently be listed, analysts feel. TTSL officials were not available to confirm this.
This deal will give the much needed equity boost to TTSL which has licences for launching GSM services in eight circles, said Mr Priyank Chandra, Research Analyst, Dolat Capital Market Ltd.
The TTSL acquisition seems to be another step by NTT DoCoMo towards diversifying from the saturated Japanese market, as this is the second big ticket acquisition made by the Tokyo-headquartered company in the last six months.
However, analysts feel that the deal is highly over valued as the enterprise value (EV) per subscriber in this deal is at a premium to that of all the major telcos in the country. The EV/subscriber value for TTSL is at a premium of 6.1 per cent to that of the telecom industry leader Bharti Airtel, said a telecom analyst. (EV/subscriber is a popular metric for valuation in high growth markets as it reflects the potential for cash-flows.)
DoCoMo has been looking to enter the Indian markets for quite some time now. In December 2006, NTT DoCoMo, and the erstwhile Hutchison Essar (Hutch) had entered into an agreement under which Hutchison Essar was supposed to launch the i-mode mobile Internet service in India in 2007. However, the launch never happened as Vodafone acquired a 67 per cent stake in Hutchison Essar for $11.1 billion in February 2007.
'India has better IT skills than China'
Excerpts from the Interview of Mr Shinichi Yamada , Executive Vice President & CTO (9 Billion USD) NTT Data Corporation
In his interview to The Economic Times (7th June 2008), Yamada San dwelt at length on his experience with Indian IT talent & how NTT data began its off shoring program in China & then moved to India. Some of his observations are very interesting. When questioned on the need to move off shoring to India he responded stating that Our general impression on IT skills in India and China is that .Indians have better IT and technical skills We get advanced engineering capability, which is in short supply even in Japan. This is a major benefit according to him in engaging Indian IT talent. Thus NTT Data has aggressive plans to double their off shoring targets in the next two years.
High-Tech Japan Running Out of Engineers
After years of fretting over coming shortages, the country is actually facing a dwindling number of young people entering engineering and technology-related fields.
Universities call it "rikei banare," or "flight from science." The decline is growing so drastic that industry has begun advertising campaigns intended to make engineering look sexy and cool, and companies are slowly starting to import foreign workers, or sending jobs to where the engineers are, in Vietnam and India.
It was engineering prowess that lifted this nation from postwar defeat to economic superpower. But according to educators, executives and young Japanese themselves, the young here are behaving more like Americans: choosing better-paying fields like finance and medicine, or more purely creative careers, like the arts, rather than following their salaryman fathers into the unglamorous world of manufacturing.
The problem did not catch Japan by surprise. The first signs of declining interest among the young in science and engineering appeared almost two decades ago, after Japan reached first-world living standards, and in recent years there has been a steady decline in the number of science and engineering students. But only now are Japanese companies starting to feel the real pinch.
By one ministry of internal affairs estimate, the digital technology industry here is already short almost half a million engineers.
Headhunters have begun poaching engineers midcareer with fat signing bonuses, a predatory practice once unheard-of in Japan less-cutthroat version of capitalism.
The problem is likely to worsen because Japan has one of the lowest birthrates in the world. "Japan is sitting on a demographic time bomb," said Kazuhiro Asakawa, a professor of business at Keio University. "An explosion is going to take place. They see it coming, but no one is doing enough about it."
The shortage is causing rising anxiety about Japan competitiveness. China turns out some 400,000 engineers every year, hoping to usurp Japan place one day as Asia greatest economic power.
Afraid of a hollowing-out of its vaunted technology industries, Japan has been scrambling to entice more of its younger citizens back into the sciences and engineering. But labor experts say the belated measures are limited and unlikely to fix the problem.
In the meantime, the country has slowly begun to accept more foreign engineers, but nowhere near the number that industry needs.
While ingrained xenophobia is partly to blame, companies say Japan language and closed corporate culture also create barriers so high that many foreign engineers simply refuse to come, even when they are recruited.
As a result, some companies are moving research jobs to India and Vietnam because they say it is easier than bringing non-Japanese employees here.
Japan's biggest problem may be the attitudes of affluence. Some young Japanese, products of a rich society, unfamiliar with the postwar hardships many of their parents and grandparents knew, do not see the value in slaving over plans and numbers when they could make money, have more contact with other people or have more fun.
Since 1999, the number of undergraduates majoring in sciences and engineering has fallen 10 percent to 503,026, according to the education ministry. (Just 1.1 percent of those students were foreign students.) The number of students majoring in creative arts and health-related fields rose during that time, the ministry said.
Applications to the engineering program at Utsunomiya University, an hour north of Tokyo, have fallen one-third since 1999. Starting last year, the school has tried to attract students by adding practical instruction to its theory-laden curriculum. One addition was a class in making camera lenses, offered in partnership with Canon, which drew 70 students, twice the expected turnout, said Toyohiko Yatagai, head of the university's center for optics research.
But engineering students see themselves as a vanishing breed. Masafumi Hikita, a 24-year-old electric engineering senior, said most of his former high school classmates chose college majors in economics to pursue "easier money" in finance and banking. In fact, friends and neighbors were surprised he picked a difficult field like engineering, he said, with a reputation for long hours.
Mr. Hikita and other engineering students say their dwindling numbers offer one benefit: they are a hot commodity among corporate recruiters. A labor ministry survey last year showed there were 4.5 job openings for every graduate specializing in fields like electronic machinery.
"We don't need to find jobs," said Kenta Yaegashi, 24, another electrical engineering senior. "They find us." He said his father, also an engineer, was envious of the current sellers's market, much less crowded than the packed field he faced 30 years ago. Even top manufacturers, who once had their pick of elite universities, say they now have to court talent. This means companies must adapt their recruiting pitches to appeal to changing social attitudes.
So, Nissan tells students they can advance their careers more quickly there than at more traditional Japanese companies. The carmaker emphasizes that it offers faster promotions, bigger pay raises and even "career coaches" to help young talent ascend the corporate ladder.
"Students today are more demanding and individualistic, like Westerners," said Hitoshi Kawaguchi, senior vice president in charge of human resources at Nissan.
On the more offbeat side, an ad for the steel industry features a long-haired guitarist in spandex pants shouting, "Metal rocks!"
One source Japan has not yet fully tapped is foreign workers unlike Silicon Valley, filled with specialists in information technology, or IT, from developing nations like India and China.
According to government statistics, Japan had 157,719 foreigners working in highly skilled professions in 2006, twice as many as a decade ago, but still a far cry from the 7.8 million in the United States. Britain has also been aggressively recruiting foreign engineers, as have Singapore and South Korea, labor experts say.
"Japan is losing out in the global market for top IT engineers," said Anthony D Costa, a professor at Copenhagen Business School, who has studied the migration of Indian engineers.
Companies are scrambling to change tactics now.
For instance, Kizou Tagomori, director of recruitment at Fujitsu, said the computer maker and its affiliates routinely fell about 10 percent shy of their annual hiring goal of 2,000 new employees. Fearing chronic shortages, the company has begun hiring foreigners to work in Japan.
Starting in 2003, Fujitsu began hiring about 30 foreigners a year, mostly other Asians who had graduated from Japanese universities. Initially, many managers were reluctant to accept them. Mr. Tagomori said they are now gaining acceptance.
Fujitsu's 10 Indian employees in Japan won over some of their co-workers by organizing a cricket team, he said.
But Fujitsu remains an exception. In an economic ministry survey last year, 79 percent of Japanese companies say they either have no plans to hire foreign engineers or are undecided. The ministry said most managers still feared that foreigners would not be able to adapt to Japan's language or corporate culture.
To combat these attitudes, the ministry began the Asian Talent Fund, a $30 million-a-year effort to offer Asian students Japanese language training and internships in order to help them find work here.
"If these students do well, they can change Japanese attitudes drastically," said Go Takizawa, deputy director of the ministry's human resource policy division.
Nonetheless, labor experts warn Japan may be doing too little, too late. They say the country has already gained a negative reputation as discriminating against foreign employees, with weak job guarantees and glass ceilings. Experts say Indian and other engineers will often opt for more open markets like the United States.
Indeed, a growing number of Japanese companies are having more success by building new research and development centers in countries with surpluses of engineers. Toyo Engineering, which designs chemical factories, said it and its affiliates now employ more engineers abroad 3,000, mostly in India, Thailand and Malaysia than in Japan, where they have 2,500 workers.
With corporate Japan still reluctant to accept foreigners, a half-dozen staffing companies have stepped into the breach by hiring Chinese and South Korean engineers to send to Japanese companies on a temporary basis. One of the biggest is Altech, which has set up training centers at two Chinese universities to recruit engineering students and train them in Japanese language and business customs. Of Altech's roughly 2,400 engineers, 138 are Chinese, and the company plans to hire more at a rate of 200 per year.
One of the first it hired was He Xifen, a 27-year-old mechanical engineer from Qingdao University of Science and Technology who joined Altech two and a half years ago. She said her friends back home envy her because she works with advanced Japanese technology, and earns three or four times more than she would in China.
While Japanese clients appear uncertain at first about how to deal with foreigners, she said, they quickly catch on and she usually feels welcome.
"Foreign engineers are becoming accepted," said Shigetaka Wako, a spokesman for Altech. "Japan is slowly realizing that its economy cannot continue without them."
Indian IT firms eye Japan to counter US slowdown
HYDERABAD: Indian IT firms, bracing for an expected slowdown in the US economy, have zoomed in on Japan as a strategic market for future investments.
The Japanese IT market, the biggest after the US, is estimated at around $150 billion. At present, Indian firms get only 2-4% of their revenues from Japan and doubling this could be in their future growth agenda.
TCS, for instance, has built a facility in Yokohama, and set up a Japan offshore delivery centres (JODCs) in Kolkata and Pune. The country's biggest software services company has about 2,000 engineers servicing Japanese customers globally. The Asia Pacific region, including Japan, contributes around 5.5% of its revenues of Rs 5,923 crore in third quarter of FY08.
"Our Kolkata centre is the knowledge hub for Japan. It works with other satellite J-ODCs in China and other global development centers in India to serve Japanese clients," said Ashok Ganesh Pai, deputy general manager, TCS-Japan.
According to Jonathan Browne, senior analyst at Forrester Research-Japan, Indian vendors have a chance to diversify into the Japanese market in the long term. But for now, the Japanese market is not ready for offshoring.
Indian firms believe the Japanese market is under pressure to cut costs and raise efficiency. Wipro has around 450 employees in Japan which made up around 3% of revenues last fiscal. Satyam has set up a Japan Centre of Excellence, with around 100 engineers from India, China, Vietnam and Japan.
Satyam to set up training centre in Japan
MUMBAI: IT major Satyam Computer Services today said it will set up a training centre in Japan in a bid to strengthen its presence in that country.
The company would set up a Centre of Excellence(COE), named Kanzen, in Japan for training the country's engineering graduates, it informed the Bombay Stock Exchange.
"This initiative is an innovation to traditional models of delivering offshore value to Japan from India. The process has been initiated to build bilingual talent pool in India, China and Japan," Satyam North Asia Head Harsh Vardhan said.
While some of the Indian companies focussed on Japan have been working towards higher investments in the country that alone might not be the solution to the problem, as India has an acute shortage of bilingual engineers, he added.
The company has over 100 engineers operating in the country over the last three months. The team would work in programme managing deliveries out of China, Japan and India. Besides, Satyam has been successfully sourcing Japanese bilingual manpower from Vietnam.
Shares of Satyam were trading at Rs 439.75, up 0.07 per cent in the afternoon trade on the BSE.
TCS bets on embedded systems to spur growth in Japan
MUMBAI: Country's largest software company Tata Consultancy Services (TCS) on Sunday announced a series of investments in the field of embedded systems to help Japanese corporations innovate and remain globally competitive.
TCS will invest $10 million over the next 12 months for a dedicated Innovation Lab for embedded systems research in automotive, consumer electronics, telecom, and office automation to fuel innovative solutions for the Japanese market, a company release said here on Sunday.
The new lab will be based in Pune along with a Centre of Excellence in embedded systems in Yokohama, Japan.
With an initial team of 100 engineers and researchers located across India and Japan, the new lab will also leverage the capabilities of 19 other Innovation Labs as well as the TCS Co-Innovation Network.
TCS currently has more than 6,500 embedded systems engineers servicing global customers, including 500 Embedded Engineers servicing Japanese corporations in Pune, Kolkata and Bangalore.
In addition, TCS will set up its second Japan-focused Offshore Delivery Center (J-ODC) at Pune focussed on embedded systems to provide quality, a delivery framework and infrastructure customised for the needs of Japanese customers.
Simultaneously, TCS has identified several engineering colleges and language solutions business partners to enlarge the pool of Japanese-speaking engineers. It has implemented program to teach Japanese language to students selected by TCS during their Engineering course.
"Japan, the second largest market in terms of technology spend globally, is a key strategic market for TCS," said Girija Pande, Executive Vice President and Head TCS-Asia Pacific.
"Being a world-class Manufacturing and Hi-Tech hub, we have identified embedded systems as one of the key focus areas for our growth strategy in Japan," Pande said.
"With a significant talent shortage facing the Japanese market TCS is investing in embedded systems R&D and Japan specific Delivery Center, to help our customers in applied innovation and reducing their go-to-market cycle time," said Masahiko Kaji, President of TCS Japan.
There are more than 1,800 TCS associates servicing Japanese corporations worldwide, including more than 300 associates in Japan.
Indian IT firms queue for Japan's outsourcing pie
Thousands of miles away from Japan, a group of software engineers gather every six months in a southern Indian city to learn the Japanese language, cultural nuances and etiquette.
The Shimpo programme, conducted by India's third-largest software firm Wipro, in Chennai is an indication of Indian companies' new-found interest in Japan as growing competition and a shortage of manpower boosts outsourcing.
The total IT outsourcing market in Japan, the world's second-biggest spender on technology after the United States, grew to $15 billion in 2005, up 6.7 per cent from the previous year, International Data Corp (IDC) Japan said in a recent report.
The market is forecast to grow 5.8 per cent per year through 2010 to 2.34 trillion yen on ramped up IT spending by financial companies as Japan's economy shakes off economic stagnation.
"The Japanese market is opening up fairly significantly, just like Europe a couple of years back," Virender Aggarwal, senior vice president for Asia Pacific, Middle East, India and Africa at India's number-four software exporter, Satyam Computer Services, said.
In March, New York-listed Satyam won a deal to manage Nissan Motor Co.'s business applications for the North American market. Wipro, which has around 60 clients in Japan, entered into an agreement with All Nippon Airways in September to support financial applications.
India's software and back-office services exports to Japan are forecast to rise to $1.5 billion by 2010 from $500 million in the fiscal year 2004-05, according to the latest data available from the National Association of Software and Service Companies.
With a bulk of Japanese outsourcing contracts flowing into neighbouring China, Indian software companies are rapidly expanding their presence in China to grab a larger share of the business pie.
In November, Satyam, which already has development centres in Chinese cities of Shanghai and Dalian, launched another facility in Guangzhou for its customers in Japan and Hong Kong.
"The kind of manufacturing investments that Japan has in China and the number of joint ventures they have has also given them more comfort (to outsource jobs to China)," Aggarwal said.
"We will continue to service Japan from India but increasingly my feeling is it will be getting done more and more from China."
Tata Consultancy Services (TCS), Infosys Technologies and Wipro, Satyam's bigger rivals, have also set up operations in China over the last two years, lured by cheaper costs and big business potential.
"Outsourcing to countries like China, India and Vietnam is likely to keep growing," Yukiharu Yorifuji, senior market analyst at IDC Japan, said, citing a looming skills shortage as Japanese baby-boomers reach retirement age.
Many Japanese clients are looking at India, where wages for engineers are sharply lower than those in Japan, Yorifuji said.
In October, TCS, India's largest software exporter, opened a software development centre in the eastern Indian city of Kolkata as it expects demand for outsourcing to grow rapidly in Japan.
"Our business in the Japan market has been growing steadily for the last three years," TCS' executive vice president, N. Chandrasekaran, said.
"We expect the growth rate to accelerate in the next 12-24 months time period. We are very, very bullish on that market."
Japan blips on radar of Indian IT companies
HYDERABAD: Having marked their presence in the US markets by capturing a fair deal of business there, Indian IT companies are now eyeing Japan for opportunities.
Despite being the second largest economy in the world and one of the most advanced nations in information and communication technology, Japan still remains a market to be tapped. Currently, Indian software exports to Japan accounts for only three per cen t of the total market.
"Precisely, this is the factor which is making Indian IT companies to look at Japan," Mr Sanjay Khendry, Vice President (Business Development) of Sierra Atlantic, told PTI.
The company, which is eyeing Japan for considerable business, has already over $1 million business with Japanese companies.
"We see lot of business potential there. Japan being an expensive economy with careful eye for quality, Indian firms have an advantage. The cost-advantage in offshoring to India without compromising on quality is a major pull for Japanese companies," sai d Mr Khendry.
Though language has been a major barrier in Japan, many companies are finding ways to deal with it, he adds. - PTI
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