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| Edited By: Priti Bajaj |Source: |Updated: Sep 14, 2017, 03:19 PM IST
NEW DELHI: TechSpan, an information technology (IT) services company which merged with US-based consulting firm Headstrong in 2003, has big plans for the Japanese market.
It proposes to pump in $18-20 million in its Japanese operations over the next eight months. TechSpan will also step up its team strength to 60 by the end of the year from 40 at present. The company will focus on neutral information technology advisory and project management & design of very large IT projects.
Citing strong information technology governance mechanism and transparency in operations as the trigger to further opening up of the Japanese IT sector, Shinichi Tonomura, representative director, Headstrong Japan, says: “About 70% of our IT budget in Japan is spent for maintenance, IT infrastructure and immature IT management processes. Since a lot of rationalisation is going on in Japanese companies, several opportunities for foreign capital consulting have come up there.”
Though TechSpan’s global revenue from IT services was $100million for 2005, the Japanese operations’ contribution is just 20%.
As the Japanese economy is striding into the second stage of globalisation and growth, Japan is looking at India as a potential supplier of knowledge. According to Tonomura, greater growth in the IT segment is expected because most chief executive officers in Japan are stressing on a glitch-free IT infrastructure.
Though the Japanese IT market is estimated to be $100 billion by the Japan External Trade Organisation (Jetro), Tonomura says India has grabbed a mere $500 million of the market because of language barriers. Indian companies need to build a bi-lingual technical force with aggressive project delivery timelines.
Japan is the world’s second largest software and services market, next only to the US. It accounts for a 60%-70% of the Asia Pacific IT services market and employs over 8 lakh engineers. However, there are only 400 engineers from India working in Japan, according to a Japan Information Service Industry Association (JISA) survey. China is the largest supplier of skilled engineers to Japan.
Japan is looking at a greater exposure to India because of its intellectual potential, says Tonomura. “Earlier the economy was riding high on the back of exports, primarily to US, but now this model does not work as labour costs have become very high. As a result, the only way to reap profits is to go for knowledge export.” This is where India IT talent comes into play.
