Select China as an Alternative Destination Managing Risks and Uncertainties in Economic Downturn: Select China as an Alternative Destination  Walter Fang VP of Neusoft Corporation President of Neusoft America Copyright 2009 Neusoft Corporation. All rights reserved.

Risks and Uncertainties in the Context of Today’s Global Economy In the present economic turmoil, companies must look for new markets for growth, in addition to cut costs to survive. Shortened product life cycle presents companies with higher R&D risks, and pressure for faster time to market. Global shortage of IT skills forces companies to turn to countries with abundant cost-effective IT talents. Recent Satyam incident rocked outsourcing industry, and prompted buyers to review their sourcing strategies.

Don’t Put All Your Eggs in One Basket Consider China as Your Alternative Offshore Outsourcing Destination!

China is the Leading Growth Economy in Current Financial Crisis GDP Forecast of Major Economies (2009-2010) Source: World Bank Dec.1 ,2008

China is Beefing up Domestic Demand and Consumption Government Sector: IT market size in China 2005-2012 Manufacturing Industry: IT market size in China 2005-2012 China has launched a 4-trillion-Yuan stimulus to promote domestic demand by upgrading infrastructures, which offers many IT outsourcing opportunities. Lowered export forces Chinese manufacturing companies to focus on product innovation and efficiency improvement, which also creates tremendous opportunities to IT services. In China, more than 85% of IT outsourcing service revenue comes from domestic market, only less than 15% from offshore outsourcing services.

China has a Large Pool of Skilled Human Resources 16 million students in over 2,500 colleges and universities over 4 million, including 60,000 science and technology graduates each year

Chinese Government Supports Outsourcing and the Service Industry Chinese government’s “1000-100-10 Project” to promote service outsourcing 20 designated service outsourcing bases and cities Government funding to support the cultivation of outsourcing talents Favorable policies for outsourcing companies in finance, taxation, capital-raising, telecom services, etc.

Neusoft Overview Started from Northeastern University in 1991 A leading IT solution and service provider in China, with more than 15,000 staff, and total estimated revenue of US$540 million in 2008 The largest offshore outsourcing provider in China The first publicly listed software company in China The first CMM5 and CMMI5 certified software company in China 5 software parks in Shenyang, Dalian, Nanhai, Chengdu, and Nanjing; 3 Neusoft IT Institutes, and subsidiaries in USA, Europe, and Japan.

Recognitions In 2009, Neusoft was listed fifth time in the Global Services 100 and also crowned Top 10 leaders of Emerging Asian Markets. In 2007, Neusoft became the first Chinese company that entered the top 25 among IAOP's Annual Listing of the World's Best Outsourcing Service Providers. In 2007, Neusoft was awarded the title of 2006 CCTV Best Employer. In 2007, Neusoft won China Outstanding Innovation Enterprise Award and China IT Innovation Enterprise Award.

Overcoming Challenges and Changing Perceptions through Innovation China Process Maturity: Still early English Language Challenge: Largely a perception. Sufficient for most ITO & non-voice BPO. Lack of Operations Experts Applying Innovation and Best Practices for Outsourcing Differentiation: Cost alone is not enough. Need to focus on value & build up more differentiation Standards: Opportunity to create quality standards tied to client TCO Challenges: Reputation, Language, Quality, and perception of IP Security problems

Copyright © 2009 by Neusoft Corporation. All rights reserved.