Reading of "Guidance on Encouraging Government and Enterprise Outsourcing"
On September 23, 2009, Ministry of Finance and other eight Ministries and Commissions of China jointly issued the Guidance on Encouraging Government and Enterprise Outsourcing to Promote the Development of China＇s Service Outsourcing Industry. Devott believes that the release of this policy indicates that China＇s government support for service outsourcing industry has transferred from the "fostering offshore export" to "nurturing local demand". The release of this policy opened a new outsourcing service area for Chinese outsourcing companies - government outsourcing market.
Devott believes that the Guidance is the first policy which directly supports the outsourcers the Chinese government released. The Guidance itself has great guiding and promoting significance for the service outsourcing industry. Devott is going to give in-depth interpretation and analysis on the Guidance as follows.
1. The Objective of the Guidance
The essence of the document is to encourage forming China＇s outsourcing domestic market taking government and enterprise as the core.
2. The Definition of Outsourcer in the Guidance
The definition of outsourcer in the Guidance (under support) is Chinese governments and enterprises. Even though there is no specific definition in the Guidance, we can expect that the enterprises under encouragement would include domestic, foreign and joint enterprises operating in China.
3. The Definition of Outsourcing in the Guidance
Devott believes that since the concept and scope of service are much more extensive than outsourcing, the definition of outsourcing in the Guidance is also bigger than the traditional scope, which means "service purchasing" could be brought into the support scope in the Guidance.
4. The Definition of Outsourcing Business Scope in the Guidance
From the above-mentioned expressions and examples on business scope, we can see that the business scope of outsourcing under encouragement are mainly focused in the field of ITO, "Data Processing" and "part of the business process"．
5. The Key Evaluation Criteria for Outsourcing Business in the Guidance
Devott believes that taking "related to confidential information or not" as a business standard for outsourcing, from a potential sense point, is mainly for the government outsourcing.
6. The Definition of the Outsourcing Service Form in the Guidance
Devott believes that the definition of the forms of outsourcing services in the Guidance provides a more flexible approach for government outsourcing sectors.
7. The Definition of the Service Provider in the Guidance
After analysis on the definition, we can find out that the Guidance is not so much for encouraging service outsourcing as for the development of modern service industry. Of course, this does not affect the service outsourcing industry to obtain policy support as a key component of modern service industry.
8. The Special Support for Service Outsourcing Enterprises in Undertaking Domestic and International Outsourcing Business
Devott believes the Guidance clearly indicates that the most government outsourcing projects would go towards to professional outsourcing enterprises while enjoying special policy support. Government outsourcing services would become a huge potential market for the service outsourcing enterprises in China.
9. The Twenty Outsourcing Cities Will Become a Breakthrough of Government Outsourcing
10. The Specific Measures for Government in Nurturing the Local Outsourcing Market
The Guidance has certainly made specific measures for government in nurturing the local outsourcing market in the next step.
More information of the Guidance Reading, please visit:
http://www.devott.com/research_insights/article/20091118/
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http://www.chnsourcing.com.cn/research/
