Outsourcing Technology: Japan on a new path of discovery

Outsourcing has been approached with cautious steps by the Japanese business industry. However, there has been a radical change in the attitude towards this business model. More frequently, asset managers in Japan have been taking decisions with regard to outsourcing middle- and back-office functions, which has given a boost to the BPO industry. With regard to outsourcing technology, Japan has been taking steps in this direction as well.
Tokyo, Japan

A study from State Street, the enterprise that partners with global investors for providing comprehensive financial services, reports that there are signs in the business horizon, indicating an increase in outsourcing operations. According to this report, the nascent BPO market in Japan is progressing at a rate than previously witnessed in the industry. This paper, released by State Street as part of the Vision series, states that asset managers have been using outsourcing for ensuring sustainability.

A large proportion of managers have overcome traditional resistance to outsourcing technology; Japan is now surging forward with the outsourcing of non-key functions that include middle-and back-office operations. For instance, since 2008, the Japanese asset management industry has been static, and at present, it is sluggish. Then again, long-term prospects look promising. With outsourcing technology, Japan is expected to move ahead in the BPO sector.

Outsourcing technology: Japan seeks new allies

The Japanese market is estimated to attain a value of US$5 trillion by the year 2016. Meanwhile, Vietnamese enterprises stand to gain from the change of attitude in the Japanese IT industry. Enhancing these opportunities is the tension that exists between China and Japan. Hence the Vietnamese BPO sector is expected to win more orders for outsourcing technology. Japan has now increased the total value of contracts it has signed with Vietnam.

The number of Vietnamese companies that carries out outsourcing work for Japanese IT firms has been growing at a steady rate. As regards outsourcing technology, Japan has been awarding contracts to Vietnam companies like TMA Solutions. Other enterprises have also managed to benefit from Japan’s changing approach to business.  FPT Software, yet another service provider in the Vietnamese IT sector, had reported last year that the company’s biggest exporting market was Japan.

Even though, the IT sector is slowing down, its outsourcing segment shows no sign of declining. This global picture has reflected in the Japanese IT industry, which has been aiming to give more thrust to BPO operations. In addition, the economic recession has forced companies to look at new strategies to improve business by cutting down on costs, in particular, in the IT sector.

The concept of outsourcing has evolved to attain a full-fledged center of business operations in Japan. The future of BPO in the country will be determined by the extent of focus on technology and related operations.

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