As the world’s dominant emerging market, all eyes are on what kind of infrastructures China is putting place to ensure best practice business processes and a smooth interface with the international community.
One of the areas within this is how the country is addressing the development of software applications that underpin both public and private sector organisations and to what degree internationally recognised business process standards such as CMMI (Capability Maturity Model Integration) are being embraced by CIOs.
Like India before it, where most application development suppliers now boast a high level of CMMI compliance, the Chinese government has mandated that its own version of CMMI, called GJB5000. This has been developed by the military and is being adopted initially within the public sector, but will eventually be used by commercial organisations.
Indeed, in order to win government contracts, suppliers are being encouraged to become CMMI certified with financial inducements to reach increased levels. At the moment there are not particular rating targets to achieve a particular CMMI level but the trend is in this direction.
The same adherence to a single standardised best practice methodology is not yet present within the business community at large however, and this remains a challenge.
The CIOs of China’s multinationals, particularly within financial services and telecommunications, are pioneering CMMI-style standards because they can see the long-term benefits of standardisation including integrated information flows and automated processes, yet even here there is still a steep learning curve.
One of the reasons why the adoption of an international development standard is slow to gain traction is an historical fondness for the Delphi approach, a consensus-led project development methodology popular some years ago in developed markets but which has more recently been somewhat overshadowed by quantitative, measurable approaches suggested by the CMMI.
This conjures up a group of experts in a room – the CIO, CFO, COO and other stakeholders – sitting around a table hammering out IT project plans and business processes to be implemented within their company.
One reason this approach is attractive is because many organisations like to feel they have a unique environment that requires a unique solution. The problem is that the idea of ‘unique’ and ‘standardised’ are diametrically opposed.
Not only is the Delphi approach expensive in terms of man-hours, it inevitably represents a collection of opinions and such a personalised solution proposes major challenges if the team who designed it leave the company and are no longer able to maintain or drive it forward. Even if it based on a standardised approach, the results from this kind of informal collaboration can easily be overturned by the CEO.
For all these reasons we advocate to our CIO clients in China – typically multinational banks, telecommunications and outsourcing companies – an industry standard knowledge base that ‘cans’ the experience of many to provide a matrix of decision-making data on costs, time projections, etc. for complex IT projects.
The Chinese government recognises the long-term implications of implementing best practice industry standard business and operational procedures, which is why it has mandated the adoption of CMMI. There is much as stake. Optimum process efficiencies require conformance to a single, universally accepted way of doing things – a fact that is true in any market or organisational environment.
However, in China’s case, there is also the issue of economies of scale. Many Chinese companies are huge. China Mobile, as an example, has some 250 million customers, which is greater than the total population of the USA. By contrast ATT Wireless has 50 million customers. This means that by applying industry standard processes, these behemoths can achieve immense economies of scale.
It is interesting to compare India with China, given that India is at a different point on the timeline of a similar journey. Over the past ten years in India a significant investment has been made in gaining CMMI credentials and today there are very few IT development companies that would claim to have achieved less than CMMI 4 or 5.
In China things are just ramping up. Outsourcing organisations are becoming common but are developing according to a different model. In India there are a handful of very large (100,000 + employees) outsourcers including Infosys, Wipro, Tata, etc. which have built up around massive cities like Bangalore within a mainly agrarian society.
In China, because things are just starting, there are only a few outsourcers that have tens of thousands of employees or more. Rather, the trend is for a growing number of small segmented players that serve a widespread and rapidly growing network of commercial centres across numerous industries.
And unlike India, China’s internal market is so large that outsourcers need never look outside China’s borders to find business opportunities – a fact that makes the adoption of international standards an additional challenge.
That said, the country and it’s IT fraternity is committed to joining the international community at the leading-edge business and technology development. All government agencies must have achieved CMMI-level 2 by 1012 and everyone, including commercial sector, must be CMMI-level 3 by 2015. A tall order perhaps, but as the rest of the world is witnessing, China is making quantum strides in every area of endeavour.
Michael Bragen, works for Software Productivity Research in Beijing
Paul Michaels is director of research at Metri UK