Japanese firms find India new base for software development

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Japanese information technology companies are mapping out a new base to outsource software development in India, according to Nihon Keizai Shimbun.

Japanese firms, which have long shifted their software development to China for low costs, are now faced with a lack of local engineers and deciding to expand their India operations.

With 2,000 engineers to be hired locally by 2009, Fujitsu Ltd plans to develop industrial software for Japanese financial institutions, while Hitachi Ltd is to increase the number of employees by 15 percent for development of more advanced software, the Japanese business daily said.

Fujitsu decided to directly hire 500 engineers who currently receive outsourced work at local developers to improve quality control and provide thorough training.

The company plans to hire 1,500 more engineers by March 2010 for its own development projects at the Indian operations of US company Rapidigm, which Fujitsu acquired in February.

The Japanese electronics company is expected to increase its overseas employees by 2.5 percent to 5,000 people in India, China and the Southeast Asian region, the paper said.

Hitachi also plans to expand its engineering staff from 470 to 540 in India for development of middleware programmes by the end of March 2007.

NEC Corp, which is to form a team of 400 engineers, plans to develop control software for mobile phones in a joint venture with a local partner to have India as its second hub for overseas operation.

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As noted in the October 23, 2006 post, several Japanese IT firms were shifting development work to India. The practical questions that determine success are not the headcount numbers but how the move is organized, managed and measured.

Treat the offshore location as a strategic delivery center, not just a cost play. Keep product and architecture ownership with the core team; use direct hires for IP‑sensitive or strategic modules and vetted vendors for commodity work. Enforce technical gates: continuous integration, automated tests, mandatory code review and a release checklist. Define measurable SLAs (build success rate, defect escape rate, mean time to fix) and review those metrics regularly. Invest in local technical leadership, formal training programs and short rotation assignments to avoid one‑way knowledge transfer.

If the work involves macOS or iOS, make sure remote engineers have Mac hardware, access to Apple developer accounts, a secure code‑signing and provisioning pipeline, and a remote device lab for automated UI testing. Standardize the development environment (toolchain, linters, CI) so builds and tests behave the same in every location.

Onboarding and contract basics to apply immediately:

  1. Product and repo orientation, with documented architecture and deployment notes.
  2. Pair programming and shadowing on a small bug fix.
  3. Deliver a scoped feature with acceptance tests and a demo.
  4. Gradually increase scope with biweekly architecture and QA reviews.

Also require enforceable NDAs/IP assignment, code escrow, clear SLAs and termination terms, and explicit data‑protection clauses.

Expect an initial ramp and higher attrition without retention measures. Budget for HR, training and local leadership. Done well, the shift buys scale and skills; done poorly, it becomes a quality and maintenance burden. This note focuses on how to make such a shift work in practice rather than repeating the article’s numerical details.

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