Outsourcing across the border

When cost reduction continues to be Hong Kong enterprises' primary goal for outsourcing, China is often where CIOs seek vast supplies of low-priced talent.

"When making outsourcing decisions, Hong Kong enterprises tend to pick simple and labor-intensive jobs, like basic programs-coding, with the purpose of cost savings," said Greg Au Yeung, fellow of international affairs committee of the Hong Kong Computer Society.

With a vast supply of young and cheap software developers, China is becoming a popular location for software outsourcing, not only for enterprises in Hong Kong, but also around the world. According to market research firm Analysis International, China's software outsourcing market increased about 44 percent in the first quarter of 2006 to RMB2.6 billion (US$326.9 million), from the same period last year.

Au Yeung said when looking for an outsource provider in China, access to the talent pool is a major factor.