The language barrier is an obvious but sometimes underestimated obstacle to effectively doing business in China and Chavali advises companies thinking of setting up business in China to employ staff who were truly multilingual. “It doesn’t work too well to bring in expatriates to manage large projects,” he said.
He also warned that Request for Proposals (RFP’s) in China tended to be written at a very high level, making it hard to understand what the customer wanted.“Interpreting them requires considerable skills. You can’t do everything the client is asking for, but you can’t say that you can’t do it either. You have to find a middle ground,” Chavali advised.
Chinese partners tended to be very aggressive on pricing as well, meaning that foreign companies had to partner with local ones with a low cost model. It was also important to have a local partner with good government relationships, he said.
Turning to Unisys activities in China, Chavali revealed that Air China had recently signed a contract to use LMS, the Unisys cargo system, on a hosted basis. LMS already handled an estimated 40 per cent of all cargo shipments worldwide, and Chavali noted that it was currently being re-engineered to move it to next generation Java and open source-based platform.
Meanwhile, though no Asian carrier is yet using Cargo Portal Services, the Unisys- backed online cargo booking service, Chavali said that Chinese forwarders were in fact the fourth largest group of users of the service, accounting for 20 per cent of all bookings, with the bulk of e-bookings seemed to be coming from small to medium sized players.
Other aviation-related Unisys activities in China included providing passenger and departure control systems for Cathay Pacific, and a significant business relationship with TravelSky, a provider of passenger reservation services to Chinese carriers. Unisys was also the overall master system integrator for the new Guangzhou airport and is providing the same service for the new third passenger terminal at Beijing airport, due to open in time for the 2008 Olympics.
In addition, Shanghai was the latest location to benefit from Unisys’ policy of global sourcing, whereby it is using lower cost staff in developing countries to reduce its programming and software development costs. The company’s first off shore centre was set up in India, followed by Hungary and then Shanghai in 2006.
“Shanghai specialises in open source and J2E, and serves Japan, Korea and Taiwan as well as mainland China,” Chavali said. “The strategy is for the work to be done where the quality is best, where the cost is lowest and where the client wants it to be done.”