Analysis on productivity improvement in Chinese software enterprises

The 21st century will see the emergence of a service-based economy in which every conceivable element will be either software-enabled or software-constrained. Furthermore, software is an input source whose importance for productivity and innovation is far greater than was reflected in share of GDP. Consequently, software industry will be a mainstay of the Chinese economy, and its output value will occupy a significant portion of the country's gross national product. This paper focuses on the productivity of software enterprises. Firstly this paper outlines the scenario of Chinese software industry. Chinese software industry has grown at more than 20 percent a year since the early 1990s, which is above the world average, with. no indication of slowing. In 2004, there are 700, 000 people directly employed in the software industry, and there are 10, 607 software enterprises spread over the economically developed regions and costal areas such as Beijing, Shanghai, Shenzhen, Dalian, Shenyang, Fujian and Zhuhai. Then this paper points out the key characteristics of software products. Compared with other services and also manufacturing activity, software products are intangible, heterogeneous, mobile and scalable. In conclusion, more attention should be paid to the software products' raw material-the people. Managing human resource is indeed a complex undertaking. Thirdly, this paper analyzes the status quo of productivity in Chinese software companies. Nowadays there is a decline in productivity in other developed countries with the average business productivity is US $35K-50K per person per year and the same probably true of China. Lastly, this paper tries to find the solution to productivity improvement in software companies. At present, China moved from the first stage of maturity( low value-added body shopping) by mid-1990s and has evolved to more customized on-site development work. Key elements to improve the productivity are mentioned, e.g. different measurement methods of productivity, working environment, career path, automation and process management, etc. Especially this paper takes Infosys Technologies Limited-No.1 among the Indian software companies in NASDAQ as an example to demonstrate how Infosys keeps employees more active, innovative and loyal in the company.