Article | MIS Quarterly Executive | March 2012

China's Growing IT Services and Software Industry: Challenges and Implications

by F. Warren McFarlan, Ning Jia and Justin Wong

Abstract

The Chinese management software and IT services industry has grown dramatically over the past two decades and today is about the size of the Indian industry a decade ago. The objective of this article is to help CIOs in firms outside of China better understand the current and future potential of this industry. Based on recent in-depth case findings of two large and fast-growing suppliers-UFIDA and Kingdee-as well as other vendors and client firms in China, we share what we see as the challenges facing the firms in the Chinese management software and IT services industry as players seek to develop their capabilities for their growing domestic market. We describe the implications of our findings for CIOs in developed countries. Our main prediction is that the challenges of serving the domestic market will mean that Chinese management software and IT service firms will likely have an inward focus over the next five years and will, therefore, only slowly emerge onto the global market.

Keywords: Growth and Development; Information Technology; Software; Problems and Challenges; Information Technology Industry; China;

Citation:

McFarlan, F. Warren, Ning Jia, and Justin Wong. "China's Growing IT Services and Software Industry: Challenges and Implications." MIS Quarterly Executive 11, no. 1 (March 2012).