Study on Hong Kong IT Services Sector 2006 by bloved

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									Study on Hong Kong IT Services Sector 2006
Fritz Chiu Principal Consultant
14/3/2007

Background
Office of the Government Chief Information Officer (OGCIO) commissioned Hong Kong Productivity Council to conduct a study on the Hong Kong IT Services Sector. The main objective is to provide an updated and comprehensive analysis on the demographics, product and service offerings, target markets, challenges, business opportunities and future growth of the Hong Kong IT Services Sector.

Research methodology (1)
According to the Census & Statistics Department (C&SD), the IT Services Sector covers companies providing: Software development and maintenance services. Data processing and tabulating services. Other IT related services. Engineering and technical services related to computer and telecommunications equipment.

Research methodology (2)
Sampling frame: database maintained by C&SD Survey technique: telephone and face-to-face interviews Target respondents: business decision makers No. of surveyed companies: 308 companies were successfully interviewed by telephone during Sep – Oct 2006 (phase I) 10 face-to-face interviews were conducted during Dec 2006 – Jan 2007 (phase II)

Manpower (1)
Hong Kong IT Services Sector is mainly composed of SMEs.
> 50 4.9% 21 - 50 15.9%

1-5 35.1%

11 - 20 21.4%

6 - 10 22.7%

Source: HKPC 2006

Manpower (2)
IT staff accounted for 68.1% of the aggregated number of employees in Hong Kong in the sample. Manpower structure of IT staff:
Technical Support 24.1% Project Manager/Consultant 26.2%

System Architect 10.4%

Source: HKPC 2006
System Analyst/Programmer 33.3% Quality Assurance 6.0%

Products and Services (1)

89% of the interviewed companies provided software. Major software specialized: Enterprise Resources Planning (21.5%) and E-commerce/Internet (16.8%
Enterprise Resources Planning E-commerce/Internet Accounting Customer Relationship Management Portal/Content Management POS/Retail Management Logistics Banking/Finance Communications Human Resources/Payroll Import/Export/Trading
0% n=274 respondents (Multiple answers allowed)

21.5% 16.8% 10.9% 10.9% 10.9% 9.9% 8.4% 8.0% 6.6% 5.8% 5.8%
10% 20% 30% Source: HKPC 2006

Products and Services (2)
Major IT services specialized: Software design and development (89%) IT consultancy (36.7%)
Software design and development IT consultancy Application support and maintenance System integration and implementation Web design and development Hardware consultancy Hardware support and maintenance Wesite hosting services Infrastructure consultancy and support Hardware design and development
0%

89.0% 36.7% 29.2% 20.5% 17.5% 15.9% 13.6% 11.0% 7.8% 6.8%
25% 50% 75% 100%

(Multiple answers allowed)

Source: HKPC 2006

Products and Services (3)
Geographic markets served: Hong Kong (78.2%); Mainland China (12.7%); Other economies (9.1%)
North America Rest of Asia/Pacific 2.2% 1.7% ASEAN countries* 3.0% Japan 1.0% Mainland China 12.7% Europe 1.0% Other regions 0.2%

Hong Kong 78.2%

SEAN countries include Brunei, Cambodia,

Source: HKPC 2006

donesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam

Market Outlook
Gentle growth in the industry
Projected manpower growth in the next 12 months: Hong Kong (5.2%); Mainland China (8.8%); Overseas (7.9%) Projected revenue growth in 2006 Hong Kong (11.6%); Mainland China (10.8%); Overseas (10.1%) Market expansion

Outsourcing
26.1% and 21.1% of the respondents were interested in the export of software products and outsourcing services in 2006 accordingly.

Mainland
33.8% of the surveyed companies had already had operations in the Mainland. Projected manpower growth in the next 12 months is 8.8%. Projected revenue growth in 2006 is 10.8%. 72.4% of the surveyed companies were interested in developing the Mainland market.

Overseas Markets
14% of the interviewed companies had already set up their branch offices in overseas economies. Projected manpower growth in the next 12 months is 7.9%. Projected revenue growth in 2006 is 10.1%. 54.4% of the interviewed companies were interested in the overseas markets.

Companies’ Success Factors
10 case studies from: digital entertainment open source wireless/mobile solutions data centre e-business outsourcing information security Sharing on: General Management Strategy Human Resources Management Strategy Marketing Strategy Partnership Strategy

General Management Strategy
Utilize resources from the Government, trade associations and business partners. Know the company’s strengths and weaknesses, positioning and focus. Compete in the market wisely. Adopt process improvement approach. Adhere to the company’s beliefs and pursue a never give up attitude

Human Resources Management Strategy

Provide a harmonious working environment. Apply staff’s expertise. Build up a strong team spirit.

Marketing Strategy
Understand customer needs Develop innovative and market-driven products. Pay attention to the trends and hot topics in the market. Provide high quality products and services. Localize the products and services. Price the products and services wisely. When doing business with customers in foreign market, sufficient local support must be available.

Partnership Strategy
Sustain a long term relationship with customers and business partners. Work with/Offer mutual assistance to other companies in the industry.

Industry support (1)
Funding Innovation and Technology Fund SME funding schemes … Marketing SME Export Marketing Fund Organize large-scale international IT fairs, trade missions, conferences Promote the competitive advantages of Hong Kong’s IT products and success stories Establish business matching platforms (e.g. www.siic.org.hk; www.itsolution.org.hk)

Industry support (2)
Image building Strengthen industry collaboration (e.g. Hong Kong ICT Awards) Quality and standards Promotion of CMM/CMMI -ä´» «÷¾âº ¨§® SI Qualification CertificationpHt긨¦°¶Î² ÒÃ{»è½ (www.hkpc.org/sqa) Education IT training courses Public seminars about the advantages of IT adoption

Industry update (1)
CMM/CMMI Under the CMM Assessment Grant, 8 companies acquired CMM/CMMI qualification; Around 20 CMM/CMMI appraised organizations in Hong Kong SI Qualification CertificationpHtÒÃ{»è½ê¸¨¦°¶Î² -ä´» «÷¾âº ¨§® 1 company has passed assessment Level 2 2 company has passed assessment Level 3 4 company has passed assessment Level 4

Industry update (2)
IT Solution Directory (www.itsolution.org.hk) 720 members 900 solutions On average, 1,200 visitors per month Outsourcing Participated in overseas outsourcing exhibitions: 2005 Outsourcing World Summit (USA) OutsourceWorld London 2005 (UK) 2006 Outsourcing World Summit (USA) Planning to establish the Hong Kong Software Outsourcing Alliance

Enquiries
Study report and case studies can be downloaded from the website of Software Industry Information Centre (www.siic.org.hk) For any enquiries regarding the study report and case studies, please contact Ms. Amanda Chu at 2788 5842 or email to amandac@hkpc.org.


								
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