Indian Programmers Seek Opportunities in Japan

By John Dodd

With an average salary equivalent of only 30,000 to 60,000 yen per month for experienced DOS and UNIX systems analysts in India, and comparable positions in Japan paying 500,000 to 800,000 yen, it is little wonder that Indian companies are beating a path to Japan. From Bombay and Bangalore, a small but growing number of well-organized and well-funded companies are setting up shop in Tokyo. Their target market is largely the programming of turnkey business systems. However, as more and more corporations tu rn to foreign outsourcing as a way to reduce overhead and improve their intellectual skill base, manpower contracts for Indian programmers are also becoming common.

Go East, young man!

Based on club membership lists and known major computer sites, a reasonable estimate would appear that there are about 200 Indian software specialists currently working in Tokyo. (Figures for other parts of Japan are unknown.) Many of these specialists ar e young--in their late twenties or early thirties--and they have a level of education and skill difficult to find in the Japanese software industry. The most common qualification is a master's degree in computer science with three- to five-years of experi ence in a relevant programming field.

The Japan Data Processing and Developing Association predicts that Japan will face a shortage of some 540,000 programmers by the year 2000. So while a pioneering force of 200 may seem a drop in the ocean compared to Japan's overall needs, industry watche rs predict that the number of Indians urlll rise rapidly. This will become especially true as Japanese industry downsizes and adopts the higher complexity of Open Systems solutions.

Kommera Reddy is typical of India's best and brightest. At 30, he is team leader of a development effort at a large toreign bank in Tokyo. Initially brought to Japan for a stint of only six months, the client liked him so much that his employer asked him to extend his stay just a few more months." That was in mid-1993, and he is still here.

Reddy has two master's degrees and is experienced in almost every major RDBMS language, from ORACLE and SYBASE to Foxpro and Access. Reddy confidently says that he can learn a new database language with only two days of exposure and practice. Although he declined to state his salary, he admits that "the allowance is very low compared to Japanese employees." Computing Japan's own inquiries reveal that typically people such as Reddy receive an income of from Y160,000 to 250,000 after accommodation and imme diate living costs.

Quite apart from the cost benefits, Reddy sums up the demand for Indian programmers as, "The Japanese are unable to do 'complete' software that is portable and integrated. I was shocked when I first came to Japan to see that the Japanese teams around me were producing text-handling routines that didn't even have wrap-around handling. The Japanese programmers I have met have a very narrow focus and are not able to consider project issues outside of those assigned to them." He ack nowledges that there are some very talented Japanese programmers around, but feels that "they are still low down on the learning curve for the newer RDBMS languages, and will take time to pick up speed." Successful Indian transplants Probably the best known of the Indian software companies in Tokyo is Tata Consultancy Services (TCS), a subsidiary of Tata Ltd., India's largest conglomerate. TCS is also one of the most successful of the Indian transplants, with Japan-based revenues expected to exceed Y350 million this year. The Japanese operation started as a liaison office in 1987, and upgraded to a branch office in 1992. Company Manager Srinivasan Hari now controls the services of nearly 50 engineers (bot h on-site and off-site) as well as other permanent office staff.

TCS has a strong base upon which to build. Overall, it ranks as the largest software house in South Asia, employing some 3,500 software engineers in India. Reflecting the high degree of competition in the Indian computer industry over 70% of the TCS tech nical staff have a master's degree in engineering.

Tata has another company active in Japan: Tata Unisys. As the name implies, the company is a joint-venture with Unisys Japan and works exclusively on projects for Unisvs customers. Currently Tata Unisys has 8 engineers in Japan, all of whom are software people.

Another company trying hard in Japan is Dastur Engineering International GmbH (Dasturco). Dasturco is a consulting engineering firm that is seeking complex computing and industrial engineering projects. In comparison with TCS and Tata Unisys, Dasturco ha s found it more difficult to break into the Japanese market. Dasturco is still Icarning the ropes on bow to win credibility and acceptance from its target market of Japanese financial and engineering firms. After a year on the ground in Tokyo, the company has yet to land a major software contract; it has been settling instead for more traditional civil engineering jobs.

Opportunities and obstacles

Other countries in the region, such as China and the Philippines, are showing increased interest in selling their software services in Japan, but the Indian companies enjoy a head start because of prior working relationships with large Japanese corporations elsewhere in Asia. TCS has been able to capitalize on such relationships, and Dasturco is trying to do the same. TCS manager Hari feels that his company's merits are two-fold: a familiarity with doing full projects offshore , and the ability to draw on a diverse range of skilled people at short notice. Although there are regular manpowerstyle opportunities being created in Japan by the current recession, most of the Indian firms here prefer to offer full-scale curnkey solutions. Running a manpower business requires extensive attention to administrative details, such as compliance with immigration and labor regulations and obtaining subcontractor licenses. This administrative burden leads many companies to conclude that the manpower approach is not really worth the r equired investment.

The main problem facing any foreign company and its employees is the language. There are few top-quality providers of Japanese language training in India, so TCS makes the best of a difficult situation by employing the exclusive services of a private tra ining company. Its engineers typically study Japanese language part-time for three to six months prior to departing for Japan. While this may not be sufficient for them to become fluent, they at least acquire sufticient skills to interact at the level of their assignment. One advantage for TCS is that its specialty is very advanced systems; and in such cases, English is often the language of choice even in Japan.

Another major difficulty is finding affordable accommodation. This may not seem like an important issue, but problems grow in proportion to the number of local employees. Many Japanese landlords have a strong aversion to renting to foreign tenants, and a s Japanese law does not prohibit non-overt discrimination, suitable apartments for foreign staff are often in short supply. Those places available are often a long commute from the office, with monthly rent of Y150,000 or more. The costs further mount wit h the addition of a 2 or 3-month deposit and the pervasive "present money" and "key money" payments so common in Japan. Simply setting up an apartment for a new employee can cost a company up to Y900,000 even before furnishings.

The high cost of housing in Tokyo is one reason that most companies favor single employees, or encourage married employees to leave their families back in India. For a worker with a family, international school fees can easily surpass even the rental fee s. Tuition at an international school in the Tokyo area runs as high as Y1,700,000 per child per year.

Although start-up costs are high, it can still be a good business decision to bring an Indian programmer or systems analyst to Japan rather than hire locally. With a 1,000% wage differential, an astute company can recoup its investment in just a few mont hs.

Changing attitudes

Even as companies like TCS, Tata Unisys, and Dasturco are making their way to Japan, Japanese software companies are trying to recruit workers closer to home in China, Malaysia, or the Philippines. Language and distance are the main disincentives against going to India. Also, Japanese companies have started more subsidiaries in Southeast Asia than in India over the past five years, in part because government regulation in India makes life difficult for Japanese ventures.

Nevertheless, persistence and technical expertise are two qualities that many Indian companies have in abundance. These are precisely the qualities that are likely to win them jobs and customer loyalty in the future. The recession is changing a lot of at titudes in Japan, and those foreign software and services companies who are already here are turning out to be the beneficiaries of those changes.