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HP: responding to the world in Dalian

2010-08-18

HP Dalian Global Service Center is in charge of providing post-sale services for clients and answering calls from clients, which will be received by engineers who will write down the inquiries and provide corresponding solutions.

HP Dalian Global Service Center, located in Dalian Software Park, covers an area of 12,000 square meters and has more than 1200 employees. The center, the most multilingual one among HP Global Service Centers, has 1700 call agents, including 300 who speak Japanese. As the center receives almost 600,000 calls from mainland China, Japan, Korea, Hong Kong, Taiwan, North American and South Pacific area every month, it has profound influence on Asian clients' impression of HP.

HP Dalian Global Service Center, combined with the service centers in San Jose, Costa Rica and Bangalore, India are in charge of business concerning personal computers, imaging and printing as well as Enterprise and Storage Servers (ESS). In addition, three small service centers help them with the business.

Reorganization of service centers is part of HP global service strategy. HP purchased EDS (Electronic Data Systems Corp.) on August 26, 2008. The deal, which is worth $13.9 billion, makes HP the second largest company in IT service.

Mark Hurd, CEO of HP, when talking about the purpose of the deal, said, “HP's service revenue would double.”

The service revenue takes up only 16% of HP's total revenue now. Combined with EDS, the service revenue would reach $39.4 billion. The service revenue of IBM was $54.1 billion last year.

“Service plays a vital role in the sales of hardware in the IT industry. It is much easier to recommend new equipment when serving the customers.” Zhang Gang said.

In fact, HP was already engaged in service business before it purchased Kangbo Company. The consultancy service of PriceWaterHouse Coopers once became the object of HP. However, the plan aborted as its price was much higher than that of EDS.

In 2002, IBM purchased PriceWaterHouse Coopers at the cost of $3.5 billion, which has become IBM's right arm in the service business. In 2004, IBM sold its PC business to Lenovo, and HP replaced Dell as the top company in the field of PC. When Zhang Gang was appointed as the support manager of HP Dalian Global Service Center, the call agents numbered fewer than 200. The center was nothing but a relocation of the one in Beijing.

In the next three years, the three service centers began to reorganize its business and the number of call agents skyrocketed.

One of the purposes of reorganization was to make more money. By making use of the convenient location, the cluster of employees and the standard hardware equipments, HP hoped the cost could be lowered and the service quality be improved.

In fact, the amount of money saved by collective effect is rather small compared with that of choosing a location with lower labor costs. Bangalore is a popular place for global companies that deal with IT outsourcing services. Indians speak English, and 35% of the IT talent stays in Bangalore.

Zhang Gang, who once worked in India, said, “Dalian boasts not only low labor costs, but also convenient infrastructure facilities, such as communication, transportation and power supply, which are better than those of Bangalore.”

Dalian's government extended support to related enterprises by preferential tax and human resources policies. While the cost of Japanese talent in Dalian is one-half or one-third of that in Japan and the human resources and training costs took up 60% or 70% of the total cost in service center, the cost has decreased more than 40% after the service center in Japan moved to Dalian, according to the statistics of HP.