It's interesting to note that the two of them represent two phases of China's economic development: In the past 20 years, Glanz, the representative of "Made in China," has been invincible, relying on its huge cost advantage. In the information industry, although there have been Lenovo, Huawei, Haier and other heavyweight manufacturing enterprises with revenue of more than 100 billion yuan, but in the field of software, the performance of Chinese companies is much less impressive, so far there is still no world-class software companies, even Neusoft such as the industry's largest, its revenue is only more than 3 billion yuan. Not to say that compared with Microsoft, SAP and other international software giants, that is, compared with TCS, Infosys and other Indian counterparts is still a significant gap.
"Neusoft started in a market where there was no software, a time when software had no value. Today, we see that software has stepped down from the altar of high technology and become a consumer product for everyone, and the software industry has become a new industry going global." Liu Jiren has already had a premonition that the good days of Neusoft are coming soon. The next 10 years will be the 10 years of China's software industry's rapid development and play a more important role in the national economy, and his leadership of Neusoft has done 18 years of preparation for this. Indeed, over the past 18 years, Neusoft, under the leadership of Liu Jiren, has taken a very unique path: in the era when software was still unsellable, it put forward the concept of combining software and product engineering, and implanted Neusoft's software into the world's major brands of car stereos, cell phones and even CT machines in hospitals; entered the Japanese market at an early stage, realizing the transnational operation of Chinese software enterprises; foresaw the talent bottleneck in China's software industry at an early stage, and took the lead in the development of China's software industry; and took the lead in the development of China's software industry in the next decade. The software industry's talent bottleneck, the first in Dalian, Chengdu and the South China Sea to open Neusoft Information Engineering School to train software talents ...... Liu Jiren's actions were all unintelligible and incomprehensible at the time, but a few years later they made people come to their senses.
As Liu Jiren's good friend, management guru Kenichi Ohmae has witnessed Neusoft's growth, and every time he comes to China or Liu Jiren goes to Japan, the two have in-depth exchanges. Kenichi Ohmae appreciates the concept of "Beyond Technology" put forward by Liu Jiren: "As Liu Jiren said, to go beyond technology is to create an 'ecosystem' that can achieve a ****-win situation, which is what I've learned from any business book I've read in my 35 years of management consulting. This is an innovative concept that I have not seen in any business book in my 35 years in management consulting." It's said that every time Liu Jiren goes out to meet a client, he's very direct: "Look, I can bring you this value, what value can you bring me?"
In 2009, when the economic crisis was raging and companies were hugging each other through the winter, Liu Jiren did a couple of big things: Neusoft set up a European company and stepped up its efforts to expand in the United States. After an unsuccessful attempt to acquire Dalian Huaxin, the No. 2 software outsourcing company in China, Neusoft decisively acquired 100% of the shares of three cell phone software companies under Finland's Sesca, which is expected to cost up to 12 million euros.
Neusoft's new software park in Dalian sits on two hills connected by a bridge, with a gray-brown stone facade and a cluster of domed buildings resembling a castle, which was Liu Jiren's idea. In the past years, he has not traveled an unusual path; in the future, he will lead Neusoft to continue to go this way. Reporter: The U.S. financial crisis and the ensuing global recession have had a significant negative impact on business activities around the world. At a time when most companies are tightening their belts, why is Neusoft expanding?
Liu Jiren: Neusoft's actions this time are not directly related to the crisis or not in nature. We have to look for our own opportunities at all times. If you always think that you will adjust in the future, then you have to act today.
Of course, any crisis brings adjustment. But in the case of this global crisis, it has not changed the trend of globalization, nor has it changed the trend of global industrial transfer: global R&D resources are shifting from the West to the East, the status of countries is becoming more equal, the spirit of corporate cooperation is being strengthened, and human resources are being better integrated on a global scale. In this process, the global political system has also changed significantly. The opportunity for such a major readjustment means for Neusoft that we can seek some opportunities for leapfrogging and better positioning in the value chain. That's why we will act more aggressively in the crisis.
Reporter: What preparations have Neusoft made over the past year for this expansion?
Liu Jiren: We have made preparations in two main areas: one is to improve our own organizational structure and management level, and the other is to speed up the pace of innovation. 2009, Neusoft released several major innovations, such as the 16-slice helical CT and the 1.5T magnetic **** vibration imaging system, and so on, which have played a positive role in our business. Reporter: Japan is currently the most important market for Neusoft overseas. What is the prospect of the Japanese market in the next three to five years?
Liu Jiren: We are relatively lucky. The worse the market gets, the more opportunities we have; it seems that the economic situation in Japan is not going to improve in the short term, so we have more opportunities. At the end of the day, the prices of products are now decreasing while costs are rising, which makes Neusoft's value come out. Japanese companies are having a hard time and need to reorganize, and with reorganization we have the opportunity to enter. Chairman Mao once said "poverty is a sign of change", and the time has finally come.
Reporter: We have seen that Neusoft's outsourcing business used to be mainly in the Japanese market, but in 2009 Neusoft set up a European company, and at the same time increased its expansion efforts in the U.S. Does it mean that you are going to change the business strategy of relying on the Japanese market for outsourcing business in the past?
Liu Jiren: As a matter of fact, the process of internationalization is also a process of gradually gaining customers' trust. Our first step was to achieve success in Japan, and that was our logic, because the first step is always to get customers to trust you. After the success in Japan, we started to copy the same model in Europe and the US. From now on, it seems to be very successful.
Reporter: Specifically, how will Neusoft expand into the European and American markets?
Liu Jiren: We almost completely localize our operations and use local people. We transform ourselves, not them, so that we can better match the local situation, such as working hours, vacation, culture, etc. These do not require them to change, but to make our system to adapt and synergize with them, to meet the need to work together. We chose two local people to be the president of Neusoft Europe and Neusoft America. Ninety-nine percent of the local staff are not Chinese, so we have to use a local person who knows their culture, their behavior, their thinking, their customs and is the most appropriate person to manage them.
Reporter: What percentage of Neusoft's international business revenue will each come from the Japanese, European and U.S. markets in the future?
Liu Jiren: We will have a very balanced development in the future. in 2010, we will double the number of employees overseas from 400 to 800 now. Reporter: In August 2009, Neusoft spent a huge sum of money to acquire 100% of the shares of three companies owned by Sesca in Finland, which are engaged in high-end smartphone software development business, and this is the largest overseas merger and acquisition in the history of Neusoft. Why did Neusoft make this acquisition?
Liu Jiren: What Neusoft values most about this acquisition is their front-end (customer-facing) talent, which will help us expand our business there. The merger is our first step, and the second step is to combine the talent we get from this merger with local resources in China, which is the purpose of the merger.
Reporter: Through this M&A, do you think Neusoft's front-end ability to deal with customers in Europe and the United States is sufficient?
Liu Jiren: Not enough, it needs to be strengthened.
Reporter: A large part of the revenue of these three companies comes from Nokia's orders, and Neusoft was already among the top 10 software development suppliers of Nokia before the acquisition, so what does this merger and acquisition do for Neusoft to further take Nokia's orders?
Liu Jiren: The biggest help is that we have created value for our customers, and after this acquisition, we will hopefully create even more value for our customers.
Reporter: If Nokia gives you a much larger software development order now, will Neusoft be able to take it?
Liu Jiren: No problem.
Reporter: At present, Nokia's software operating system platform is mainly Symbian. We have seen that Symbian's market share in the global cell phone operating system has declined to some extent in recent years. If Neusoft just puts its software development business on top of Symbian, will there be certain risks?
Liu Jiren: As a matter of fact, Neusoft already has a full range of solutions in terms of cell phone operating systems. We have Android's platform, Japan's NTT DoCoMo's platform, and many other platforms, and Neusoft is able to provide a total solution for all the mainstream cell phone operating system platforms.
Reporter: How do you evaluate the effect in the past few months after the acquisition?
Liu Jiren: In fact, we are doing very well in Finland now. The Finnish management team is now being particularly positive, and the company is seeing positive changes in terms of revenue and cash flow. Our integration has been successful, and we'll see an even bigger turnaround a year from now.
Reporter: We see that all three acquired companies originally had employee shares, and after the acquisition was completed these employees' shares have been redeemed, what can be the next step to better incentivize the employees?
Liu Jiren: Our incentives include basic salaries and bonuses. In addition, also set up a whole set of incentive programs to incentivize our employees of these acquired companies, to make them feel better than the original incentives. It is definitely not possible to treat them worse than before after the acquisition. Reporter: With Neusoft's expansion in overseas markets, is there a shortage of human resources in the back-end? Do you have any good ways to solve the problem of human resource shortage?
Liu Jiren: Although our back-end human resources have reached a certain scale, there is still a lot of potential. We have a priority in developing our resources: we see the front-end first, then the back-end, and first develop the front-end resources better, and after that to our own universities. Neusoft has a very good system for human resource development, with systematic training programs with universities, and we have also established human resource development programs in twenty universities across China. We also have training centers for university students, all of which have laid a very good foundation for our human resource development.
Reporter: How can Neusoft build a long-term growth capability?
Liu Jiren: First of all, we need to train and reserve an internationalized talent team, and we need to adjust our management team. Neusoft will conduct a large-scale global recruitment this year to obtain more internationalized talents. In addition, it is important to strengthen the ability to manage a system that is distributed around the world as soon as possible.
The second is innovation. We are a latecomer, a relatively young company, how to get ahead? We need to innovate. For this reason, Neusoft has been continuously investing in innovation every year, and there have been some results. Reporter: Compared with Indian competitors, what are the different characteristics of Neusoft?
Liu Jiren: Neusoft has the advantage of human resources, the advantage of the local Chinese market, the advantage of the product engineering field, and the advantage of our innovation in the medical field. These characteristics have made Neusoft's business very stable, which is the basis of our confidence in the future.
In comparison, India relies on massive human resources and they rarely sell solutions, whereas we are in fact selling products and constructing a service model through our products. In addition Neusoft has a combination of software and hardware model. It also serves as a product engineering while developing software. Neusoft is now 5,000 to 6,000 people in size and has deep roots in the software field. The combination of these aspects makes us a distinctive company.
Reporter: Is it because of such a unique business model that makes Neusoft hard to find benchmark companies in the world, that's why you said Neusoft doesn't learn from Microsoft or IBM?
Liu Jiren: Neusoft should go its own way. To make an analogy, everyone is walking in a lane, you are in the back, no matter how much horsepower you have, how fast you drive, the result is always a problem, because there is no road for you to walk. Therefore, Neusoft must take a different path to build its own unique capabilities. Neusoft is not a pure product company, not a pure service company, not a pure intellectual property seller, and not a pure software company. When we combine these things together, Neusoft develops its own model. A world in turmoil, a world in readjustment, brings great opportunities to Neusoft, and we have advantages that our competitors often wish they had, but don't have.
Reporter: What are Neusoft's long-term and short-term goals?
Liu Jiren: We will continue to maintain a sustained growth, and in 2009 Neusoft's revenue will exceed 4 billion yuan, and in the future Neusoft's revenue will reach 10 billion yuan or even 20 billion yuan is a visible goal. Of course, Neusoft does not emphasize on the short-term growth of scale, but rather on the long-term competitiveness and the ability to continue to grow, which needs to be built with a solid spirit.
Reporter: As a leading figure in China's software industry, how do you see the development of China's software industry in the past few years?
Liu Jiren: The golden age of China's software industry is coming. If the past 20 years China's software industry is in a process of constant honing, then the next 20 years will be the 20 years of explosive growth and miracles in China's software industry. China's software industry will become more scale, more mature. Although we still have some gaps with India than, but India to reach the current level is only a decade of time. China's software industry must take their own way, we may not need to reach the scale of India, but we have to do more valuable. From "China's price" into "China's value", from "Made in China" into "China's creation", software and information services industry is undoubtedly one of the most important driving factors.
Reporter: The scale of the enterprise has gone up, but at the same time, we have to make sure that we can't lose our soul. How does Neusoft ensure that its corporate culture stays intact in the process of rapid expansion?
Liu Jiren: A good corporate culture can be sustained because people are able to enjoy the positive feedback that corporate culture brings to them; people like this kind of corporate culture because this kind of culture makes everyone feel benefited. Therefore, a good corporate culture is in fact built up by many people *** together. Neusoft's values are respect, simplicity, integrity, teamwork and cooperation. We see this value as an abstraction of everyone's behavior, which everyone prefers and is working for. We have a systematic approach to promote the corporate culture to take root.
Reporter: Neusoft has been growing at a fast pace over the years, what changes have taken place for you as the head of Neusoft?
Liu Jiren: basically a learning process, three people have three people's ideas, a thousand people have a thousand people's ideas, just go out with China's ideas, go to the world with the world's ideas, so I personally the biggest change and feeling is: Neusoft is equivalent to a school, when you are in this, you need to constantly pursue, this pursuit leads to your thinking This pursuit leads to some changes in your thinking and behavior. Mr. Liu Jiren is currently Chairman and CEO of Neusoft Group, and also serves as Vice President of Northeastern University, Director of the National Engineering Research Center for Computer Software, and China's representative on the APEC Business Council. At the same time, Liu Jiren is also a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), a doctoral supervisor and a professor.
Mr. Liu Jiren graduated from the Department of Electronics of Northeastern University in 1980, and did his dissertation research at the Computer Research Institute of the National Bureau of Standards in the U.S. He received his Ph.D. degree from Northeastern University in 1987, which was China's first Ph.D. degree in computer applications, and was promoted to the rank of professor in 1988.
In 1991, Liu Jiren and others founded the Northeast Institute of Technology (NIT) Open Software System Development Company and established the Shenyang Donggong Alpine Software Research Institute as a joint venture with Japan's Alpine Corporation, which was the forerunner of Neusoft Group. 1992 saw the completion of the shareholding reform of Neusoft, and in 1996 it became the first software company listed on the stock market in China. 2001 saw the company's name officially changed to Neusoft Corporation, and 2008 saw the completion of the overall listing of Neusoft Group. In 2008, Neusoft Group completed the overall listing. 2011, Neusoft Group realized revenue of more than 1 billion U.S. dollars, the number of employees more than 20,000 people, is the largest software company in China.