Bleum China

After a long week in the office, Eric Rongley’s idea of relaxation is a ten-kilometre run. This is someone with a lot of energy. But that is clearly just what you need to build a software company in Shanghai from scratch to strength of 30 people and a growing list of top-name clientele in less than two years.

Eric has developed successful software businesses in Taiwan and India, but he is in no doubt what has brought him here to create Bleum Incorporated – “this is the most significant city on earth for the next ten years”, the 35-year-old American declares. Why?

One reason is that Chinese businesses are hungry for knowledge and open to new ideas. In IT terms, they are “leapfrogging from the Stone Age to the cutting edge” in a few years. And the sectors that Bleum targets – banking, insurance, securities and telecoms – are developing particularly quickly. China’s membership of the WTO is having very significant impacts on these areas. “Every time a bank creates a new product, every time the regulations change, that is an opportunity for us”, says Rongley. His teams have expertise in banking, customer relationship management, retail “point of sale” technology, insurance, credit cards, ATMs, mobile phones and call centres, amongst others.

But equally important are the people Bleum recruits. “We came to Shanghai because of the talent pool we could find here”, Eric stressed. There is a good supply of high-quality graduates from China’s universities. “We can pick the best students and grow them into smart people”. And also give them better-quality work than some bigger IT companies, he argues – the new staff want to develop real, new software products, not just answer technical queries in a call centre. Eric says can give them that opportunity. Another twenty new “Bleumies” are joining the company this summer from Jiao Tong, Fudan and Nanjing universities.

And looking after his staff is no routine for Rongley – before starting Bleum, he founded Navion (Shanghai) Software Development Company and led it to win “10th Best Employer in Asia” award, sponsored by the Asian Wall Street Journal and Far Eastern Economic Review in September 2001. A leading-edge performance appraisal system, allowances for lunch and transport, and “fun days out” are just some of the benefits that Bleum offers.

So what does Bleum actually do? This is not such a silly question as it might sound. Many potential clients come to the company expecting to buy software products off-the-shelf. “We don’t have products – we custom-build what the client needs to solve his problem”, explains Rongley, adding “we are a pure service company and an ideal partner for companies that innovate in technology”. Today’s most successful companies use IT to gain competitive advantage. Focussing on their core business, they “outsource” their software development to specialist companies like Bleum. Bleum does not retain any intellectual property rights for the work they produce – this always remains with the client.

But this is not some unimportant activity at the margins – “these systems are the difference between profit and loss” in highly competitive sectors like banking and telecoms. And the systems themselves are almost always handling highly sensitive processes and information, so security is critical. “Bleum guarantees to protect the confidentiality of our clients data and software throughout the execution of projects”, says Eric. Relationship building for the long-term is thus a key part of how Bleum operates.

A good example of this is the company’s association with Shanghai Pudong Development Bank (SPDB). Last November, Bleum was asked participate in the testing on the bank’s new core banking system – SPDB was the first domestic bank to enter this type of relationship with a foreign owned and managed software company. With full banking liberalization looming in 2006, the bank has, Eric notes, “recognized that they need to get their house in order now”. He is very pleased with Bleum’s association with a progressive institution like SPDB, which gives it credibility in the local banking system.

Data warehousing is one area where the company is developing software applications. Typical users might be credit card companies, a booming sector locally (see, for example, the ‘Cover Story’ in this issue). Another example is “e-learning”. In December last year Bleum signed a contract to develop this type of software for Standard Chartered Bank China offices, providing a tutorial for their employees in the use of desktop applications and company IT support policies. And the company offers consulting services in areas like configuration management – “tidying up a multiplicity of software versions across a multi-site company”, for example – and project management. Eric is even “helping the police with their enquiries” – the People’s Security Bureau has signed up for a teleconferencing system developed for China Mobile.

But of course the entrepreneurial life in China is not a simple one. The company’s first bid for a business licence was thrown out because no-one had told them its Chinese name had to specify its software business. Rongley knocked on the doors of several Shanghai districts before finding one that was prepared to license him for $100,000 with a year’s grace for payment.

And then there is copyright, the bane of any software developer’s life in China. “China is the pirating capital of the world”, Eric laments, but acknowledges that things are “getting slightly better”. Enforcement is the key, of course – there are perfectly good laws on the Chinese statute book, but they need to be applied robustly and consistently.

But despite these difficulties Rongley has ambitious plans for the Shanghai operation. He is aiming for a staff of 100 by the end of 2003 and 1,000 two years after that. He’s also set a company goal of achieving the Software Engineering Institute’s CMM5 (Capability Maturity Model level 5) assessment, the industry’s most prestigious recognition of software development skills, by 2005.

Eric is in fact the second generation of Rongleys to work in the city. His father worked for power giant ABB, and Eric’s first view of the city was from their Bund office in 1995 – the new Pudong did not exist. He admits that “when I came back in 2001, I did not expect it to be there!” This dramatic example of what can be achieved in Shanghai reinforced his instinct to set up here rather than Beijing or India, and he intends that his company’s brand of dependable software outsourcing will be around for the long-term. He has no plans to hang up the running shoes, either.

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