Neusoft CEO Liu Jiren: The software outsourcing model will enter a dead end

Not long ago, Neusoft, China’s largest software company, just celebrated its 20th anniversary. In an interview with this newspaper, Neusoft Group's chairman and CEO Liu Jiren positioned Neusoft as a child, who has just walked through the stage of self-understanding. And remarks, the next ten years, Neusoft's annual revenue from the current 5 billion yuan to 25 billion yuan, of which 60% of international business.

All along, Neusoft, who was born as a "bitter boy," survived in the cracks and often moved against the mainstream. In 2011, the topical words of Liu Jiren, who had never followed the trend, became popular vocabulary such as cloud computing, mobile internet, and even the word “APP economy”, and proposed the transformation strategy of B2B2C.

From the contractor-head model that takes advantage of China’s demographic dividends to the transformation of the Internet service model, business model transformation has led to changes in business models. In the past 20 years, Liu Jiren, who has never been involved in the B2C market, has begun to enter the personal consumer market through medical treatment, and is the largest software company in China. Quietly involved in the hardware market. “The era of software low-cost labor has passed.” Liu Jiren proposed internally for the software outsourcing business that is only familiar with the outside world. If there is no major change in China’s software industry outsourcing model, this path is a dead end.

Transforming platform operators into the APP era On December 20, Neusoft released the "Healthy Cloud" strategy and the "Xi Kang" branded products, namely the Xikang line watch box and the Xikang profitable machine, and announced its entry into the health management and service sector. This is the first time that Neusoft Group has launched its products since the “Xi Kang” model was proposed last year. Neusoft Group CEO Liu Jiren pointed out that Xikang’s products and services integrate professional resources in the Internet of Things, Internet and cloud computing technologies and medical fields. Through the creation of an open health management and service platform to formulate healthy living advice, personal health is enhanced. Level.

"The mobile Internet has brought great opportunities to the software industry. Through the health industry, Neusoft has seen new directions and transformed B2C fields from past B2B service models." In an exclusive interview with this reporter, Liu Jiren said that mobile terminals and bandwidth and other infrastructure The maturity of Neusoft, which has only focused on the B2B market in the past, is an opportunity to enter the B2C market. The Xikang business has become the first shot of Neusoft's transformation from the B2B model to the B2C model.

Liu Jiren told reporters that Neusoft's "healthy cloud" strategy is mainly implemented through the Xikang model. "'Xi Kang' is not a traditional IT, not a medical treatment, but an open 'healthy cloud' platform to build an ecosystem for health management and service areas. This ecosystem helps individuals to achieve the goal by integrating various aspects of medical and health resources. Health information detection, intervention and management. According to reports, Xikang health cloud management platform is fully open to third-party developers, there are applications such as sensor manufacturers access, but every health application must be confirmed through authoritative testing. Can be placed on the platform.

Liu Jiren disclosed that Neusoft will launch various internet applications and services based on mobile phones and automotive electronic systems. "First we need to do B2C, we must go to C, that is, end customers; secondly, we must not give up B--enterprise-level customers in the original B2B, but we must shift our focus to C. In all business areas that Neusoft involves, we The best choice for analysis is to start with health and medical care at the C-term, so after more than two years of preparation, Xikang Health Cloud was launched."

In the concept of Liu Jiren, through the “Xi Kang Model”, Neusoft intends to play the role of a platform operator. In the future, it will earn profits through the corresponding operating expenses. This operating platform is Neusoft’s “App Store”. Liu Jiren clearly stated: "In three years, the medical IT industry market will be determined. Like the telecommunications, government, taxation and other industries, foreign companies do not have much opportunity."

In Liu Jiren's view, from the digital economy to the internet economy, to the era of mobile internet and cloud computing, the software industry will also enter an “app” era. Developers, application providers, service providers and consumers through Google, Amazon, Baidu, zero distance, and consumers through a variety of terminals, anytime, anywhere to enjoy a variety of Internet applications and services. “The previous business model was to sell hours, sell many individuals, and now sell IP licenses. The characteristics of this era are that various platforms have huge numbers of users, and Neusoft as a software product provider can share their users.”

Ten years later, international business revenue accounted for over 60%

Liu Jiren’s transformation has both active and passive factors. Affected by factors such as international environmental outsourcing business and rising labor costs, the profit growth of Neusoft Group's revenue in the first three quarters of this year has declined. Despite the apparent increase in domestic business, it also affected investor confidence. In the interview, Liu Jiren admits that Neusoft is facing three major transformations, namely, the shift from manpower-based growth to knowledge-capital-driven growth, the transition from a technology-centric business model to a customer value-centric business model, and a shift from centering on China. Focus on the global market. In Liu Jiren’s plan, ten years later, Neusoft's international business income accounted for more than 60% of Neusoft's total business. Neusoft's revenue from products and continuous services accounted for more than 50% of the total revenue of Neusoft. This kind of income structure adjustment has Help Neusoft increase profit margins.

Liu Jiren believes that software outsourcing is based on human resources to gain access to the international market. In the past ten years, this model has developed rapidly in China's software industry for two reasons: one is the strong local demand; the other is the cheaper engineer resources in China. However, as the price of human resources in China rises, this model will “enter a dead-end alley” in China.

From B2B to B2C Opportunity and Risk Coexistence Although Neusoft has formulated a clear transformation strategy, it has been deeply engaged in the Neusoft of the B2B market. To successfully transition into the B2C market, it can be said that opportunities and risks coexist.

"We will not call B2C directly, but will call it B2B2C." Liu Jiren explained that Neusoft should cooperate with customers who are doing B now and go to C together. "Because B has always been our customer, and their understanding of C on the terminal is much better than ours. For example, the car company understands the owner better than we do. For example, the hospital understands patients much better than we do. We do The image of the event is like using the pier that we originally built. Using this pier to set up a bridge that connects to C is B2B2C."

In Liu Jiren's view, Neusoft switched from B2B to B2C market. There are three main risks: First, if Neusoft doesn't really meet the detailed needs of customers, the products and applications made will not make customers feel convenient and valuable, and there will be market risks. The second is to maintain a good rhythm of the time and speed of market demand explosion, if time is not accurate, too early, too late to enter, the future can not be a market leader; the third risk from the management team doing B Leadership experience and creativity in the 2C model.

Entering new areas, the transformation of thinking also faces enormous challenges. "For example, I discovered that writing a manual is so simple. The things that a very professional person writes are not understandable to ordinary people. But if you let an ordinary person write, it can be understood by people who do not have professional knowledge. This logic tells us that we need to think differently when we enter new fields.In the business of Neusoft Health Cloud, except for the chairman of the company is Neusoft senior, other executives are almost all airborne to introduce. This is to make our thinking There is a change."