Recession-hit Japan is finally looking at Indian providers of outsourcing services to cut cost. A case in point is Mumbai-based Patni Computer Systems [Get Quote], which has not only signed two $10 million deals in Japan in the recent past but has also witnessed increased traction in the region.

"Japan currently accounts for 5 per cent of our revenues but we see this touching 9 per cent in the next three years. Business from Japan grew almost 35 per cent last year and we expect healthy growth from this region," said Deepak Khosla, senior vice-president and head, Asia-Pacific.

The company has been in Japan for over 10 years but, in the past two years, the momentum of deals has increased considerably. "For the last two years, we have been very focused on this market in terms of the time we spend there, as well as in understanding the cultural aspects," added Khosla.

The other reason for the increase has been a gradual shift from the Chinese market. "Japanese firms preferred to work with China as it has been a manufacturing hub. But they are now realising that India is a better option for work related to embedded systems due to the skills available here and with regard to intellectual property," said Khosla.

Japan's IT services market is expected to be around $108 billion. Close to 76 per cent of the outsourcing work has been going to China, with the rest being divided among countries like India, Vietnam, Philippines, etc, say analysts.

Patni has close to 1,100 engineers. Over two years ago, the company created a Japan Business Cell within this group. The cell has over 300 engineers with bilingual capability. "We have around 320 engineers who speak Japanese. We felt these kind of skills are important, as unlike in other markets, in Japan, building a relationship is very important before you get any contract," adds Khosla.

To motivate engineers to complete certifications and to enhance their Japanese language skills, the company started a Japanese language incentive for bilingual engineers to motivate them further.

Such efforts are now showing results. The company recently signed an agreement with Hitachi for joint promotion of its product, JP1. Along with this, Patni will add new features, provide support services and work on new platforms. While Patni has been working with Hitachi for a long time, this is the first occasion when the Japanese firm has signed a global partnership deal where Patni will be an implementation partner. This new deal will add 100 more engineers to the 300 Patni engineers already working on the Hitachi account.