India has undergone tremendous change brought on by the outsourcing phenomenon and, as a result, companies are faced with numerous decision criteria in evaluating and selecting the right location for services globalization.
“As the offshoring industry matures, location selection takes precedence over supplier selection,” said Atul Vashistha, CEO of neoIT, an offshore outsourcing consultancy. “In the early days, the competition was between countries. Today, a more likely scenario is to see Bangalore competing with Manila, instead of India competing with the Philippines.”
In its latest white paper, India: City Competitiveness, neoIT evaluated 27 cities based on four primary criteria:
-People (including population numbers, quality and education system);
– Infrastructure (electrical power, telecommunications, roads, airports);
– Financial (cost of living, real estate prices); and
-Catalysts (government support, supporting industries, social and political stability, competing companies and weather).
From this data, neoIT developed the offshore competitiveness index in order to rank the relative competitiveness of each city as a destination for BPO or ITO.
As the competition between Indian cities heats up, a few strong contenders have emerged as the best destinations for outsourcing. Of the 27 cities evaluated by neoIT throughout 2004, Gurgaon topped the rankings with Bangalore, Pune, Hyderabad and Chennai following closely behind.
Delhi, a top IT destination in the early 1990’s, fared poorly in the study, coming in at number 20. Other cities that received high rankings include Mumbai and Noida. Challenger cities that are rapidly emerging as viable BPO and ITO offshore destinations include Kolkata, Thiruvananthapuram, Chandigarh and Indore.
“Competition among cities, as well as between countries, is good for the industry as it raises the bar on standards for services globalization,” said Vashistha. “The emergence of centers-of-excellence across India creates a benchmark for other cities across the globe to aim for in order to become leading BPO or ITO destinations.”