Chennai, Hyderabad most favoured IT cities by 2010

Tuesday, 14 December 2004, 20:30 IST
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MUMBAI: Chennai and Hyderabad will emerge as the most preferred IT outsourcing destinations in India by 2010 based on parameters like infrastructure, skills availability and cost of living. In its report 'IT Outsourcing to India - Analysis of Cities', tech industry research firm Gartner said Hyderabad and Chennai would replace Bangalore and Mumbai as favoured locations for IT outsourcing. The study has categorised and evaluated the cities into four tiers based on various factors including infrastructure, skills availability, skill retention, access, cost of living, political support and quality of life. "Bangalore and Mumbai will soon cease to be the default centres for off-shoring," said Partha Iyengar, vice president of Gartner India. "Ready availability of skilled labour force with lower attrition rates in cities like Chennai, Hyderabad and Pune will lead to companies setting up centres there instead," he added. "In the long run, other factors including global footprint of service provider, service line capabilities and expatriate Index will also play a greater role for global IT service providers setting up or expanding in these cities." According to Gartner, the improving infrastructure in Hyderabad has enabled the city to top the ratings in the infrastructure category. "However, other factors that are inhibiting growth and need to be addressed are increased attrition, inadequate infrastructure, escalating costs and lack of good quality real estate," it said. Pune, which ranked lowest in infrastructure support, will need significant investment to be at par with cities like Mumbai and Bangalore or even cities like Chennai and Hyderabad in the future, the report added. Cities like Chennai, Hyderabad, and Pune are the most likely to take on the mantle of Tier 1 destinations in the near future, either in addition to or replacement of the current Tier 1s. Hyderabad has been rated almost at par with Mumbai in all factors evaluated but has scored much higher on the cost of life and quality of living fronts, where Mumbai has received the lowest ratings. ""When choosing the destination for off-shoring, companies should look beyond Mumbai and Bangalore," said Iyengar. "They will need to assess the strengths and weaknesses of various cities, as what they plan to outsource or in-source could very well determine the location," he said. "They should also factor the expatriate attractiveness of the location that could be an emerging swing factor. "Further, if an Indian is involved in the selection, care should be taken to overcome the parochial biases and preferences of the individual in making the selection."
Source: IANS