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Poor infrastructure harming Indian IT-BPO sector: Study
By agencies
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Monday, 04 April 2005, 19:30 IST
NEW DELHI: India may not be able to continue its meteoric rise in IT and business process outsourcing (BPO) services unless its infrastructure, including roads and power, is improved, international research firm Forrester said in its latest India report.
"India's IT and BPO services industries continue to grow dramatically. Not only North American and Western European, but also Asia-Pacific companies are increasing their dependence on Indian services. However, this growth faces a significant challenge. Today, India's infrastructure, including roads, airports, and power generation, can barely support the current market," a report by Forrester titled `India's infrastructure can't keep up with the IT industry's rapid growth' has warned.
It said India would be unable to continue its high growth, without significant infrastructure investment from the Government or IT and BPO industries. The report comes on the heels of a public debate initiated last year by the Wipro Chief, Azim Premji, on the inadequate infrastructure in Bangalore.
The Forrester report states that the success in IT and BPO and the demand for Indian services came at a price, and added that India's roads, rails, power generation capability, mass transportation systems and hotels struggle to support the growing sector.
"During peak traffic times, traveling from one end to the other end of a city, such as Mumbai, takes over two hours. This is not only inconvenient for citizens and visitors, but also hinders the IT vendors' ability to get their employees to work'.
"Many of the vendors provide employees with private bus service; with no reliable public bus service, the vendors have to pay to transport workers. With the traffic as it is now, the cost in employee productivity, as well as fuel and wages for the bus drivers, is growing," the report said.
"As companies embark on Indian outsourcing projects or increase their dependence on India-based IT service providers, they need to evaluate the effect that the infrastructure inadequacies may have on their projects or vendors.
It is essential to ensure that their vendors can insulate them, at least in the short term, from country-related infrastructure issues. However, they also need to take into account the fact that the insulation costs money, and the vendors' outlay for infrastructure is only going to increase with increased business volume," it added.