Smaller Indian cities to emerge as the next outsourcing hubs

Smaller Indian cities to emerge as the next outsourcing hubs
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First Published: Thu, Mar 29 2007. 12 49 PM IST
Updated: Thu, Mar 29 2007. 12 49 PM IST
Meenakshi Ganjoo, PTI
Silicon Valley: Move over Bangalore, Delhi and Mumbai. Lesser-known Indian cities such as Kochi and Visakhapatnam have the most potential to be the next big outsourcing hotspots for major international corporations.
Alsbridge, the outsourcing experts, announced today that its internal research shows India has more growth potential than just the usual top picks — Bangalore, Delhi and Mumbai.
International companies can now start thinking beyond the three big cities and look at the top 10 up-and-coming cities of Ahmedabad, Chennai, Hyderabad, Kochi, Kolkata, Mangalore, Nagpur, Pune, Thiruvananthapuram and Visakhapatnam.
The Dallas-based firm ranks Ahmedabad as India’s most attractive upstart. It’s home to Gujarat University, and the local government is supporting widespread infrastructure improvements. Hewlett-Packard and Oracle are among the Western companies that have already discovered the place.
These cities were chosen based on several factors including population, accessibility, education of the workforce and existing companies who have businesses in these cities.
“When most people think of India, they think of just one or two big cities like Bangalore or Mumbai,” Ben Trowbridge, Alsbridge CEO, said.
However, the reality is that India is a very big and complex country with many cities that would be large enough to support an NFL franchise if they were in the US even beyond the next tiers that are commonly mentioned.
Alsbridge believes that in the next few years providers will consolidate and move even more of their labour to India.
A report released by the company last week says the operating margins of US providers have hovered around 6% over the last decade, whereas outsourcing providers in India are able to achieve operating margins up to 40%.
Providers in India are also able to provide similar services as much as 25% cheaper than in the US.
“Some people have speculated that the future of outsourcing lies in China, but there are many challenges to be faced with this,” Trowbridge said.
American corporations looking to outsource in China face many obstacles such as language barriers, intellectual property rights and other legal issues. India doesn’t share these concerns.
“We believe that many companies that want to stay competitive will be focusing their outsourcing operations in one of these top cities in India, and they’ll be very successful in doing so,” he added.
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First Published: Thu, Mar 29 2007. 12 49 PM IST
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