Chennai tops the list as the most attractive city for offshoring services in A T Kearney's Indian City Services Attractiveness Index 2005.
While the National Capital Region (Gurgaon, Faridabad, Noida), Bangalore and Mumbai remain attractive destinations for offshoring services, Chennai has emerged as the most attractive city for offshoring beating traditional top cities.
The cities have been benchmarked as attractive based on three major categories of Financial Costs (compensation costs, infrastructure costs, cost of living); People Skills and Availability (availability, educational skills & attrition rates); and the Business Environment (city infrastructure, quality of life and government support).
Chennai emerged as a clear leader across all categories followed by Hyderabad, the NCR and Bangalore.
Announcing the A T Kearney's Indian City Services Attractiveness Index 2005, Marcy Beitle, Partner and Vice President, Organisation and Transformation Practice, A T Kearney, New York, said, "India has rightly focused on the development of IT and IT infrastructure during the past decade.
Today, India offers the most mature supply base for offshore work across services and verticals. This growth has been facilitated by the pro-IT government policies, stable political status, availability of abundant qualified and skilled labour, and the low input costs.
A T Kearney's Global Offshore Location Attractiveness Index has been a powerful tool over the last few years to help companies decide on the appropriate countries for offshoring. However, with the maturity of supply markets, clients increasingly need to make difficult choices between cities in each country. A T Kearney's study on Indian city attractiveness aims to bridge that gap for the Indian market."
Nine Indian cities of Chennai, Hyderabad, the NCR, Bangalore, Mumbai, Kolkata, Pune, Kochi and Jaipur were assessed for their attractiveness for placing offshoring services.
Mohit Rana, Principal, Communication and Technology Practice, A T Kearney, Gurgaon said, "Our analysis indicates that India will continue to be the most attractive destination for BPO services with a potential to achieve over US$ 18 billion in ITES exports by 2008, accounting for 65 per cent of the total offshore market.
Chennai is a leader based on available labour and low attrition whereas Bangalore suffers due to high attrition rate.
