Smaller cities to emerge as BPO hubs

New Delhi: India has more outsourcing growth potential, not just in existing BPO hotspots like Bangalore, Delhi and Mumbai, but at lesser-known cities, such as Kochi and Visakhapatnam, according to a research finding.

Alsbridge, the outsourcing experts, announced on Thursday that its internal research shows India has more growth potential than just the usual top picks – Bangalore, Delhi and Mumbai.

Move over the existing hotspots, lesser-known Indian cities, such as Kochi and Visakhapatnam, have the most potential to be the next big outsourcing hotspots for major international corporations.

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, Alsbridge, 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," as quoted by PTI, Alsbridge CEO Ben Trowbridge 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 per cent over the last decade, whereas outsourcing providers in India are able to achieve operating margins up to 40 per cent.

Providers in India are also able to provide similar services as much as 25 per cent 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 and other legal issues.