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Saturday, April 01, 2006

Chennai Tops The Indian City Attractiveness Index For Offshoring

A.T.Kearney’s Indian city services attractiveness index for 2005 finds Chennai as the most attractive destination for offshoring services, followed by Hyderabad. The cities had been benchmarked as attractive, based on three major categories - financial costs, people's skills and business environment. The city’s cost of living is seen to be low and the city has abundant supply of skilled labour. The study finds that Chennai's cost of living was very close to Tier II cities of India and the lowest among metropolitan cities. I had been repeatedly writing that indian offshoring isnot just bangalore alone. Another recent study found TamilNadu, the province for which chennai stands as the capital city top on economic freedom. No wonder that India’s largest IT facility is coming up in Chennai.

Too often statements like this are made about India getting expensive for offshoring. Many global software majors are miserably missing out in notlooking beyond Bangalore. A recent sandhill study on offshore outsourcing for product development found that more than 80% of offshore efforts were centered on India and just 5% went to china – which as I wrote earlier is no big forcein IT product engineering or services. It is time that investors in software companies impress upon their managementto look to other cities like Chennai & Hyderabad for offshoring before making radical statements. It is high time that global software majors begin to talk about their beyond bangalore plans and more importantly walk their talk. New venture capital backed investments should make this a non negotiable offshore strategy..

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
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