Bangalore Crumbling now Bangalore Tumbling?

Bangalore Crumbling now Bangalore Tumbling?
Global I-T firm Gartner says Hyderabad, Chennai next BPO hotspots
The Indian Express

MUMBAI, DECEMBER 13: Karnataka Chief Minister Dharam Singh may say all’s well and his sceptical alliance partner H D Deve Gowda may ridicule India Inc’s complaints of crumbling infrastructure but Bangalore just got another downgrade.

This warning comes from global information technology research firm Gartner, which says Chennai and Hyderabad are expected to outdo Mumbai and Bangalore to be the next hot favourite IT outsourcing destinations by 2010.

The study, released today, has categorised and evaluated the cities into four tiers based on various factors including infrastructure, skills availability, skills retention, access, cost of living, political support and quality of life.

In all these categories, Mumbai and Bangalore have been rated as ‘‘good’’, but their status is worsening. So, while infrastructure in Bangalore is rated ‘‘good’’, it is steadily deteriorating. Ditto is the case in skill retention, cost of living, political support system and quality of life in India’s Silicon Valley and Mumbai.

The Indian Express ran a series of articles last week detailing how the infrastructure has crumbled in Bangalore since a new Congress-led coalition government led by Dharam Singh has come to power.

‘‘Bangalore and Mumbai will soon cease to be the default centers for offshoring,’’ says Partha Iyengar, vice president, Gartner. ‘‘Ready availability of skilled labour force with lower attrition rates in cities like Chennai, Hyderabad & Pune will lead to companies setting up centers there instead,’’ he said.

Mumbai’s cost of living and quality of life has earned it a ‘‘Poor’’ and ‘‘Fair’’ status. On the other hand, Pune, Chennai, Hyderabad and Navi Mumbai have shown a steady improvement in infrastructure, skill availability, skill retention, cost of living and quality of life.

Improving infrastructure in Hyderabad has enabled the city to top the ratings in the infrastructure category. However other factors like increase in attrition rate, inadequate infrastructure, escalating costs and lack of good quality real estate, may prove to be a drag for Hyderabad.

Tier 1 cities like Bangalore, Mumbai and New Delhi will be facing increasing competition from cities like Hyderabad, Chennai and Pune because these cities have most of the capabilities of the Tier 1s, but, for various reasons, have not achieved the same level of visibility.

Hyderabad rates almost at par with Mumbai in all factors evaluated but has scored much higher on the cost of living and quality of life where Mumbai has received the lowest ratings.

The report also points out that when choosing the destination for offshoring, companies should look beyond Mumbai and Bangalore. ‘‘They will need to assess the strengths and weaknesses of various cities, as what they plan to outsource or in-source could very well determine the location. They should also factor the Expatriate attractiveness of the location which could be an emerging ‘swing’ factor.’’