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Chennai, Hyderabad favoured outsourcing centres — study

By Our Staff Correspondent

CHENNAI, DEC. 13. Chennai and Hyderabad will outdo Mumbai and Bangalore to be the most favourable Indian IT outsourcing destinations by 2010, according a report released on `IT outsourcing to India — Analysis of cities,' by Gartner Inc.

The study 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.

The report has also stated that certain drivers enable these cities as favourable destinations for outsourcing. These include improving infrastructure, overall skills availability, good quality educational institutions and active political support. The improving infrastructure in Hyderabad has enabled the city to top the ratings in the infrastructure category.

However other factors that are inhibiting this growing favourability and need to be addressed are increased attrition, inadequate infrastructure, escalating costs and lack of good quality real estate. Pune which ranked lowest in infrastructure support will need significant investment to be at par with cities like Mumbai and Bangalore or even cities like Chennai and Hyderabad in the future.

Partha Iyengar, Vice President, Gartner, has said that Bangalore and Mumbai will soon cease to be the default centres for offshoring. Ready availability of skilled labour force with lower attrition rates in cities like Chennai, Hyderabad and Pune will lead to companies setting up centres there instead. In the long run other factors including global footprint of service provider, service line capabilities and expatriate index will also play a greater role for global companies or IT service providers setting up or expanding in these cities.

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