BPO Boom

The BPO boom has shaken this sleepy pensioners’ paradise out of its
slumber. Pune may have missed the bus earlier when the IT majors made a beeline
for bigger cities such as Bangalore and Hyderabad, but the marked preference top
BPO players have shown for setting up their second and third centers here has
changed all that.

The city has transformed into itself into a throbbing IT hub thriving on the
buzz of the call center and the IT industry. White Indica cars with bright
yellow numbers dotting every traffic signal herald the arrival of the Business
Process Outsourcing (BPO) industry in the city in a major way.

All the big boys in the BPO industry — EXL, Convergys, MsourcE, Progeon,
HSBC, Wipro Spectramind, Aviva — have set up base here. After Mumbai, Gurgaon
and Bangalore, Pune has emerged as a top BPO hub in the country. Interestingly,
a Jones Lang LaSalle report estimates that Pune attracted around 7% of the total
BPO businesses coming to India as of June 2003.

Mphasis’ BPO business, completed five years of operations in Pune this August
and COO Sandeep Dhar has been pretty happy with the city at large. "We came
here at a time when the term BPO hadn’t yet been coined. Since this is a
people-intensive industry, it becomes easier to manage logistics in a smaller
city like Pune. Moreover the educational levels and well-established culture in
Pune make it a natural choice for a BPO," explains Dhar.

Zensar Technologies is running a 75-seat center for an Irish company at its
Kharadi facility. The plan is to reach the 1,000 BPO seat mark in the next 18 to
24 months, says Ganesh Natarajan, deputy chairman and managing director, Zensar.

Oceans Connect India, UK-based contact services provider, has set up a team
that includes physically challenged people from the paraplegic center nearby.
"We have been expanding our call center since March 2004, and expect to
touch the 600-seat mark shortly," says marketing director Caroline Graham,
Oceans Connect (UK).

The P&O Nedlloyd Business Support Division (BSD), which offers software
support to P&O’s front offices across the globe, is expanding the scope
and volume of work sourced from its Pune operations, with plans to take
headcount from 300 employees to 500 by 2004. The BSD started the global
application support center in 1999 to consolidate the IT division’s
application support activities. The BSD has just set up a "business testing
and support center" to test software in a live environment.

Convergys has plans for a 1,000-seater BPO, while IT consultancy and
solutions provider Patni Computer Systems has said it is expanding its business
process outsourcing (BPO) operations by adding two facilities at Pune and
Woburn, US, at an investment of $8.5 million. The centers in Pune and Woburn
will have an overall capacity of 450 and 100 seats.

What gives Pune this edge over bigger cities? When Sunil Munjal, managing
director and CEO, Hero Mindmine, came to Pune to establish his company’s 15th
learning center here, he said that Pune had emerged as a hub second only to
Mumbai in the western region for the BPO sector. The decision to open a learning
facility was necessitated by the fact that five of their clients were planning
to open centers here.

Dr. Vijay Bhatkar, the Indian supercomputer wizard, believes that BPO boom is
not a bubble like the dotcom one. "If the US does not outsource it will not
remain competitive and India is poised to become the back office of the world
and Pune with its skilled talent of manpower offers a wonderful option to the
players," he asserts.

Pune is also aided by the fact that Bangalore has reached saturation point
while Hyderabad suffers from the accent factor. Banerji says that Pune combines
the advantages of a big city and a small city. Distances are smaller, logistics
can be managed more easily. A pleasant climate, high standard of living and
proximity to Mumbai are some of the other factors that have contributed to Pune’s
growth as a BPO hub.

The next three years should see the creation of around 30,000 jobs in the BPO
sector in Pune, with more than 10 major BPOs due to set up shop here, and
another 15 smaller ones also seeing the city as an attractive option. Local
builders are gearing up to cater to the demand for space.

Even as bigger cities attain saturation limits, Pune is riding the crest of
the BPO wave, with things only promising to get better as the tides of newer
opportunity come in.

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