Propelling Growth in Tier-2 Cities

The IT-BPO industry truly has a cause for concern, as it is faced with grave
challenges while operating out of the current seven leading Indian cities. These
challenges include the urban chaos, traffic nightmare, high attrition,
exorbitant rentals, sky-rocketing land prices, higher overheads and
ever-increasing cost of living. With India continuing to remain a preferred
global hub of outsourcing business and saturation in several of Indian IT
hotspots, it is time that the industry proactively promotes tier-2 cities and
goes from rhetoric to action. The process of making IT and BPO business thrive
in such cities would also transform these entities to vibrant and world-class
cities.

Nasscom and AT Kearney recently studied the attractiveness and potential of
fifty cities across India for setting up of IT-BPO operations. In their report,
they have put Lucknow as a challenger which is the best category after the top
seven existing IT destinations. As a matter of fact, among challenger cities,
Lucknow ranks quite high by way of its intrinsic appeal as an IT-BPO
destination. Little wonder, IT professionals from this part of the country have
been quite upbeat to propel Lucknow as a world-class IT-BPO destination. They
just kicked off a Nasscom-supported initiative IT-BPO Destination Lucknow with
active participation from the industry, Nasscom and the government.

Today, Lucknow is already one of the important knowledge hubs in India. Some
of the countrys best engineering colleges and business schools are located in
and around the city. Over 75,000 engineering, computer science and MCA already
students pass out from UP based colleges annually (figure to reach 1,00,000 in
2009). According to an estimate, 12% of the countrys IT professionals come from
UP with Lucknow, Kanpur, Allahabad and Varanasi being significant contributors.
Presence of around seventy-five engineering colleges in the Lucknow-belt
provides a sizeable volume of technically qualified talent pool. Recently, the
Government of UP has also made some efforts to project Lucknow as a knowledge
hub. Such a promising academic backdrop and the presence of IIT-Kanpur and
IIM-Lucknow indeed augur well for the city to emerge as an excellent IT-BPO hub.

According to a recent survey, Lucknow is among the best cities nationwide in
terms of a natural and accent-neutral English diction, free from regional
pronunciation biases. The city offers excellent schooling with some of the most
celebrated public schools and convents in north India being located here.

Lucknow Development Authority (LDA) has embarked upon several ambitious
projects on Public Private Partnership (PPP) mode which would further accelerate
the citys fast track development. UP Governments developing Lucknow Industrial
Development Authority (LIDA) would indeed give a boost to the much needed IT-BPO
industrial activity in the city along the Lucknow-Kanpur corridor with a
world-class urban development framework.

Jayant Krishna The author is principal consultant, TCS maildqindia@cybermedia.co.in

Lucknow today offers a robust telecom backbone with multiple players and a
unit of Software Technology Park of India (STPI). In addition, an IT SEZ is also
coming up in Lucknow which would surely encourage more IT/ITeS companies to come
here. The city already has delivery centers of TCS, CMC, Tata Technologies and
Aegis BPO besides a handful of smaller players in the IT-BPO space. Some other
IT and BPO majors are also reported to be actively considering Lucknow for their
operations. TCS experience with its global delivery operations based in Lucknow
has been extremely good and it is expanding its footprint here with the
commissioning of a state-of-the-art facility. TCS has had a long association
with the city and has found the going to be quite encouraging with a low
attrition, high employee satisfaction, excellent customer satisfaction and a
strong quality process rigour.

Let us compare Lucknow with the NCR. Commercial rentals are half, attrition
is less than half, salaries are at least 25% lower and several overheads are 30%
lower than the NCR. If these data-points are any indication, there is a strong
likelihood of Lucknows emergence as a happening IT-BPO city of the future. This
trend would surely skyrocket Lucknows brand equity as a many splendoured
knowledge city on the move! Now, the UP Government, industry and NASSCOM need to
work hand-in-hand as partners in progress to turn this vision into a reality in
a fast-paced manner.