I recently explored a few emerging destinations across the country, and realized that there are some common characteristics across these cities. Ideal demographics, rapidly improving physical, social and real estate infrastructure, and enhanced scope of economic activities along with government support and initiatives are aspects which have been critical in determining the growth potential of these emerging delivery locations.
Each city though has a unique profile and inherent advantages that could cater to specific needs of the industry and, has thereby, shown great potential as perfect investment destinations for IT. Last year, NASSCOM and Cushman & Wakefield partnered together for a research study to evaluate the journey of 10 promising and desirable emerging business locations for the IT-BPM industry in India.
While we kicked off this important initiative, we were hopeful of the immense potential in select emerging cities. It was our endeavour to retrace their journey, understand their movement and growth in IT-BPM service delivery till date and build out a future roadmap for them. One of the stars that emerged in our location analysis was Indore. Although the city figured as a challenger six years ago when we did the AT Kearney locations analysis, it has, over time, significantly improved its position and has built upon its existing strengths, and added new competencies. High literacy rates, qualified entry level talent, growth in office infrastructure, excellent connectivity has ensured the doubling of IT-BPM headcount in the city in the last six years.
Indore, the commercial capital of the state of Madhya Pradesh, is rapidly growing and evolving as a modern city. With two national highways (NH3 and NH 59), an upgraded domestic airport and connectivity through railway and road transport, the city of Indore is well connected to the rest of the country.
In my discussions with different stakeholders, one thing which came out strongly in favour of Indore was the massive state government support. The MP government is very supportive and has been actively involved in providing necessary infrastructure as well as disseminating details on various schemes/incentives to the operating companies, incentivizing their business. Some of the government initiatives on various fronts as enumerated below:
- A well laid out IT Policy that incentivizes IT companies to setup operations in Indore
- Formulation of a BPM policy has been initiated this year with an aim to facilitate smooth operations of existing BPM companies as well as attracting new ones
- Incentives for skill-gap training in terms of monetary reimbursements for every employee trained by the company are offered by the government
- Nearly all IT parks in the state are government-owned. However, the MP government is open to offers from private players for setting up IT parks/SEZs in the city
- The city scores high on safety and hence, IT-BPM employees who work in different shift timings and need to travel during the night do not face any issues
- Relaxed employment generation norms for companies – at least 100 people to be employed for 1 acre of occupied space.
Indore remains one of the most cost effective locations relative to many other Tier II locations. With a cost differential of approx. 15-20% as compared to other cities, Indore provides a conducive business environment to IT-BPM companies. Many leading firms like Teleperformance, CSC, Impetus, Firstsource, etc have set up their operations in Indore as well as seen to expand their existing business in the last couple of years.
According to InfoBeans, a software services company, “Being the home town of the co-founders, Indore was picked up for convenience to start InfoBeans operations in 2000. However, even after 14 years in this business and operations in California (US), Pune & Indore, Indore still remains the Head Office by choice. The ecosystem in the city assist us to have high retention rate, attract new talent and sustain a culture, which creates WOW and deliver happiness for all stakeholders”.
Significant presence of academic and technical education institutes provide skilled and educated talent pool for white collared jobs. While mid and senior level talent is a challenge like in most tier II locations, the companies based out of Indore strongly believe that entry-level talent for technical as well as non-technical positions is easily available in the city. However, Indore has proved to be an attractive relocation city for people across India. Good work-life balance and ease of travel within the city attracts outstation candidates to the city.
There is a better than average employee retention rate in the city, due to local manpower and strong commitment of people to their own city. As a result, employee attrition rate continues to be considerably lower than Tier I cities and has remained in single digits.
While the State Government’s support has been instrumental and acted as an important pillar behind the success story of the city so far, it’s high time that the MP Government should aggressively promote the city as a preferred destination for IT-BPM Industry. The industry feels the need for proposed set-up from large integrated IT companies, to materialize at the earliest in order to expand overall IT ecosystem in the city and grow the base further.
I believe that Indore has a lot of potential and can emerge as a key destination for legal KPOs, medical transcription/KPO opportunities and animation industry, provided the government continues to support and attract companies to the city.