14 November 2004

Pune New Hotspot on BPO Map
Source: The Economic Times

Once considered Mumbai's poor cousin, Pune has seen a sea change and has emerged as a hot-spot for investors and companies alike. At the moment, the Maharashtrian city is trying to be the gracious host to a whole range of visitors from the BPO sector . LG, HSBC, Aviva, vCustomer - Pune has it all. And global biggies are all out vying for attention as the city is now emerging as one of the most favourite BPO hubs of the country after Mumbai, Gurgaon and Bangalore.

Close on the heels of New Delhi-based BPO major vCustomer , setting up shop in Pune with a 1,000-seat strong and 60,000 square feet centre, WNS Global Services went announced an addition of 1,000 new seats and an additional investment of $5 million to its existing Pune operations. The BPO major also aims to hire 3,000 by the end of this year, to help service the 20 new clients it has signed on in the last one-year. Once this is done, WNS' strength in Pune will hit the 5,000 mark.

And WNS is not the only one. Thrice lucky, IT player Zensar Technologies now has ambitious plans of recruiting around 3,000 employees for its new campus in the city. Incidentally, this would be Zensar's fourth venture in the city itself. While global banking giant HSBC is on its way to double headcount at the Pune centre from the existing 500, EXL Service, a third-party BPO company has announced that it aims to recruit around 1,100 people at its upcoming facility in Pune by August 2004. EXL's Pune centre will concentrate on existing client relationships and new business, which are mostly banking and insurance-related.

Not to be left behind, UK’s largest insurer Aviva, has also made a beeline for Pune as it announced 1,700 openings for its new backoffice centre. Convergys has also been planning a 1,000-seat BPO next year. While Convergys has announced adding 1,000 folks to its BPO organ, mSourcE, a subsidiary of mPhasis which has been in the city since 1999, is now planning to revamp operations in a big way and add around 5,000 seats in the next three years.

Other big players keen to expand base include Wipro-Spectramind, Progeon of Infosys and Tēla (Adaptis), which are planning to add around 1,000 seats each by the year end. UK-based Barclays Bank is also keen on expanding a base in Pune. Overall, the city is expected to generate around 15,000 jobs in the BPO segment by the year end, according to market estimates. Practically, every BPO outfit in the city is keen on doubling operations in the coming year. "Currently, there are around 20 large and small BPOs in Pune and at least another 10 are expected to set shop in the city soon,” Sushil Gupta, head of the Software Technology Parks of India (STPI) in Pune, said, in a recent interview to a daily.

According to another expert, most BPOs in Pune use horizontal skills set, which leaves no scope for specialisation. Although any other city can offer the same manpower, the fact that Pune is rich in human resources, helps MNCs establish a vertical skills set-up. The vertical skills include proficiency in programme development, designing, engineering, retailing and management, implying the need for a qualitatively better workforce, found in abundance in Pune.

So, what exactly makes Pune a hot proposition for MNCs, who are flocking to this satellite town to spread their wings? As more and more companies transfer their offshore operations to Pune, it is time for Mumbai, Noida and Bangalore to take a backseat. A Jones Lang LaSalle study has estimated that Pune attracted around seven per cent of the total BPO businesses coming to India as of June 2003.

A pleasant climate, along with short distances, a high standard of living, educational infrastructure, air connectivity, proximity to commercial hub Mumbai and strong local and state government support are factors that have contributed significantly to the growth of Pune as a BPO hub. Also, social scientists believe that ‘Puneites’ have a ‘stable’ mindset and are, thus reluctant to move out of the city. Consequently, most are unlikely to switch jobs easily, which is a huge advantage for the sector, beset with a 42 per cent rate of attrition. And as bigger cities become saturated with each passing day, more and more companies are cool with the choice of Pune, replete with resources, skills and a huge accent-neutral English speaking talent pool.

Moreover, the city has around 37 engineering colleges and a large number of management institutes. This brings about one lakh graduates into the system every year and many are willing to work while they learn to earn extra pocket money. Finally, a pro-IT and ITES policy announced by the state of Maharashtra in 2003, gave a fillip to the entry of more BPO players. The city, which stood at ninth position in ITES-BPO penetration for the fiscal year 2003, according to a report published by Nasscom, is now catching-up with the metros.