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ON

OPERATION AND LOCATION STRATEGIES OF BPO

Submitted To: Submitted By:

Ajay kumar

Mr. HARENDRA SINGH RS1902 B50

Reg.no.-10906664

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ACKNOWLEDGEMENT

The project is an illuminating journey to the world of OPERATION

MANAGEMENT. Co-operation and co-ordination of various people is

involved in the creation of a project. It is impossible to thank each of

them individually, but I am making a humble effort thank some of

them.

First of all I want to thank my lecturer Mr. HARENDRA SINGH for

assigning me such a great project. He not only assigned me a

responsible role in the project but also showed confidence in me

throughout the project.

AJAY KUMAR

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PREFACE

This project is undertaken to fulfil the project work component of the M.B.A

programme in 2st Semester. My project guide from L.P.U is Mr. HARENDRA

The term paper is based on-

OPERATION AND LOCATION STRATEGIES OF

BPO

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TABLE OF CONTENTS .

S.No. NAME OF THE TOPIC

1. Introduction

2. Operation strategy of BPO

3. Location strategy of BPO

4. References

5. Bibliography

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BPO

OPERATION AND LOCATION STRATEGIES

Introduction:-

BPO [Business Process Outsourcing] has been the latest mantra in India today. As the

current sources of revenue face slower growth, software companies are trying new ways to

increase their revenues. BPO is top on their list today. IT services companies are making a

quick entry into the BPO space on the strength of their existing set of clients. We hope to

address all issues related to BPO in India on this portal.

We will attempt to explain what it takes to setup a BPO facility in India. Actually, setting up

a call center is capital intensive. An ordinary BPO center that takes care of pure back office

operation [e.g. payroll, data entry] will not be as expensive as a call center.

The philosophy behind BPO is specific, do what you do best and leave everything else to

business process outsourcers. Companies are moving their non-core business processes to

outsource providers. BPO saves precious management time and resources and allows focus

while building upon core competencies. The list of functions being outsourced is getting

longer by the day. Call centers apart, functions outsourced span purchasing and disbursement,

order entry, billing and collection, human resources administration, cash and investment

management, tax compliance, internal audit, pay roll...the list gets longer every day. In view

of the accounting scandals in 2002 [Enron, WorldCom, Xerox etc], more and more

companies are keen on keeping their investors happy. Hence, it is important for them to

increase their profits. BPO is one way of increasing their profits. If done well, BPO results

in increasing shareholder value.

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Typically, a customer calls the call center [usually a toll-free number]. After pressing

numerous numbers [1 for English, 2 for Spanish, 3 for bank balance!] the operator will

answer your query by accessing the database. Call centers address sales support, airline/hotel

reservations, technical queries, bank accounts, client services, receivables, tele marketing,

market research.

If a bank shifts work of a 1000 people from US to India it can save about $18 million a year

due to lower costs in India. According to Mckinsey, giant US pharmacy firms can reduce the

cost of developing a new drug, currently estimated at between $600 million and $900 million

by as much as $200 million if development work is outsourced to India.

Benefits derived from BPO can be summarized as follows:

1. Productivity Improvements

2. Access to expertise

3. Operational cost control

4. Cost savings

5. Improved accountability

6. Improved HR

7. Opportunity to focus on core business

The advantages of implementing operations strategies to improve the efficiency and

effectiveness of the Nation’s highway system. Operations strategies include actions taken by

public agencies to maintain capacity and safety of highways by controlling traffic, responding

to incidents, clearing snow and other obstructions, and providing information to users on

highway conditions and alternatives.

The Need for Operations Strategies Historically, highway agencies have focused most of

their attention on building and maintaining road infrastructure. Much less attention has been

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paid to operating the road system to provide the highest level of service possible. Effective

and efficient operation of highways was largely left to motorists and carriers. With increasing

road congestion, the expense and difficulty of building new facilities, and the need for safe

and secure highways, this view has begun to change. Many highway officials now recognize

those operational strategies, including traffic control and enforcement, incident and

emergency management, ice and snow removal, and the deployment of Intelligent

Transportation Systems (ITS) technologies, can make a major difference in how the highway

system performs.

Operations strategies are needed to mitigate congestion in its many forms. Highway

congestion is not just a problem of recurring “rush hour” delay in the largest U.S. cities. Over

half of the 4.5 billion hours of vehicle delay every year, measured by the Texas

Transportation Institute in 68 cities, is due to incidents such as breakdowns and crashes. Oak

Ridge National Laboratory estimates that, throughout the Nation, delay caused by freeway

work zones, poorly timed traffic signals, and by snow, ice, and fog is greater than delay from

breakdowns and crashes. Several sources of non-recurring delay were not considered in these

estimates, including special events, rain, rail-highway grade crossings, toll booths, and work

zones on arterials other than freeways. The estimates also do not include recurring delay in

rural areas on local roads with concentrations of recreational travel and on heavily travelled

Intercity highways.

As summarized in Exhibit 21-1, operations strategies can influence the reliability, timeliness,

safety, and security of highway use while responding to recurring delay and temporary

capacity loss. The relationships of operations strategies to these conditions are described in

the following sections, as well as in Chapter 12 (national security) and Chapter 20 (safety).

Operations and Reliability

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As discussed reliable, predictable travel times are especially important in a society where

travellers put a high value on their own time and where many goods are relatively expensive

and are needed in tightly scheduled manufacturing and distribution systems. Late arrivals can

have significant economic costs for workers reporting at the beginning of their day or picking

up children from day care at the end of the day, for factories waiting for parts to assemble,

and for carriers who are missing guaranteed delivery times. Even when the transportation

system breaks down, travellers are less disturbed if they can predict with some certainty how

long they will be caught in traffic and adapt their plans Of the many factors that get in the

way of reliability, some can be anticipated well in advance, others have shorter times for

adapting, and some happen with little or no advanced warning.

For example,

Operations Strategies special events, from sporting contests to symphony concerts,

frequently concentrate large quantities of traffic on limited portions of highway and transit

systems. Other events such as parades and races close parts of the street network. There are

about 2,000 events each year requiring analysis by a traffic engineer just in the City of Los

Angeles. Special events are not limited to densely settle urban areas, as illustrated by the

Winter Olympics and the original Woodstock music festival. With adequate notice and

preparation, transportation managers can adapt traffic controls and transit schedules to handle

the crowds, participants can find the least congested routes or plan for the delays, and other

Travellers can avoid the traffic by rerouting or rescheduling their trips.

Special Topics

Major reconstruction projects or overnight patching of potholes can significantly reduce

highway capacity and cause congestion in urban and rural areas at all hours of the day and

night. Like special events, most work zones can be anticipated and effective adjustments

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made by managers and users if information on the location and timing of the work is

provided in advance.

Snow and ice close highways over thousands of square miles for days and block some

mountain passes for months. Fog and rain bring traffic to a crawl in both warm and cold

climates. Wind blocks trucks and campers from routes in deserts and mountains. Hurricanes

force thousands of residents to flee coastal areas as rain and wind make local roads difficult

to navigate. While bad weather is notoriously difficult to predict days in advance, technology

is providing much better warnings hours in advance and better understanding of how much

transportation facilities are likely to be affected (such as whether road surfaces are too cold

for de-icing methods to work). Effective weather information helps users make route and

schedule decisions, and helps traffic managers know when to reduce speed limits or close

facilities, dispatch snow and ice removal equipment, or redirect traffic.

Vehicle crashes and breakdowns are the least predictable events. The most severe crashes

often happen at night or on rural roads with little effect on traffic flow, but some crashes

(particularly involving large trucks) during rush hours in congested cities can affect the urban

area’s entire freeway network. More important than traffic disruption is the potential for loss

of life. When transportation managers become aware of a crash or breakdown, they can

advise emergency response units and attempt to divert traffic from the site until the disruption

has been cleared. When the geographic and temporal pattern of crashes is identified, crashes

become more predictable and countermeasures can be deployed more effectively.

Operations and Timeliness

A reliable transportation system is inadequate if it does not get travellers to their destinations

within a reasonable time. Travellers needs and economic efficiency are not served if

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highways slow consistently to a crawl. In addition to the temporary sources of capacity loss

and delay, recurring congestion and poor traffic control increase travel time, adding

significantly to the cost of travel and goods movement.

Streets in major cities are clogged by commuters during weekday rush hours and by shoppers

on weekends. Seasonal throngs of visitors clog routes to recreational areas in rural areas.

Intercity corridors and passenger terminals are strained around holidays, most notably on the

Sunday following:-

If the geographic and temporal patterns of traffic are adequately measured and understood,

traffic management strategies such as reversible lanes and ramp meters can be implemented

to increase capacity during the peak periods.

Even the most effective operations strategies cannot handle the continuing growth in vehicle

travel on a static facility. The size of the population, the number and lengths of trips being

taken by each person, and the quantity of goods being moved continue to increase.

Congestion is most acute at major interchanges and locations where expressways narrow or

transition into surface streets. Border crossings, highway-railroad grade crossings, and local

streets that connect terminals with intercity arterials cause additional bottlenecks. Bottlenecks

can be identified by their impact on traffic flow and by network analysis methods. Bottleneck

removal usually involves significant construction and has the potential to negatively effect

the local environment and community.

Operations Strategies

Motorists are often frustrated by idle time sitting at traffic signals, whether they are caught

behind a line of vehicles or stopped at a red light with no other vehicles are in sight. Traffic

signals can be set to move large volumes of traffic during rush hour or handle the occasional

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vehicle late at night, but a vast number of signals are not tied to necessary traffic sensing and

control systems, or are not adequately coordinated or calibrated to move traffic efficiently.

Operations and Safety and Security

The relationship of operations and ITS technology to security and safety , respectively.

Aspects of these relationships not covered in those chapters are summarized here.

Safety is affected by many conditions beyond the control of traffic managers, such as driver

behaviour, vehicle design, and condition of highway infrastructure, as well as by traffic

control

And signage in the traffic manager’s domain. Traffic managers can work with public safety

officials to respond to bad weather, vehicle crashes, breakdowns, work zones, and other

intrusions into the normal flow of traffic that create unexpected situations for drivers, often

causing additional crashes. Traveller advisories can also divert motorists from dangerous

situations caused by weather, work zones, and other vehicle crashes. A variety of ITS

technologies, are available to improve safety.

In addition to the concerns listed, security involves:-

• Property theft and personal assaults. Freight carriers and shippers of high-value goods

must constantly deal with property theft. Travellers become concerned, sometimes to the

point of Changing travel plans, when they hear of incidents involving personal assaults

against stranded motorists, taxicab operators or their passengers, or public transit patrons.

These incidents are similar to crashes, requiring detection and quick response to minimize

damage and identification of geographic and temporal patterns to help guide

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countermeasures. Detection systems can also be a deterrent if equipment such as video

cameras is visible to potential transgressors and can provide evidence to find and prosecute

wrongdoers.

• Regional disasters. Emergency responses and evacuations are not limited to acts of

terrorism. Transportation managers have coped with evacuations and loss of capacity on the

transportation network from hurricanes, earthquakes, floods, extensive fires in Florida and the

West, and toxic releases from freight train derailments in both cities and rural areas. Often,

some warning is given before a natural disaster strikes, and evacuations can be completed.

Manmade disasters usually require more immediate action. In either case, transportation

managers and public safety officials must know the threat to roads and travellers and any

changes in the condition of the transportation network in order to guide responses for victims

and support the logistics of reconstruction.

Implementation of Operations Strategies

A combination of improved operations, capital investments, and behavioral adjustments is

needed to maintain flows of people and goods, respond to emergencies, correct unsafe

conditions, reduce security threats, and preserve highway assets. Federal and State

transportation programs stressed the importance of capital investments throughout the 20th

Century

Special Topics

Preservation of physical assets in the 1980s. Attention is now turning to improved operations,

Particularly to the data and institutions needed to support enhanced operations.

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Traffic managers, public safety officials, and public works agencies cannot respond

effectively to traffic disruptions or life-threatening situations unless they know what is

happening on the transportation system on a continuous, comprehensive, and up-to-the-

minute basis.

What types of operations technologies are being developed?

Two of the more promising technologies involve Road Weather Information Systems and

Traveller Information Systems. Detailed weather information provided to travellers and road

management agencies promises to lessen the effects of poor weather on safety and mobility

and to reduce weather-related expenses. Much weather data are already collected by the

National Weather Service (NWS), but this information is usually not detailed enough for

specific roadways. To overcome this, many state and local governments are implementing

Road Weather Information Systems (RWIS). RWIS includes all weather-information sources

used in road operation and maintenance. In this discussion, RWIS refers only to the fixed

roadside sensor suites for pavement condition and surface weather observations.

A network of information stations is needed to measure and forecast weather conditions at the

level needed for road management. A weather station consists of a pavement temperature

sensor, subsurface temperature sensor, precipitation sensor, wind sensor, air temperature and

humidity sensors, visibility sensors, and remote processing unit. Spacing for this network is

estimated to be approximately 15 miles to 30 miles based on climatic conditions (particularly

snowfall). Additional information and closer spacing of information collection points is often

required based on several factors. These may include local weather problems such as high

snowfall, high rainfall, icing, fog, and high winds, places where the terrain makes weather

problems more difficult to cope with, and the level of snow maintenance activities.

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Traveler information systems provide assistance to the individual surface transportation

traveler and allow transportation agencies in urban and rural environments to manage service

disruptions and congestion. Information provided by a traveller information system usually

includes road closure and restriction information due to construction, maintenance, special

events, and HOV rules; current traffic conditions including recurring and non-recurring

congestion; current road conditions due to the weather; and major service disruptions,

changes, or additions.

Over the next 20 years, an $8 billion investment would be needed to maintain existing traffic

signal controls in metropolitan areas that had 50,000 or more residents in 2000 and to

maintain remaining technologies in the 78 largest areas. An additional $5 billion would be

needed to expand this technology following existing trends. A more aggressive deployment

to cover metropolitan areas of significant need would require $29 billion over 20 years in

addition to the $8 billion to maintain existing operational improvements.

The major components of a traveller information system include data collection, data

processing, and data dissemination. Costs here are based on estimates and include funding

needed for data collection and data processing but not data dissemination. Data collection

equipment is typically deployed on freeways and major arterials and includes various

roadside detection technologies (loops, video image, and microwave radar), CCTV video

surveillance cameras, telecommunications infrastructure, and an Internet-based road

condition reporting system for traffic and traveller information.

Operations Strategies hampered by the piecemeal nature of efforts to monitor traffic

disruptions and life-threatening situations, gaps in the areas covered by monitoring

equipment, monitoring equipment that is not kept in working order, and the failure to share

key information among all potential responders.

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Effective responses are also hampered by the lack of available personnel and equipment,

often attributable to jurisdictional and agency barriers to sharing resources. Accountability for

responding to incidents and fixing recurring operational problems with highway facilities is

often diffused and hard to establish. Because national and local priorities emphasize the

construction and physical preservation of facilities, traffic monitoring and control devices are

often out of service due to lack of maintenance.

Data have long been recognized as essential for planning and constructing highways, but data

are no less important for operating and preserving highway assets safely and efficiently.

Comprehensive, accurate, up-to-the-minute data are essential for highway managers who

anticipate problems and are proactive in resolving those problems, making effective tradeoffs

among a wide range of resources and consequences. Without adequate data, highway

managers have become accustomed to reacting to emergency calls and complaints with

whatever resources are immediately at hand. Data collection and integration are given low

priority because managers are not experienced with the greater efficiencies and effectiveness

of being anticipatory, proactive, and systematic.

Without public visibility and accountability for managing highway facilities, governments

will not provide adequate resources for monitoring, and the culture of highway management

will remain reactive rather than proactive. An external stimulus is needed to break this cycle

and establish a datadriven, anticipatory, proactive culture among highway managers.

Infostructure

The Federal Highway Administration sponsored a National Summit on Operations in October

2001 that brought together more than 200 transportation professionals interested in operations

strategies.

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The National Summit on Operations discussed the development of regional operations

collaborations and coordination, continued deployment of ITS technology, and national

implementation of an information infrastructure, also known as “Info structure.” At the

national level, the Info structure would include three main elements:

(1) state-wide reporting;

(2) Monitoring in large metropolitan Areas; and

(3) Surveillance of key infrastructure facilities.

State-wide reporting would provide a system in place to report on capacity-restricting events,

such as accidents, incidents, and weather obstructions. One example is the Condition

Acquisition and Reporting

System (CARS) implemented in the states of Iowa, Minnesota, Missouri, and Washington to

assist various agencies in the acquisition and reporting of incident data by reducing

communication difficulties, redundancies, and inaccuracies. Another example of a state-wide

reporting system is the Highway Closure and Restriction System (HCRS) developed initially

by Arizona, but which has been expanded to include Nevada, Utah, and New Mexico. This

web-based system reports such information as incidents/accidents, road closures, road

maintenance, traffic congestion, weather conditions, etc.

These systems are flexible enough to permit states to exchange information with adjoining

States and information service providers, and disseminate information to the public via a Web

site. This would provide important information about the closing or severe capacity

reductions of key highways. This has obvious implications for security as well as normal

operations. If transportation and public safety officials cannot obtain such information in near

real time, proper response is impossible.

Special Topics:-

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The second national element would involve monitoring metropolitan areas with more than

one million residents. This roughly corresponds to the 60 largest cities in the United States.

For congestion management as well as security reasons, it is prudent to have real-time

monitoring of volume, speed, and weather covering freeways and principal arterials as well

as major rail and bus transit systems in these urban areas. Currently, less than 25 percent of

the freeways and virtually none of the other arterials have real-time monitoring. There are a

number of different ways that this information could be provided, such as through traditional

traffic sensors like loop detectors, technologies that could provide the same information but

are not located on the highway right-of-way, or through vehicle based systems. The private

sector will likely play a key role as data provider to State and local governments.

While such information is important for any metropolitan area, it is imperative from a

security point of view to ensure our largest metropolitan areas are able to monitor their key

transportation facilities for both emergencies and other operational needs.

The third national element would involve surveillance of key facilities. There is now

increased recognition of the need to more closely monitor key transportation assets for both

protection and response.

Work to identify critical infrastructure is underway and will likely include bridges, tunnels,

key evacuation routes, and certain military routes needed for rapid deployment of

military/security assets. Some combination of volume, speed, and weather monitoring along

with video surveillance may be needed to ensure the safety and availability of these facilities.

Traditionally, most government agencies have addressed security issues in a reactive mode

rather that a proactive mode. Protecting our key infrastructure facilities should include a well-

balanced plan that takes into account both proactive and reactive measures.

At the local level, there are information needs beyond these national elements that are

necessary for local operations. These needs will vary from jurisdiction to jurisdiction and

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most will be determined at the local level. This information is needed to support such

functions as security, traffic and transit management systems, commercial vehicle operations,

incident and emergency management, regional traveler information, hurricane evacuation

route monitoring, statewide weather and road condition monitoring, and construction

management.

Regional Collaborations

Regional operations collaborations and coordination can be considered a “table” at which

regional operations policies; protocols, activities, and projects are defined, discussed,

debated, and coordinated by transportation system operators, including State and local

transportation and public works agencies, public safety personnel, and transit system

operators. Representatives at the “table” would be those responsible for day-to-day

management and operations activities. These officials would:

• Develop, maintain, and monitor the effective implementation of a regional concept of

Operations;

• Set performance targets; identify, collect, and store regional data for performance

measurement, trend analysis, and monitoring; report to the public on system performance;

• Coordinate region wide operational improvements to enhance highway safety;

• Carry out regional collaboration for security and emergency transportation operations on

key evacuation and military routes and the protection of critical NHS and STRAHNET

Infrastructure and provide for continued operations during an emergency;

Operations Strategies

• Prepare a Regional Operations Action Agenda; use performance data to identify operational

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Problems evaluate potential solutions and facilitate their accomplishment;

• Ensure the coordinated delivery of timely traveller and user information on transportation

System operations to the full range of system users; and

• Provide substantive input to the State-wide and/or regional transportation planning process

on necessary investments to improve system performance.

As long as all appropriate system operators are involved, performance of these functions

could be led by an existing regional agency, other existing agencies such as State departments

of transportation or large city or county governments, or an organization formed for the

specific purpose of focusing on regional operations. In larger States, with several major

metropolitan areas, these functions might be carried out in a different fashion in various parts

of the State. Agencies serving rural regions could also collaborate together to perform these

functions to improve operations. Rural regional operations,

For example, may focus on weather, emergency response, and work zone issues.

Conclusion

Operations will become more anticipatory, proactive, and systematic as public visibility and

Accountability for managing highway facilities improves, particularly as attention is focused

on development of timely and comprehensive information, effective traffic management

tools, adequate financial resources, and institutional authority and accountability to enable

users to make the best use of the transportation system.

Without greater attention to operations, Americans will continue to waste many hours in

delay from recurring congestion, incidents, work zones, weather, and poor traffic control;

lives will be ruined or lost because unsafe conditions and crashes are not detected and

countered in a timely fashion; and Americans will remain vulnerable to natural and manmade

disasters. Unless the problems of reliability, timeliness, safety, and security are managed

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through more effective operations, the Nation will continue to incur economic costs in

foregone productivity and wasted fuel, as well as human costs in terms of public health and a

reduced quality of life.

LOCATION STRATEGY

BPO companies have started looking beyond the traditionally hot destinations like Gurgaon,

Delhi, and Mumbai. Cities like Pune, Chandigarh, and Kolkata, are slowly emerging as the

darling destinations for both new companies and also for those who are looking at

expansions.

For instance, GE, the BPO pioneer heavyweight, instead of augmenting its existing capacity

in Gurgaon and Hyderabad, preferred to move to Jaipur recently. Msource, the BPO arm of

Mphasis-BFL, dared to choose Pune as a base. Spectramind also has started its center at

Pune. According to Milind Chalisgaonkar, CEO, Msource, said, "We are very happy. We are

able to get good infrastructure, and talented people to adhere to our aggressive ramp-up plans.

The telecom connectivity is excellent." According to Rohan Sikri, head (corporate advisory

services), CB Richard Ellis—south Asia, "Kochi, Chandigarh, and Kolkata are likely to

emerge as hot destinations for BPO operations."

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Companies like Daksh are exceptions, though. Daksh is going ahead and setting up its fourth

center in Gurgaon, besides one in Mumbai.

With several state governments coming up with ITeS policies to promote their respective

states as best location, there is going to be lot of interest. Chandigarh was the latest to

announce its ITeS policy in January 2003. It’s another matter that Nasscom’s report on Super

Nine Destination didn’t include the city.

According to Nasscom, the ITeS industry in India is experiencing the third wave of growth,

both in terms of geographical areas of operation and services offered. In the first phase,

according to Nasscom, the industry was dominated by captive centers of large multinationals

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such as GE, American Express, and Swiss Air, which set up operations in leading metros like

Delhi and Mumbai.

In the second phase, the growth of the industry attracted numerous entrepreneurs (in many

cases, employees of multinationals who quit their jobs to set up their own ITeS ventures)

again in and around Delhi (the NCR region) and Mumbai (including Navi Mumbai).

The third phase of growth has been more geographically dispersed—with new locations like

Hyderabad, Pune, Bangalore, Chennai, and more recently, Kochi coming up. The CII

submitted a ten-point agenda to DoT last year to promote ‘hot sites’ in India. These sites,

according to CII, should be ready to serve sites or seats where processes can continue in the

event of a disaster at the original location.

No of BPOs States

69 Maharashtra

67 Karnataka

43 Andhara Pradesh

43 Haryana

36 Uttar Pradesh

34 Tamil Nadu

29 Delhi

13 Punjab*

9 West Bengal

5 Kerala

29 Other States

*ChandigarhUT included

Location Preference of BPO Companies

No of Companies Class Locations65 Bangalore59 Mumbai39 Hyderabad34 Chennai42 Gurgaon29 New Delhi32 Noida3 Ghaziabad

Upcoming Locations

9 pune9 kolkata5 chandigarh5 Ahmedabad4 Secunderabad3 Vishakhapatnam3 panchkula3 Mohali3 Jaipur3 guwahati3 gandhinagar3 Cochin3 srinagar3 bhubaneshwar12 Others

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Site Selection Parameters

Selecting the site for a BPO operation has become a highly complicated affair. Earlier,

companies used to decide about the destination just by riding over the hype surrounding a

particular destination. That’s no more the case. Existing and potential companies have

graduated to hiring international real-estate consultants for advice on location strategy. It is a

booming business for real-estate consulting companies. Recently, GE hired CB Richard Ellis

when it decided to expand beyond Gurgaon, while the Chandigarh administration roped in the

UK-based consultant Jones Lang Lassalle. Richard Ellis did a comparative analysis of 18

prominent cities across India. Some of the key parameters included state government policies,

manpower availability, and catchment zone analysis. The goal of these exercises, according

to consultants, was "quantification of the impact of identified parameters to support an

objective location decision."

Globally, the trend is towards setting up smaller centers which cater to around 200 people as

the realization is that smaller locations would create a sense of togetherness among

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employees and promote teamwork. With regards to real-estate prices, most of companies are

looking at sub $1 per sq. feet kind of rental.

In terms of priorities for different parameters for site selection, there is no unanimity among

companies. While some companies like ICICI OneSource sees robust telecom infrastructure

as the most important criterion, others like Milind of Msource feel that availability of

English-speaking graduates is the top priority, apart from good physical infrastructure for

office, telecom infrastructure, and proximity to a good international airport. Sanjiv Agarwal

of Daksh also accord top priority to HR-related issues in terms of availability of quality and

numbers followed by telecom infrastructure-related issues, including connectivity through

IPLCs. He also lists good physical

infrastructure, presence of competition, city

perception/entrepreneurial history of the city,

and favourable state policies.

Kerala—The State to Watch

God’s Own Country Gears Up

Kerala is one state that has shown the resolve to become an ideal destination for BPO

operations. Kochi is emerging as a hot new destination and is fast catching up to its

southern brethren Karnataka and Andhra Pradesh. Though the total of BPO companies

currently operating in Kochi is 3, the amount of interest that the government has shown

in the last one year is tremendous. GE has evinced

interest in setting up one of its future centers in Kochi. The state has the distinction of

having the highest density of science and technology personnel in India, besides lowest

employee attrition rate in the country - <5%, an issue which is becoming a major area

of concern at some of the traditional locations in the Metros and adjoining cities.

TransWorks, a leading BPO player has already finalized its plans. It is setting up an IT

Enabled Services Habitat at the GCDA complex, Kochi with a total built up space of

15,000 sq. ft., the Habitat provides basic facilities such as built-up space, power, water

in a pleasing ambience. As regards qualified manpower, the total enrolments in the

state colleges and universities stand at 597,629.

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The availability of bandwidth, which was long felt to be the key criteria for site selection has

become a non-issue due to reasonably robust connectivity services being provided by the

VSNL, BSNL, MTNL and now the private operators like Tata and Bharti. With Reliance’s

network going live in 600 cities in March, it would not be surprising if companies move to

totally new locations.

Gurgaon, Mumbai, Bangalore, Hyderabad, Delhi, and Noida—traditionally the haven of BPO

companies—play host to a total of 266 companies, thus making the locations overstretched in

terms of availability of manpower and extreme pressure on physical infrastructure.

Transportation costs have skyrocketed and form a major chunk of companies’ expenses.

Besides, competition has increased. An upward hike of Rs 500 is good enough for a BPO

professional to move to a company located next door.

Traffic congestion in the A-class cities is high. Gurgaon is the worst with national highway

number 8 getting almost choked at peak hours. While work on the long-promised expressway

got underway last month but its completion will take at least three years, given the scale of

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the project. Earlier companies used to prefer those staying in and around Gurgaon and South,

West Delhi in an effort to cut travelling time and cost. But due to increased competition, they

can’t do that anymore. Now, professionals come to work at centers in Gurgaon all the way

from East Delhi, and even Noida and Ghaziabad, which means more cost to the company.

Mumbai is also heading in the same direction. Telecom costs are among the highest, besides

pressure on transport system. Mumbai is one city where domestic companies are thriving. But

R Mohan, CEO, Hinduja TMT, feels otherwise. When asked as to which city he would prefer

if Hinduja were to expand, he said, "We will definitely go for Mumbai. This is because our

group has strong roots there. The telecom infrastructure is very good and it is well connected

internationally. Also, the availability of people is there, which is very important." He feels

that Trivandrum and Pune will emerge as future destinations.

Bangalore, Hyderabad (the top ITeS destination as per the Nasscom report), and Chennai,

despite having a large number of centers, are still considered good though, thanks to the

strong state government policies accompanied by the strong presence of big software houses.

But these locations too have witnessed some problems in relation to pressure in manpower

terms.

Future Locations

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Pune

Pune has attracted nine companies, with Msource being the flag bearer, followed by

Spectramind. This is one location that is fast emerging as a hot new destination for BPO

operations. Proximity to Mumbai and presence of STPI are added advantages.

Manpower: Total enrolments of higher secondary, degree, and university students in the

entire state of Maharashtra are 3,044,626. Pune is home to some good English medium

schools. The volume of transient population that comes to study in Pune is very high.

Telecom Infrastructure: The city boasts of an Intelsat Standard C-Band earth station to

provide connectivity to any point of the globe. Ku-band earth stations have also been set up at

Nashik and Kolhapur with additional fibre connectivity from Pune for redundancy. STPI

Pune has tie-ups with 18 international carriers to provide connectivity anywhere in the world.

What needs to be done: According to Anurag Mushi, associate director (research), Jones

Lang LaSalle, Pune as a destination for BPO operations has not been promoted adequately by

the government of Maharashtra. City transport system needs to be streamlined. It can

leverage its strength of proximity with Mumbai, besides tapping the talent from satellite

towns of Nashik, Kolhapur, and Aurangabad.

Chandigarh

With five companies operating out of Chandigarh, the number is set to go up with a flurry of

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activities and initiatives taken up by the Chandigarh Administration. A lot of companies have

shown interest in setting up their facilities here.

Manpower: Total enrolments in Punjab are around 3,456,852. Though Chandigarh has a

literacy rate of 82 percent and home to some very good schools and colleges, the availability

of sufficient English speaking manpower with good functional and communication skills is

still an issue, which was highlighted by Gartner in a report recently.

The out-migration of the potential workforce to Delhi and Gurgaon has been there for a long

time. There is feeling in the government that with the companies coming in to Chandigarh,

this out-migration will somewhat subside. Chandigarh has also the potential to attract talent

from Himachal Pradesh, Haryana, and Delhi. Ironically, the city was not in Nasscom’s list of

super nine cities.

Telecom Infrastructure: In terms of telecom infrastructure, a fibre optic backbone network

covers the whole of Chandigarh. About 110 km of optical fibre has been laid by private

operators, besides BSNL. Every point in the city is within 1 km of the optical fibre network.

Gartner, in a study, has rated Chandigarh as the city with best telecom infrastructure. The city

boasts of an STPI earth station. Chandigarh Administration announced its ITeS policy, which

is aimed at inviting BPO companies to set up their operations in Chandigarh. It has offered

the services of Chandigarh InfoTech Park, spread over 111 acres on the north eastern border

of Chandigarh, which has the capacity to house 40 companies.

Government Support: The establishment of Chandigarh InfoTech Park, being promoted by

the Chandigarh Administration is the single biggest step that the government has taken

recently. To add to this, the government recently announced the ITeS policy. Centers for

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accent training, and for basic computer and Internet training and customer handling skills will

be set up.

What more needs to be done: According to the majority of future investors intending to

invest in Chandigarh, the frequency of flights between Delhi and Chandigarh should be

increased till an International Airport comes up.

Kolkata

Manpower: Kolkata’s greatest advantage is the number of high-quality English medium

schools, which is probably the largest in the country. Total enrolment of higher secondary,

degree, and postgraduate students in West Bengal is 1,007,227.

Availability of quality manpower at reasonable salaries is a major attraction for Kolkata.

Telecom Infrastructure: BSNL provides dedicated leased line up to 140 Mbps and more. It

has also started offering managed leased line services. It also provides data circuits on a

national basis. It has STM-16 ring based core network supported by STM-4/STM-1 access

rings connecting important buildings, provides instant provisioning of bandwidth for both

point-to-point leased circuits as well as high-speed Internet access. Reliance is all set to

launch its services in the city in coming months, thus making connectivity a non-issue.

Government Support: The government’s ITeS policy has tried to send the right signals to

investors by offering fiscal incentives. It is roping in NRIs, leading industrial houses,

software companies and venture capital companies to address the huge opportunity offered by

IT-enabled services and back-office services. The government plans to introduce vocational

courses in ITeS. There are also plans to promote the setting up of at least two world-class

software technology parks by 2004.

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What needs to be done: The state’s history of strong trade unionism acts as a deterrent? The

government has to undertake a major initiative to change this perception. Just offering fiscal

incentives will not suffice. Besides, the quality of transport, power, and sanitation.

 

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Journal of Operations and Production Management, 19, 2, 1999, 135–138.

3. Gordon, Benjamin H. “The Changing Face of Third Party Logistics,” Supply Chain

Management Review, March/April, 2003, 50–57.

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4. Grover, V., and M. K. Malhotra. “A Framework for Examining the Interface Between

Operations and Information Systems: Implications for Research in the New Millennium,”

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BIBLIOGRAPHY:-

1. www.bpo.nasscom.org

2. http://www.Infosys.com/bpo

3. www.google.com

4. www.wikipedia.com

5. http://www.businessweek.com/magazine/content/01_24/b3736644.htm?chan=search

6. http://www.wharton.universia.net/