With tier-I cities like Mumbai, Bangalore and National Capital Region (NCR) facing problems of a rapidly depleting talent pool and multi-fold rise in cost of operations, tier-II cities are becoming attractive. Premier cities in Gujarat like Ahmedabad-Gandhinagar, Vadodara and Surat fit the wish list of companies perfectly, says a research paper by CII-KPMG.Exports of IT-ITeS services from Gujarat were around $131 million in 2006-07 with more than 480 companies operating from the state as against exports of $46 million and 295 companies in 2004-05. The IT-ITeS sector in the state is primarily dominated by small- to mid-sized third party players and is not home to any large captive BPO.Pradeep Udhas, Global Partner-in-Charge, Sourcing Advisory, KPMG, said: "Companies are expanding their operations beyond existing centres. Availability of suitable talent, supportive infrastructure and competitive cost of operations are the key factors that influence their choice of locations." Though Gujarat currently accounts for a small share in the IT-ITeS industry, it possesses the prerequisites to emerge as an alternative destination and replicate some of the success stories of other states in IT/ITeS."Gujarat should focus on its core strengths rather than replicate the Bangalore & Hyderabad model. For example, Gujarat produces the highest number of chartered accountants. Equity market knowledge is in the DNA of an average Guajarati. So, the state could focus on accounting services and equity research in the KPO segment," added Udhas.The state is witnessing a change with an increasing number of IT-ITeS players considering Gujarat as a serious option. For example, ICICI Bank is planning to set up a captive BPO in Gandhinagar, which will employ around 30,000 people. Satyam has established a centre, and TCS is planning an expansion of its current operations.
