Ahmedabad among 31 emerging cities globally in IT: KPMG

Jaipur and Nagpur the only two other cities that feature in report

With the likes of TCS, Patni Computers, Mphasis, Aegis, Azure and Motif witnessing flourishing business out of Ahmedabad, the Gujarat's commercial capital is now among 31 emerging cities globally for the information technology (IT) and business process outsourcing (BPO) industry, says a latest report by KPMG, the global accounting firm. Apart from Ahmedabad, Jaipur and Nagpur are the only two Indian cities that have featured in the report.

Titled as 'Exploring Global Frontiers- the new Emerging Destinations', the report has identified 31 relatively unexplored cities, for IT and BPO. Although these cities comprise attractive investment locations, the report states that their 'emerging' status also implies a certain degree of risk for potential investors. From the Asia-Pacific region, the report has selected cities like Brisbane, Changsha, Hangzhou, Ahmedabad, Jaipur, Nagpur, Penang, Davao City, Iloilo City and Ho Chi Minh City.

As per the report, these cities are mostly in tier II and III categories and are able to provide a large range of outsourcing services including IT, BPO and knowledge process outsourcing (KPO). Also, the major markets serviced by companies in these cities are the US, the UK and Japan. The report takes parameters like IT services, call center, back-office services, R&D and engineering services into consideration.

Based on these parameters, while Ahmedabad and Nagpur score in terms of IT services and back-office services, Jaipur is a step ahead of them and also offers adequate call center services as well.

The KPMG report also highlights that enterprises are moving offshore not only to benefit from lower costs and access to a diversified talent pool, but also to get an added 'first-mover' advantage if they tap these relatively unexplored cities.

Talking about the report, Egidio Zarrella, global partner-in-charge, IT Advisory, KPMG said, "Over the longer run, companies are likely to pursue rationalisation measures. In the IT/BPO industry, these measures are likely to focus on the search for lower cost business alternatives globally, that could also allow companies to provide diversity to their global operations. Though the established locations may still be considered as the epicenters of outsourcing, entities are beginning to look at other alternative locations due to a variety of drivers."