Print

Comment

Email

Digg

Del.icio.us

Reddit

Twitter

In the last two years the IT boom has spilled over to tier-2 cities. While apprehensions still remain, some state governments are going all out to promote tier-2 locations. Take the case of Tamil Nadu, which is a pioneer in the hub and spoke model of developing IT, with Chennai as the nerve center. According to Dr C Chandramouli, IT secretary, Government of Tamil Nadu, Tamil Nadu is one of the most urbanized states in the country.Our hub and spoke model development is aimed at promoting IT all across the state so that Chennai does not get choked.

Emerging IT Hotspot
When companies think of IT outside Chennai, one destination that tops the agenda is Coimbatore, as it is the hub for a lot of SMEs manufacturing ancillaries and has a culture of engineering design. But when we look at the SMB spending on IT, its very minimal, with most of it spent toward the manual processes segment. Though, there seems to be a huge opportunity for EPO kind of services, both for local and global markets.

Industry bodies like CII believe Coimbatore is an ideal destination for engineering process outsourcing (EPO). This primarily involves engineering design and CAD-CAM work. The region has carved a niche for some of the engineering sectors like pumps, foundry, auto components, and machine tools. The EPOs will be an automatic extension to the inherent strength of the region.

CII has been highlighting Coimbatore as an ideal destination for IT and BPO investments. CII, jointly with ELCOT, organizes the annual Connect Coimbatore event to showcase the new business opportunity in the IT and BPO sectors, and also to showcase Coimbatore as a suitable destination, says EB Rajesh, deputy director and head, Coimbatore Zone, CII.

Meanwhile, on the IT and BPO services side, things have started rolling. The government has identified Coimbatore as one of the most promising tier-2 cities and has announced a TIDEL Park. The government has also launched a 56-acre ELCOT SEZ with a proposed built up area of 4 mn sq ft. Companies like TCS and Wipro are also developing their facilities in the SEZ.

Why Coimbatore?
According to industry sources, the locational advantage of Coimbatore, its proximity to both Bangalore and Chennai, and the huge talent pool available, makes it a good expansion base. Going by government statistics, Coimbatore has 27 engineering colleges, 72 arts and science institutions, and 18 polytechnics, making it the ideal recruitment destination. Also, instead of moving the local talent to facilities in Bangalore, Chennai, or elsewhere, companies feel that it makes more sense to employ them in the same location, which in turn helps in retention.

Take the case of IT major Cognizant that has around 2,000 employees in Coimbatore. Says Vishnu Potty, vice president and head, Coimbatore Operations, Cognizant: Historically, Coimbatore has been a strong sourcing base for our operations across India. Over 10% of our annual fresher intake has been from engineering campuses in and around Coimbatore.

Our growth in Coimbatore has surpassed our expectations. When we started operations in 2005, our plan was to ramp up to 400 professionals in the first year but we ended up with a headcount of 900, more than double the planned number, adds Potty. Cognizants Coimbatore center focuses on four industry clustersfinancial services, healthcare, manufacturing and retail, and information, media and entertainment.

Meanwhile, IT major Wipro has been allotted ten acres for its facility in Coimbatore, and TCS around five. Also, Cognizant is aggressively planning for further expansion. It has plans of expanding its presence in Coimbatore with a fully-owned techno complex in Keeranatham village, near Coimbatore.

There are some leading homegrown companies as well. One company that has deep roots out of Coimbatore is KG Information Systems (KGISL), which provides IT and BPO services. On the IT side it focuses on BFSI. The software technology campus of KGISL in Coimbatore is spread over 25 acres, and the companys software and BPO services divisions are housed in the campus in a four level 100,000 sq ft state-of-the-art building.

Apart from being an IT company, KG is also into infrastructure development. It has developed the Coimbatore Hitech Infrastructure (CHIL), which is a 34.7 hectare IT park, with companies like Robert Bosch, and Perot developing their facilities. Says Jayamurali Balagurusamy, vice president, Corporate Affairs, KG Information Systems: The combination of engineering, arts and science colleges makes Coimbatore a good recruiting ground for IT services and BPO operations. We have successfully leveraged the talent pool and created a highly successful organization.

Another local company that made it big and lost focus somewhere in between is CG VAK. The company started with ERP products and was quite successful initially but lost out when biggies like SAP came in. After some tough times the company is now on the threshold of a turnaround. Says G Suresh, managing director, CG VAK: We are now into the outsourced product development (OPD) space. Our OPD offerings revolve around domains like EDI and healthcare for clients in the US and Canada. In terms of Coimbatore as an IT destination, I consider it is an ideal base for companies to expand and tap fresh talent. But finding mid-level management people is very difficult.

BPO Activities
Off late BPO is getting localized and many BPO companies are inking a tier-2 strategy. Take the case of Perot Systems, one of the big ticket BPO operations in Coimbatore. Perot entered Coimbatore a year and half back and has subsequently ramped up its operations to over 500 business process associates. Its Coimbatore facility provides services in domains like healthcare, life insurance, finance and accounting. Also, processes such as medical coding have seen immense success at the facility.

Perot also operates a dedicated recruitment center in Coimbatore, and is developing its own campus in Coimbatore. The facility will provide both technology and BPO services.

Says Anurag Jain, regional managing director, Asia Pacific and president, CAS and IBPS, Perot Systems; We view Coimbatore as a very exciting location in our global delivery model. We were pleasantly surprised with the quality of talent available, and started delivering complex healthcare processes such as medical coding and accounts receivables management services.

Clearly, with companies like Perot Systems meeting their requirements in Coimbatore and getting talent that is at par with the urban centers, is enough indication of the potentials Coimbatore holds in both voice- and transaction-based BPO work. The BPO edge comes due to its track record in medical transcription, which actually started in small pockets in Coimbatore and in a way has created awareness on process outsourcing.

Outlook
With big names like Cognizant and Perot Systems already in, and aggressive plans by TCS and Wipro, plus local companies like KGISL showing interest, Coimbatore seems to be firmly placed in the tier-2 map. Once completed, upcoming IT parks would create a huge real estate of ready-made space suitable for expansion.

That both the government and private players are active in building large infrastructures augurs well for Coimbatore, but the activity has just started and it needs to snowball. The proof points created in the IT, BPO, and engineering design segments will act as catalysts in attracting more investments in the days ahead.

Shrikanth G
shrikanthg@cybermedia.co.in

Page(s)   1