Financial Daily from THE HINDU group of publications
Thursday, Jun 20, 2002
Non-traditional centres set to surface on the ITES radar
V. Rishi Kumar
HYDERABAD, June 19
WHILE several countries are vying with each other to catch up with the global IT enabled services pie, within India, which has become an ITES hotspot, lately, States are wooing companies to do the sector what the software services industry had done in the last decade.
And not surprisingly, this time around there could be some surprising new entrants playing a decisive role. Delhi covering Gurgaon and Noida, Mumbai including Navi Mumbai, Chennai, Bangalore, Hyderabad and Pune have rapidly gained, and new destinations including Kochi, Ahmedabad and Kolkata along with second rung towns are swiftly moving on the radar.
But the challenge, as re-enforced by the Nasscom-McKinsey report, is to meet the infrastructure demand. For instance, the thrust for this sector comes from unfamiliar States such as the West Bengal, Kerala who have been relatively late entrants joining the quest to woo companies to locate their facilities. While the traditional software drivers Karnataka, Tamil Nadu, Andhra Pradesh and the Noida region continuing to build on their strengths, these two States have made rapid strides, according to industry and Nasscom.
Some of these States have initiated steps to address special regulatory concerns for the ITES sector, to facilitate changes in labour laws, clearance procedures and assign priority status to this emerging sector.
While Andhra Pradesh has amended the Shops and Establishments Act, Karnataka is working towards industry facilitation Act and Haryana is coming up with `Self Certification' mechanism while amending several facilitating laws to catch up with opportunities.
Skilled manpower has been difficult to come by and quality issues have come to the fore. As the industry is seeking certain sops to catch up with the opportunity, each State is charting out strategy and Andhra Pradesh has already announced a policy for the ITES sector.
This was later followed by APFIRST, yet another initiative aimed at targeting the growing BPO segment. With the HR base relatively small, States such as Tamil Nadu and Andhra Pradesh have established virtual varsities.
The latter's initiative is aimed at honing up soft skills to meet the requirements of the industry. It has forged alliances with NIIT and Hero Mindmine to build the necessary manpower requirements. Of significance is the effort to take ITES to second rung towns and build infrastructure to attract companies.
According to Nasscom estimates, as outsourcing reach broadens, some very dramatic patterns are emerging. Earlier, these companies used to outsource in areas such as manufacturing where cost considerations were paramount.
Now the companies outsource even those activities, which involved day to day functions such as facilities management and information services maintenance.
This will mean several critical services will be obtained through FDI and Nasscom has demanded hiking the cap on to 74 per cent.
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