Monday, May 01, 2006

Planning an LPO: Where to locate?

As a true optimist, I believe in the huge potential of LPO (hey, goes without saying, I run this blog!). Thus, I do believe that a number of firms with LPO aspirations will want to set up presence in India. The recent funding of Pangea3, should motivate other VCs to fund such firms. In the words of Shyster, "VC's are like lemmings, and if one starts investing, the others will follow"!

Since one of the objectives of this blog is to aid firms thinking about India as a place to setup an LPO shop, I compiled a list of factors - pros and cons - for some of the Indian cities that may be considered for setting up an office. Please note that this list is a quick job, and is limited by my awareness. Any amendments, suggestions to/about this list will be most gladly accepted and acknowleged.

Mumbai
(+) Well connected
(+) Availability of local talent, especially law graduates
(+) Some presence of competition, good news for an HR manager
(+) Presence of a lot of law firms, if that matters
(-) High costs, for the corporate and outside hires
(-) Infrastructure breaks down in certain parts hampering connectivity (2005 floods just brought the city down)
(-) Commuting distances are typically large due to geography
(-) Some presence of competition, bad news for an HR manager

Bangalore
(+) Tech capital of the country
(+) Ample availability of tech talent
(+) Local presence of tech companies, beneficial for aiding in local liaison
(+) Home to one of the nation’s best law school, availability of local law talent
(+) High costs
(-) Infrastructure going from bad to worse

Delhi National Capital Region (includes Delhi, and smaller adjoining towns of Gurgaon - the call center capital of India - and Noida)
(+) Infrastructure - good and improving (thank the Commonwealth Games 2010)
(+) Very well connected - National Capital
(+) Lower costs
(+) Availability of local talent, legal and technical
(+) Some presence of competition, good news for an HR manager
(+) Presence of a lot of law firms, if that matters
(-) Minor - Politically more sensitive
(-) Some presence of competition, bad news for an HR manager

Hyderabad and Chennai
(+) Well connected
(+) Lower costs
(-) Lack of local talent
(-) Not a favorite among those who need to relocate

In addition, I analysed the existing players in the market and compiled the table below. Clearly, Delhi NCR seems to be the choice among the fraternity.

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