?It is difficult to sustain the growth in tier I cities because of the rising real estate prices and talent crunch. There is no option but to move to tier II cities,? Everest Group's Country Head (India) Gaurav Gupta said.
As of now, BPO industry is concentrated in seven cities namely Bangalore, NCR, Mumbai, Pune, Chennai, Hyderabad and Kolkata.
?Movement to lower-cost cities within India is likely to result in additional 15-30% reduction in operating cost despite lower employability and higher management costs,? head of Global Services at Everest Research Institute Nikhil Rajpal said.
Everest Group is a global consulting firm specialising in sourcing and offshoring advisory services.
The study ranks several tier II and tier III cities on their potential to become the next BPO hubs for various domains in the future.
For finance and accounting services, Ahmedabad, Nagpur, Jaipur, Indore and Nashik emerge as ideal cities to host BPO firms.
Similarly, Nagpur, Vishakhapatnam, Ahmedabad, Coimbatore and Mundra are ideal locations to have BPO operations in logistics domain.
