Chennai has emerged as the most attractive city for offshoring, beating traditional top cities like Gurgaon, Faridabad, Noida or NCR, Bangalore and Mumbai. Hyderabad follows as a close second-most attractive city. Kolkata is emerging as a credible alternative to cities with more established offshoring services industries. These key findings were released by A.T. Kearney on Saturday, the global management consultancy firm in their Indian City Services Attractiveness Index 2005.

The cities have been benchmarked as attractive based on three major categories of financial costs (compensation costs, infrastructure costs, cost of living); people skills & availability (availability, educational skills & attrition rates); and the business environment (city infrastructure, quality of life and government support).

Chennai emerged as a clear leader across all categories followed by Hyderabad, NCR and Bangalore.

Nine Indian cities of Chennai, Hyderabad, NCR, Bangalore, Mumbai, Kolkata, Pune, Kochi and Jaipur were assessed for their attractiveness for placing offshoring services.

According to Mr Mohit Rana, principal, communication & technology practice, A. T. Kearney, Gurgaon, they see a “trend of vendors developing Tier 2 locations as the Tier 1 are expensive.” Mr Arjun Sethi, principal, BPO & offshoring, A. T. Kearney, New York, said, “The A. T. Kearney study as expected reflects that the Tier 2 cities have a significant cost advantage.