Bangalore retains outsourcing throne, Manila climbs to second

Bangalore retains its status as the world's most popular outsourcing destination, joining five other Indian cities on the list of top 10 locations in this year's Tholons top 100 index. Manila displaces Mumbai to take second position.

Bangalore has retained its status as the world's most popular outsourcing destination, joining five other Indian cities on the list of top 10 locations.

According to this year's Top 100 ranking by consulting firm Tholons, Bangalore held on to its pole position as the leading IT and IT-enabled services outsourcing hub worldwide, and was joined by five Indian cities--Mumbai, Delhi NCR, Chennai, Hyderabad, and Pune--in the Top 10. 

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Mumbai, however, slipped to third position and was displaced by the Philippine capital, Manila, which climbed to second. Other Philippine cities showed improved rankings too, including Davao City, Santa Rosa, and Bacolod City, while Cebu City retained its No. 8 placing. 

"The Philippines was predominantly in voice-based BPO (business process outsourcing), but now, non-voice BPO is also growing significantly," said Vikrant Khanna, principal at Tholons, in a report by Times of India. He added that global companies were showing much interest in the market, including Indian service providers looking to mitigate their business risks. 

However, the Philippines has a much smaller population compared to India, so service providers in the country scale at a slower pace than those in India, the report noted. 

India's tier-2 cities demonstrated improved rankings this year, alongside their counterparts in Poland and South America. Chandigarh placed 23rd, Kolkata at 25th, and Jaipur at 38th, while Ahmedabad showed the best improvement climbing six positions to 63th.

The marked improvements this year indicated initiatives to drive IT and IT-enabled services in the country's tier-2 and tier-3 cities were yielding results, though, Khanna noted it remained unclear if these cities were able to expand their services portfolio. 

Tholons' index assesses cities in six areas including scale and quality of skills, cost, infrastructure, and market risks such as political and social threats. This year's top 100 ranking includes 39 locations in the Asia-Pacific region . Poland's Krakow climbed one position to No. 9 spot, while South Africa's Cape Town climbed nine places to No. 59.