INTERVIEW

“We want Chennai to become the ITeS hub of the country”

Vivek Harinarain, IT secretary for the government of Tamil Nadu, is the man trying to get Tamil Nadu into the top of the heap on India’s IT and ITeS front. In an exclusive interview with Rahul Neel Mani, he said Chennai will be India’s ITeS hub in the near future

* Could you tell us about the TN government’s ITeS Policy 2003, which is expected to be announced shortly?

The ITeS policy of the government of Tamil Nadu was released in the public domain during Connect 2000, an annual ICT exhibition organised jointly by CII and the TN government. This was essentially done to find out from the Indian and world IT community whether we should make any changes in the same. The answer was yes, because we received thousands of suggestions. After this we had over half a dozen meetings with the ITeS industry in TN, based on which the final ITeS policy has been prepared.

* What are the salient features of this policy?

The objective is to ensure that Chennai becomes the ITeS hub of the entire country. The government of Tamil Nadu—and specially the IT department of the state—is going to ensure greater focus on industry verticals such as BFSI, healthcare, education and design and engineering.

The policy also talks about the steps that the state government will take to ensure that we are able to capture about 15-20 percent of the ITeS business in India. Already, about 17 percent of the country’s total software exports come from Chennai. The idea is now to chase and capture the same amount of business in the ITeS sector.

* What is so unique about the infrastructure Chennai is offering its customers? How is it different from that of other states?

Gurgaon is an ITeS hub only for voice-enabled outsourcing. Chennai is and will be the national hub for data and other back-office processing facilities. The data processing facilities of Ford Motors and Citibank were established in Chennai 12-13 years ago. If we see the BFSI sector, the entire back-office outsourcing of Standard Chartered’s worldwide operations are in Chennai. Now the World Bank has also selected Chennai. Earlier the feeling was that voice-enabled ITeS would grow only in places where people could quickly learn a foreign accent. For this reason, the Mumbai-Pune belt and Delhi-Gurgaon belt did well initially. But I believe that we can find the finest English pronunciations in Chennai.

In the voice-enabled ITeS segment one also needs to look at the total cost of ownership (TCO). In the beginning people were interested in setting up business quickly and then scaling up fast. But the attrition rate in the northern belt is as high as 60-70 percent. But in Chennai the attrition rate is just 12-14 percent, which means lower cost and more experienced people. Chennai is also a far more economical and value-added destination in terms of the TCO.

There are a few other things that are extremely important for any ITeS company. First, business process continuity. In terms of seismic zones, Chennai is in a less dangerous zone as compared to the northern and western parts of India. In terms of bandwidth, terabit bandwidth—Bharti’s i2i undersea cable-based bandwidth (8.4 Tb/sec)—is available to Chennai because it lands there before moving on. Chennai also has a large human resource base. The computer school education programme initiated by the TN government is now being followed by several other states. We started off in 1,200 schools, and today more than 1,00,000 students are being taught computer science.

* While gearing up for ITeS, are we forgetting software offshoring?

No. Chennai is very strong in software exports, which have grown from Rs 3,500 crore in 2001 to Rs 7,000 crore in 2003. This gives us a 50 percent growth rate while the rest of the country is growing at about 28 percent. If we continue to grow at even 40-45 percent, our share of national software exports will be at least 20-22 percent.

The government realises that the best we can do is to offer an enabling environment, provide proper facilities, and leave companies alone, without much interference. The industry is being exempted from various time-consuming procedures. We have given them flexibility in timings, flexibility in holidays, flexibility in working hours, and flexibility in gender sensitisation, which means ladies can work 24/7. Basically, we are providing a perfect environment for business continuity with the least-interfering government rules.