Today in Tech: Small Town Attractions; Impact of the recession and Win...

Small Town Attractions: Lower attritionIn a 1998 paper, Harvard professor Michael Porter argued that business clusters - concentration of similar businesses in one specific area - made sense because “geographic, cultural, and institutional proximity provides companies with special access, closer relationships, better information, powerful incentives, and other advantages that are difficult to tap from a distance”.In Economic Times today, Capgemini CEO Hubert Giraud  explains why distance matters too. After good experience in Salem, its earlier venture in a small town, it opened a BPO centre in Trichy last week, away from better known clusters such as Bangalore, NCR or Chennai. "We did a study before setting up the Salem centre and it has been a success for us. It's not to replace Chennai or Bangalore, but to compliment each place. Attrition wise these cities fare well. But the crowd in Bangalore, they can go to 20 other companies and they receive head-hunters' call every morning," he said.A senior executive from Honeywell once told me that he decided to set up a centre in Madurai after he found himself bumping into his colleagues in a train, during a trip to the temple town in Tamil Nadu. He learned that the young software engineers undertook the journey almost every weekend to be with their folks. That opened his eyes to the resource pool he could tap in and around the small towns.Honeywell’s development centre in Madurai is small (when I last checked it had about 300 people). Capgemini’s Trichy centre is small too - it will employ about 200 people. But, TCS is planning something bigger in Indore, Madhya Pradesh. Yesterday, the company said it will invest $102 million in a new software and business process outsourcing facility. The first phase - which will be ready by March 2016 - will have the capacity to employ 10,000 people. Immediate payback: Impact of the recessionNV "Tiger" Tyagarajan, President and CEO, Genpact, in an interview with HorsesforSources, talks about how recession has changed the conversations with the clients:

It has changed the lens people use. Earlier, it was “Let’s do the whole thing in a three-year journey.” Now it is: “Yes, I want to undertake that journey. I am going to evaluate you on whether you can handle that whole journey. But I am going to break it up into three parts because I want an immediate payback.” That’s the tough part. Today, large corporations are dividing up the work to get a faster payback. They want a bigger bang for the buck.