THE RISE OF RURAL BPOS IN INDIA

The former CEO of GE, the legendary Jack Welch, gave “70:70:70 Theory” as appropriate business strategy. The theory states that 70% of the business processes were outsourced, 70% of the outsourced processes went offshore and 70% of the offshore facilities were located in India.

I recollect last monsoon when I was sitting in a coffee shop in Noida my brother in law told me about a company named “rural shores” which is trying to take the BPOs to tier 2 , tier 3 cities and villages . I thought it is a great initiative because all the BPOs of which i was aware of were in big metro cities like Noida , Mumbai, Bengaluru. Whenever we think of BPOs the thing that comes to our mind is Telecaller, but actually BPO industry is much more than what we see or rather I should say listen.

Some of the services offered by the BPOs are as follows:

1. Customer support services : eg any person calling to check his bank account status.

2. Technical support services : eg any person calling to resolve the problems in his laptop.

3. Telemarketing services : eg everyone knows this one, selling credit and debit cards.

4. Employee IT help desk : eg providing technical support to corporate employees.

5. Data entry services : eg entering data of any transaction say sales and purchase.

6. Data conversion services: eg from text to PDF.

PARAMETERS URBAN BPO RURAL BPOInvestment High LowOperation cost High LowSkilled Resource Availability High LowManagement Overhead High LowAttrition High LowRate per hour High LowTechnology Cost Low HighTraining Cost Medium High(to compensate low

skills)Rural Employment Low HighData Security Issues Low Medium

- Source : Drishtee Foundation

With majority of population below 40 and acquainted with English, India has become

a favourite destination for outsourcing operations from foreign countries. According to NASSCOM India has more

than 200 call centres with a turnover of more than 2 billion us dollars generating tremendous amount of employment. As all the major BPO centres are in metros so they draw a huge crowd from the semi urban and rural areas. In fact almost 60 % of the computer engineers in the BPO industry come from rural area with an aspiration to find a job in big cities like Mumbai, Bangalore etc. This results in poaching and high attrition rates which in turn results in high cost of training and recruitment.

With 70% of the population coming from rural regions and India being located in a different time zone which enables it to work in night shift, setting a centre at such a place is highly cost effective because of which the companies have become optimistic about the rural BPO. Also there is a CMM model which is capability maturity model developed by the Carnegie Mellon University, this model evaluates software development processes of companies and around 387 Indian companies are accredited. NASSCOM reports that BPO industry will face shortage of 262,000 workers by 2012.The solution to this lies in rural India , according to The Organisation for Economic Cooperation and Development (OECD) there are 130 million surplus workers in rural India and also there are about 200 odd BPOs which are mostly run by NGOs for the rural purpose.

The establishment of such centres will result in development in infrastructure , improve the standard of living and generate employment. Also the rural

population wont have to migrate to cities to find employment. Such kind of projects are not only financially profitable but also have a social side to them because of which the government has also started showing interest in these projects. Rural BPOs have 40 % higher cost saving than the ones in metros. So the companies are tempted to go to rural India for outsourcing.

As far as this industry is concerned China and Vietnam are soon catching up and giving us a good competition , financially they both are good options than India but our only saviour right now is our friendliness with English. So certain steps need to be taken to make India more financially lucrative than the other Asian nations.

This can be easily achieved by shifting the BPO centres in rural India. Lets say to an American company an Indian BPO worker costs about 10-15k , and after being shifted to a rural place the same guy will cost around 5-7k which is a huge difference. So financially it is very much mouth watering for the foreign companies. The idea is to pick guys from such places and train them optimally. These people get training in basic English and soft skills. The period of training may range from 4 to 6 months depending upon the work to be handled. Most of the employees are 10+2 i.e the minimum educational qualification requires in this industry , some are school dropouts also. Generally projects like data entry, booking, designing, digitisation is taken where voice interaction is minimum

and also connectivity doesn’t acts as an impediment.

From a small village Bagepalli near Bangalore to Madhubani in Bihar a number of BPO centres have started handling projects ranging from data entry for MNCs , online Vat filling project in Gujarat to e- governance initiative of Bihar govt. Also projects involving regional language centres are there, say you are interested in talking in a particular language ( eg Gujrati) your mother tongue so the centre in Bangalore will transfer your call to say Bodeli in Gujarat. In Karnataka the first govt promoted BPO has recently started operations in Srirangapatnam near Mysore. Three other projects are in pipeline in Salgame ( Hassan) , Shiggaon (haveri) and Gundlupet( Chamrajnagar)

In July 2008 HDFC set up a BPO centre in Tirupati , A.P. through its subsidiary Atlas Documentary Facilitators. It has 550 employees which handle over 22000 applications each day. TATA Group has also established two BPO centres in mithapur district , Gujrat and babrala district, U.P. . The babrala centre acts as a back office logistic support for Tata indicom users in Uttar Pradesh.

PHASES OF RURAL BPOS

PHASE 1

BPO WORK PROVIDER BUSINESS DEVELOPMENT

AND QA REGIONAL BPO CENTER

PHASE 2

BPO WORK PROVIDER BUSINESS DEVELOPMENT

AND QA REGIONAL BPO CENTER

1. KO – KIOSK OWNER2. RBPOer – rural bpos

telecenter

Some of the companies in Rural BPO Industry :

1- CHIDA SOFT

2- ADVENTITY BPO INDIA PVT LIMITED

3- DRISHTEE FOUNDATION

4- RURAL SHORES

5- BYRRAJU FONDATION

6- AZIM PREMJI FOUNDATION

7- SAI SEVA

CHIDA SOFT - It is based in Kizhanur village of Thiruvallur district in Tamilnadu. It undertakes BPO operations for Lason india, Chennai. Lason india is a subsidiary of Lason Inc. , United States which is a $170 million end to end outsourcing company. Lason Inc has presence in healthcare and publishing industries. Chida Soft is run by a female entrepreneur Sharmila, 25.

ADVENTITY BPO INDIA LTD - Founded in 2003 by India’s largest round

of angel funding is now a SUTHERLAND company. It became operational in January 2004 with its first centre in Mumbai. Kumar Subramanian , CEO has over 18 years of experience in BOA, HDFC and IDBI. Currently it has offices in North America, Europe , Asia and middle east.

BYRRAJU FOUNDATION - It was set up in July 2001 in memory of late Byrraju satyanarayan raju, the founder of Satyam group of companies. It has adopted six sigma mode of operation. Areas of work range from health, virtual village services , rural tourism, rehabilitation. It has govt of India as a partner in many of its projects. The foundation is presently working in more than 200 villages in 6 districts of Andhra Pradesh.

RURAL SHORES - It is relatively new to this industry . Rural shores was incorporated in year 2008 and their first centre in Begapalli village near Bangalore became operational in Feb 2009. It has a mission to set up 500 BPO centres nationwide in the next 7 years providing employment to 1,00,000 rural youth.

DRISHTEE FOUNDATION – It is an not for profit organisation that acts as a facilitator between the ICT i.e. the information communication technologies and its users and implementers. Again a woman president – Mamta Mishra ,60.

SAI SEVA – Serve and inspire simple employment for village advancement – that is their motto. Sai Seva BPO was

started by management students of Sri Sathya Sai University in may 2006. The middle and lower level employees in SAI SEVA are people from surrounding villages. It aims to utilize the potential of India’s youth.

CHALLENGES :

1. INFRASTRUCTURE:

IRREGULAR POWER SUPPLY

POOR INTERNET CONNECTIVITY

LACK OF EDUCATIONAL FACILITIES

2. SKILL DEVELOPMENT:

TYPING SPEED AND ACCURACY

ENGLISH COMPREHENSION

STEEP LEARNING CURVE

3. BUSINESS DEVELOPMENT:

JOB PROCUREMENT

CONCLUSION :

Rural BPO is certainly a new concept , but it has gained a lot of traction now. According to NASSCOM India’s BPO operation would be about $ 25 billion. India is lucrative outsourcing destination , but to be more competitive and cost effective in the global market it has to shift operations to rural india. This

also has a social side to it , so government also seems ebullient , but with certain

challenges how this industry and new concept evolves is worth watching and

waiting.

REFERENCES:

www.wikipedia.org www.drishteefoundation.org

www.icmrindia.org www.adventity.com

www.bpoindia.org www.ruralshores.com

www.bpovoice.com www.byyrajufoundation.org

www.offshoringtimes.com www.saiseva.co.in

www.nasscom.in