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Monday, 22 September 2014
Rural BPO: The trickle grows
Wednesday, 23 January 2008

As the Indian outsourcing industry looks to expand capacity beyond the likes of Bangalore, Mumbai, NCR, Chennai, Pune and other large cities, they are reaching out to smaller cities and towns in India. But will the spotlight ever turn to the vast rural hinterland of India?

There have been some concrete steps in this direction. Satyam among others successfully pioneered this move three years ago. The company set up GramIT, which today has grown to over 300 employees across Andhra Pradesh villages. Comat (recently acquired by SPI), another frontrunner in this area, has several centers and plans to expand in a big way. A new entrant, Desicrew that set up operations with support from IIT Madras, has 50 employees in villages around Chennai and plans to touch 200 by end of 2008.

The exhibit below provides a list of some of the players in the rural BPO space in India:

Name of BPO

Details

GramIT (Rural BPO program of Satyam)

 

Supported by Satyam Foundation (NGO founded by Satyam) - GramIT employs 300 rural people in three units and is planning to expand. GramIT recently won a project from a UK-based company.

Sai Seva

The firm based in Puttaparthy has over 50 employees and handles image-based data capturing activity, electronic records creation for investment products, loans etc. This rural BPO has a key client in HDFC Bank.

Lason India (Chida Soft)

Lason India provides franchise towards setting up village BPOs. Supported by Lason, Chida Soft is located in Kizhanur village of Tiruvallur District in Tamil Nadu. Employs graduates from the village involved in coding, data entry and auditing legal publishing.

Comat

Runs 2,000 telecentres and ten facilities across rural India. Comat offers transaction processing services for Orbograph of the US and hires graduates in villages around Mysore.

DesiCrew Solutions

Has 10 centers and 60 employees around Chennai. This was set up with assistance from IIT Chennai. DesiCrew started as a pure Data Entry Service provider. But today we are working with services like - Translations, plotting data on maps, lead generation for IT companies amongst others.

Datamation group

Employs about 50 employees in Kuppam (Andhra Pradesh) and in some villages in Uttar Pradesh. Services offered include data entry and data processing.

Source: ValueNotes Research

Most of these BPOs have been set up in the southern states of India, where literacy levels are higher than most in northern states. Better infrastructure, connectivity, and educational standards in the southern villages as well as proximity to BPO hubs like Bangalore, Chennai, Hyderabad have enabled the growth of these rural BPOs.

 

Low Costs

For performing the same level of work, an employee in a village BPO gets INR 2000-3000 ($50-75) compared to the INR 8,000-10,000 ($200-250) in a tier 1 city in India. Infrastructure (read real estate) costs in villages are almost 1/8th – 1/10th of those in established BPO centers, though connectivity may cost more. Compared to the attrition levels of 40-60% across BPOs in major cities, there is minimal attrition rate in any of these village BPOs, as the people are recruited from the same village and the level of commitment is found to be higher. However, there lie significant challenges towards making a success out of these BPOs.

Key Success Factors

While finding willing people is easy, “employability” is not assured, making ‘training’ a huge challenge. Saloni Malhotra, CEO Desicrew however dismisses the idea. “This is a perception. You have to select simple tasks that can be handled by these BPOs. Due to lack of exposure, the employees in a rural BPO may take additional time in getting trained, but it is doable in an acceptable time frame. For a job that takes two weeks training in an established city will take around 3-4 weeks here”. “Some of the challenges include impressing upon the employees the importance of timeliness and quality. If these parameters do not suffer, the clients will be more than willing to pay for the same job”, adds Saloni.

However, apart from training, there are likely to be language and cultural issues, as well as significant infrastructural challenges, especially in terms of broadband connectivity and power. The same processes and systems used in corporate entities may need to be tweaked for small town or rural locations. Like any other initiative, getting it right will be harder than it may appear at first.

Large BPOs can successfully integrate rural BPOs into their current model by identifying the lowest level of process-driven tasks. Chunks of such tasks can be farmed out by providing sufficient training to the rural BPO workers, with quality checks done at the main center. The model can be improved over time for cost-effectiveness and efficiency.

In some cases, rural BPOs have worked for US/UK-based clients; however, the major potential for these BPOs lies in tapping the domestic market. Agrees Saloni, “For domestic work - rural BPOs are the way forward. Lower costs as well as regional language skill sets make them most suitable”. While the rural BPOs may not arrive in a big way in the short term, we believe this potential is tremendous. 

Apart from the potential to save costs and become more competitive, and benefits of a wider talent pool, these efforts could actually show the way to non-polluting employment across the country – thereby fulfilling a major socio-economic need.


 
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