The BPO moved under a tree

With urban real estate prices spiralling out of control and off-the-charts attrition rates, India is seeing a new BPO revolution. But this one is in the villages, finds Lhendup G Bhutia

With urban real estate prices spiralling out of control and off-the-charts attrition rates, India is seeing a new BPO revolution. But this one is in the villages, finds Lhendup G Bhutia

Just 100 kilometres from India's IT hub in Bengaluru, fleetingly visible from the vehicle's window on the Bengaluru-Hyderabad highway, is Bagepalli, a panchayat town of 13 villages.

Although located in Karnataka, most of its residents speak Telugu, owing to the region's geographic proximity to southern Andhra Pradesh.

It is bereft of any mineral deposits, semi-arid, with half of the total area unfit for cultivation. Even bore-wells have to be drilled at least 100 metres deep to reach any water at all. And with an average rainfall of 560 mm a year, it's severely drought-prone.

Every five or six years, the region experiences a drought, followed by near-famine conditions. Nothing agrees to grow here, except for Ragi, a coarse variety of paddy, and a few other crops, between the months of June and December.

It is in this hostile rural terrain that India's next BPO (Business Process Outsourcing) revolution is taking place.
Working with diesel generators as back up, desktops, Cat 6 network cabling, firewalls, routers, lockers, ergonomic chairs, CCTV cameras and bio-metric access, are villagers, who would otherwise have worked as farm hands or shopkeepers in small rural grocery stores.

They now are part of RuralShores BPO's taskforce.u00a0
Defying the idea that BPOs are an urban phenomenon, RuralShores is one of many enterprises mushrooming across India's hinterlands, employing villagers to chart what is increasingly being considered the country's next BPO revolution.

The reasons are plentiful. Urban real estate prices are spiralling off the charts, high attrition rates are leading to an increase in salaries, and training and recruitment expenses are also high. In comparison, startup costs in rural areas are low, employee loyalty, high, and salaries, less.

Currently, RuralShores has 10 centres in locations like Bhiloda in Gujarat and Chand in Madhya Pradesh. By March next year, another 10 will spring up in areas as far-flung as Gangtok in Sikkim and Sangrur in Punjab. The company aims to set up a total of 500 BPO centres across rural India.

Unlike urban BPOs housed in fancy buildings, the centre at Bagepalli shares space with a Sai Baba ashram and a primary school. The office has been leased by the trust controlling the ashram. The total staff strength is 103, and they troop in every morning from nearby villages. Some of them walk the distance, while others come cycling or in 'share' autos. Some even walk to the highway and wait for Hyderabad-Bengaluru buses to reach office.

Process Manager Venkat Gopal, an old BPO hand who has worked in companies in Mumbai before joining RuralShores a year ago, manages the office. After work, he sleeps in the ashram.

At the centre, workers handle various non voice-based forms of work. Some answer customer service e-mail messages, process claims for a multinational insurance company, carry out data-related HR work for an Indian multinational, while others even capture data from scanned timecards filled out by US residents for a US firm.
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Soon, if talks with a leading Indian telecom company materialise, it may get a contract for voice-based call centre work in regional languages.

Murali Vullaganti, co-founder and CEO of RuralShores, who previously worked as MD of Xansa India, an outsourcing and technology company, says, "BPOs cannot continue to grow in urban areas. Attrition levels and costs of establishing and maintaining new BPOs are high.

This is an industry whose existence relies on cost effectiveness." The way forward, according the Vullaganti, is setting up shop in rural areas. "There is a large talent pool available there. Not all of it is readily employable, but with training, it can be as good as that in cities."

As Gopal points out, a large chunk of employees in urban BPOs come from small towns. "What we are essentially doing is taking the BPOs to these areas. The company benefits, as do people here."

RuralShores pays anywhere between Rs 3,800 to Rs 4,800 a month, apart from offering incentives like health insurance and provident fund, depending on the kind of work the employee puts in. While the salaries might be far lower in comparison to those in the cities, in these parts, it is a sizeable and secure income. In addition, staffers needn't migrate to cities and can also help their families at the field and at home.

NASSCOM Vice President Sangeeta Gupta says, "When rural BPOs first emerged, they were considered a happy story, but an odd one. No one took them seriously. It is a different story now," she says, adding that in the next few years, a rural BPO revolution is bound to unfold, if it hasn't already. "Clients were apprehensive about the quality of work, but there are plenty of impressive models in place now and the results are there for all to see," she says.

With a population of 9,516, this panchayat town is located in Erode district, Tamil Nadu

According to a survey by NASSCOM, rural BPOs contributed more than US$ 10 million (roughly Rs 44.6 crore) towards IT-BPO revenues in the financial year of 2009-2010. In this period, 5,000 people were employed, a number which is expected to grow by more than 10 times by 2012.

Because voice-based work is still somewhat difficult for rural BPOs, many are experimenting with other services. HarVa SourcePilani, for instance, apart from doing medical transcription work, also offers social media marketing services. It manages accounts for clients on social networks such as Facebook and Twitter, providing regular updates about activities in the company.

DesiCrew, which has five rural centres in Tamil Nadu and one in Karnataka, has undertaken Geographic Information System-based mapping, transcription work, browser testing, content creation for e-learning websites, among other things.

The training process for rural BPOs is far more intensive. Training in computer applications, English language comprehension and grammar, speech and etiquette are now standard practice at most BPO outfits. Still, it may take two to four months before an employee is ready to tackle basic work such as data entry.

Ajay Chaturvedi, chairman of HarVa, which recently acquired SourcePilani, a BPO in Pilani, Rajasthan, says, many villagers don't know how to switch on a computer. Ashwanth G, a founding member of DesiCrew, says, "Training processes are rigorous. At least two months are spent on training them in typing and compiling data, after which they might have to undergo more training depending on what kind of work they will be assigned."

Over the past few years, India's global dominance as a BPO hub has come under pressure from Philippines, Malaysia, China and eastern European countries.

According to Gupta, the emergence of rural BPOs can take on much of that competition. "With rural BPOs taking off, India's can look at becoming a BPO destination that can fulfill all kinds of work. High-end analytical work can be done in cities, and in rural areas, other forms of BPO work can be done."

While there might be much optimism, the key will lie in sustaining the centres and building a strong ecosystem.
Chaturvedi says, "Many companies are jumping onto the bandwagon thinking it will be an easy task. Often, the costs concerning training and running operations in an area with less power and Internet connectivity, offsets the benefits accrued by setting up a rural base."

Apart from medical transcription work, HarVa BPOs also offer social media marketing services for companies. The entrance to the HarVa BPO centre that stands against a green field in Haryana

You have to be in it for the long run and build a strong ecosystem. HarVa, apart from running its BPOs, focuses on skill development, community farming, waste management and helps facilitate microfinance loans for its employees.

Gupta says, much of the rural BPO success stories that we have so far seen are because the top management has experienced hands. "The next big question is what will happen when these BPOs seek to expand. Will the same level of quality be maintained?"

HarVa employs only women across its BPOs. "After we trained them, many men left for work in the cities. While it was initially difficult to convince women in the villages to work for us, seeing that money was coming their way at the end of the month, they soon started joining us. Besides, they were being taught two prized subjects English and Computers."

According to the entrepreneurs, the biggest challenge lies in securing clients, even though the situation is steadily improving. "They would ask, 'Bengaluru can't confirm 24/7 power, how can you?'," says Ashwanth. "Questions range from infrastructure abilities to the quality of workers available. But now, it is improving," he adds.

But they still have to tackle the odd case of absenteeism. Vullaganti says, "Initially, and rarely even now, some employees wouldn't turn up to work for three days at a stretch. After enquiring, we'd learn they were all attending a wedding in the village!"

Your guide to big players going rural
While a majority of BPOs are third-party service providers, many top companies also have rural BPOs. HDFC runs a BPO centre in Tirupati that offers digitisation services, originally, done in-house by around 1,000 employees in Mumbai and Chennai. The BPO centre helps the bank save nearly Rs 60 lakh in labour costs per month, while providing employment to 600 local youths in Tirupati.

Here, the centralised processing unit of HDFC bank at Mumbai and Chennai scans basic documents into image formats and transports them to the Tirupati centre over dedicated and secured leased lines. The images are then used by the BPO to capture all the relevant information required for creating data files, which are then retrieved by the CPU over the same leased lines to complete the processing cycle.

The Tata Group, meanwhile, aims to hire 5,000 employees for rural BPO operations over the next few years, according to a Wall Street Journal report. Called Uday, the BPO centres are an initiative of the community services arm of Tata Chemicals.

Government push
Many state governments are in the mood to support the trend. The Karnataka government in December last year, emboldened by its 'take IT to rural hinterlands' policy, cleared the deck for setting up 16 rural BPO centres in various districts. According to the state plan, 100 such units will be created in the next four years, generating one lakh jobs.

The Tamil Nadu government, last year, unveiled the Rural Business Process Outsourcing policy, adopting an incentive-based approach to encourage establishment of BPOs in rural areas. The new policy, according to the government, is the outcome of the success of existing rural BPO units.