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IT majors are exploring rural BPOs as alternative

Last updated: 05 December, 2011
Shayan Ghosh, Bangalore, Dec 5, DHNS: 21:49 IST

Business Process Outsourcing (BPO), which began in India with American Express setting up its first back-office centre, was not considered seriously by the career-minded Indians.

Employees working at the RuralShores BPO in Bagepalli, Chickaballapur District.The profession has seldom been considered at par with mainstream IT jobs. However, times have changed, with even premier IT body Nasscom saying that the BPO sector has created around 10 lakh jobs in the country.

But as the sector flourishes, the rising demand for BPO workers has pushed up manpower cost. Hence, to keep cost low, IT big-shots like Wipro, Infosys and Aditya Birla Minacs are now increasingly getting their BPO jobs done in tier-3 and 4 cities.

Companies target educated people in the age group of 21 to 25 years and provide them employment opportunities, close to their homes. The process also helps companies cut costs compared to that in big cities. From these rural BPO centres, companies focus on voice service only and cater to the growing domestic demand.

After planning for 18 months, Infosys has recently started a small BPO venture in Kaup of Udupi district in Karnataka, for which, it has signed a partnership with Desicrew, which will manage the BPO with it.

“Presently, we do not want to invest that much capital and time into such a project and thus have joined hands with Desicrew in the Kaup BPO,” said Infosys BPO Practice Head (Sales and Fulfillment) Rajiv Raghunandan. The partnership model is being applied in Andhra Pradesh where Infosys is working with another company called RuralShores, Raghunandan added.

Wipro opened its first rural BPO at Manjakkudi (Tamil Nadu) in August, this year, where it has plans to employ 120 people and will begin with a 50-seat pilot project for an international client in the retail sector. Wipro plans to expand its rural BPO operations to 500 seats by March 2013, in Tamil Nadu.

“Wipro’s leadership has always been determined to bring opportunity to rural communities through the application of technology, whether that comes from the delivery of a service to that community or, as in this case, giving the community the chance to realise its potential,” Wipro BPO Senior Vice-President & Global Head Manish Dugar had said.

Decreasing the lower limit of employment from 100 to 50 by the Karnataka government has also paved the way to set up small centres in the State. Interestingly, Infosys has gone to the second level by outsourcing its BPO work to another company that can manage the situation at the ground level. These include logistics, infrastructure and recruitment on the part of the partner. “What we do is to certify the process and the rest is taken care of by our partner in the rural BPO project,” explained Raghunandan.

Many graduates, like Deepa Shetty from Thirthahalli in Karnataka, are also feeling lucky to get a decent BPO job. She has now been working at the RuralShores Thirthahalli (Karnataka) for the last 20 months and is much excited about the opportunity she received. RuralShores is also happy from its experience as the attrition rate is very low and quality accuracy is 98 per cent. Apart from being a partner, RuralShores also has independent operations with 10 centres across India.

Plenty of problems

But there are many challenges when BPOs go rural, the foremost among them being availability of electricity and telecom connectivity. “Frequent power cut is a big issue, as we get power for only 6 to 8 hours a day. We need to use diesel generators adding to our costs,” said Ritu George of RuralShores. Another problem faced is that the employees have little BPO skills and a lot of investment and process-related training is required to impart computer skills to them. The learning curve for process training is higher and thus gestation period is higher than in city BPOs, George added.

Harva, another company that is into the business of rural BPO, finds that breaking social mindsets is a huge challenge.

Said Harva Founder and Chairman Ajay Chaturvedi, “Selecting the right location within the villages, getting electricity and telecom connectivity were other issues that Harva faced.”

But Nasscom is bullish on rural BPOs and their ability to create jobs in small towns. “We are also trying to help the government understand the issues and challenges faced by the BPOs in rural areas,” said Nasscom Foundation CEO Rita Soni.

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