Rural BPO : Winning by Going Rural

DQI Bureau
New Update

Companies may differ in accepting the way BPOs are moving toward the rural

arena but none of them denies rural as the next destination for business. For

some, going rural is limited to non-voice operations whereas for others it means

strengthening operations, especially for the domestic business.


While earlier the biggest deterrent in going rural was lack of technological

infrastructure, this is no longer the case. Rising real estate costs and high

attrition are other factors driving the movement. Moreover, the global recession

has added further pressure on companies to reduce their operational cost. Also,

technical problems that existed in rural areas, especially related to radiowaves,

have become almost negligible because of the presence of Internet service

providers in various parts of the country.

The US economy is under recession, and most European companies are also

threatened by this. Keeping all this in mind one has to demonstrate that the

company is not only offering better service but also at lower cost. It is my

belief that all the up-market facilities will move to suburban areas, says

Samir Chopra, president, Business Process Industries Association of India (BPIAI).

The movement to rural India is reinforced by the fact that the big and the

mighty like Genpact and MphasiS are seriously considering moving to tier-2 and

-3 cities. There are a number of other players like Firstsource which has set up

operations for the domestic market in non-metros like Trichy, Kochi, Vijaywada,

Hubli and Indore. Labor cost is also a key benefit for companies moving to rural



The Domestic Angle

While the US recession is forcing companies to give a serious look to the

domestic market; the domestic market is driving the rural BPO revolution. Also,

BPOs in rural areas are only good for domestic market right now since the

majority of youth in tier-3 and lower cities have less international exposure;

though they are picking up gradually.

In the coming one-to-two years time, I feel we will be able to take

international processes as well. So far we had one US university as our client

and we have done data entry work for them, says Karthik Raman of Source for

Change, a BPO at Bagar, which employs only rural women.


As the interaction between BPO companies with rural masses is increasing they

are realizing that the youth in rural India are developing the same kind of

skill-set as youth in the urban parts of the country.

The domestic segment is also largely unorganized and accounts for almost 11%

of the overall market. Most of these are small call centers operating out of

small towns and cities. However, the scenario is all set to change with the

entry of the big and organized players in the domestic market. An indication of

this shift is the merger of domestic BPO business of Spice Televentures and

Spanco Telesystems. The joint venture is believed to be the largest onshore

domestic BPO.

Nature of Processes

Most BPOs prefer to shift their data entry jobs to the rural areas,

initially. They are also being considered for regional language voice



In case of Delhi, I expect companies to move in deeper into the NCR to

places like Manesar and West Uttar Pradesh, from the prime properties they are

in at the moment. Everybody will at least move one step down, says Chopra of

BPIAI. GramIT initially started with data processing but has expanded to

twenty-five operations as of today. When we started three years back, people

thought that it would be limited to data processing but now we are handling

twenty-five processes that include Web research, indexing, analytics, sourcing

and scheduling, bill verifications and many others for very large clients. I

dont see any limit where rural BPOs can go. It is a matter of reach, says

Pierre DSilva, operations head at Gram IT.

There are also some low-end voice based international processes that

companies in tier-2 cities have started getting. We are handling food order

booking process for a client in Canada and are gradually expanding it. We have

hired trainers from other BPOs who train our employees on accent; product

knowledge is given by the client itself, says Ashutosh Soti, president and CEO,

Amartech Convergence. Soti says hes using all kind of latest equipment in his


Low or No Attrition

GramIT is a pioneer in the rural BPO sector established by Byrraju

Foundation in Andhra Pradesh. Pierre DSilva, of GramIT sees negligible

attrition as a benefit for his BPO operating in the rural part of Andhra



GramIT has recently opened its fifth office in Juvapalem district of Andhra

Pradesh. Rest of the GramIT offices are in Hyderabad, Bhimavaram, Amlapuram,

Khazipalem and Juvapalem. Three years ago GramIT had workforce of 60 and to this

date it has more than 550 employees. By the end of this year GramIT expects to

run 10 BPO centers and double the count of its present workforce.

On the technical front rural BPOs are ahead of many BPOs being run in urban

cities. GramIT uses soft phones for its voice processes. DSilva does not sees

even VoIP fit for voice processes in BPOs.

Operational Cost

The major operational costs that BPOs commonly agree to is cost of training

and cost of power. Industry experts feel that infrastructure can be created but

to develop a good human resource one has to invest heavily and repeatedly on

training. In urban centers people get ready English-speaking youth with exposure

to at least basic technologies, but rural companies have to start from the basic

which is a time consuming as well as expensive process.


The basic training is very comprehensive. We have to teach them English,

working on Microsoft office application like MS Word and spreadsheet, and even

typing, says Raman.

Also good trainers dont easily want to move to rural areas. The plethora of

coaching centers is not enough to meet the requirements of rural BPOs. Indira

Gandhi National Open University along with Accenture Service has announced a

Diploma Course for a career in BPO but players in the industry dont see it as

enough to meet the industry requirements.

We are probably among the top three BPOs in the country but we have not seen

any single person or university coming to us to discuss the needs of the

industry. It is very strange. I must suggest that IGNOU and other training

organizations running courses for careers in BPO must interact with the industry

to find out what skill-sets companies are looking for, says Aditya Gupta, CEO,



The other operational cost that adds up is in the form of the power back up

that companies have to manage. It is something that we have learnt to live

with. The daily power cut ranges from four-to-eight hours daily. We have to run

generators which cost us twice as much as the price of electricity, says


But more than the cost of power back-up DSilva feels it is the location cost

in rural areas that cost companies moreas is the case of a rural BPO that can

not have large number of employees, say 2,000 to 3,000, at one center. And hence

has to set-up office at multiple locations.

Prasoon Srivastava