BPOs make a beeline for rural India
BPO firms like Xchanging, which acquired Cambridge Solutions, and Hinduja Global Solutions have ventured into semi-urban places like Shimoga in Karnataka and Durgapur in West Bengal. HDFC Bank through a fully-owned arm kicked-off captive operations at Tirupati last year, while Tata Chemicals came up with BackOffice centers at Barala in Uttar Pradesh and Mithapur in Gujarat.
In a possible affirmation of its belief in the rural BPO story, HDFC, the country's largest home finance company, has picked up 26 percent stake in Bangalore-based RuralShores Business Services, a rural BPO firm floated by six technocrats last year. The 'ruralshoring' start-up aims to link up about 500 locations, with a population below 20,000, to the fabled BPO script over the next seven years. This rather small transaction for HDFC was driven straight from its top echolens implying its significance.
Murali Vullaganti, CEO, RuralShores, (a company that introduced rural youth to BPO opportunities and providing employment to them in their own villages) says, "We typically look at setting up 80-100 seater centers in towns with a population of 10,000-15,000 with a cluster of villages around it. The work timings are between 6 am to 10 pm in two shifts with each centre employing 150-200 people. The firm operates two such centers at Bagepalli and Ratnagiri near Vellore in Tamil Nadu where they operate along with the local schools."
Estimates suggest that investments in infrastructure building for a small size rural BPO will be in the range of Rs 40-50 lakh. Technology entrepreneur Sridhar Mitta believes, "A well-scripted business approach is required for rural BPOs to establish a successful model, especially since many of them come with dollops of corporate social responsibility. The real momentum in rural BPO space will happen once large players enter into this space."
The domestic BPO business in India is projected to touch $2 billion this fiscal, reporting nearly a 40 percent jump from $1.6 billion last year, throwing up a substantial opportunity for firms like RuralShores. But Sriram Raghavan of Comat Technologies, a firm focused on offering rural citizens' services, argues that rural BPO carries concerns over employee productivity levels and the scaling up potential of the business itself. "It is far from being a proven business model," he adds.
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