Rural BPOs beat slowdown, stand tall

Here is a transcript of Vishwanath Pilla's comments on CNBC-TV18. Also watch the accompanying video. 

There is a village called Jalli Kakinada in west Godavari district. This is where the first rural BPO was started in Andhra Pradesh three years back by Byrraju foundation on pilot basis. Now this centre employs over 100 associates. With the success of the BPO, Byrraju wants to extend the concept to over 12 villages.

Twenty-six-year-old Srinivas cycles 13 kilometres everyday to the Gram-IT centre in Jalli Kakinada. And it's paying off for this commerce graduate. He is now part of a global workforce that provides round-the-clock back-office services to MNCs.

Srinivas, Associate, Gram-IT Centre, said, "I am working here since the last three years. Before I joined I didn't know English. After joining, I learned the language and honed my communication skills. During the morning, I carry on my kirana business and in the afternoon, I work here. It is very useful to me and my family."

Currently, there are five Gram-IT centres or rural BPOs run by the Byrraju Foundation. They employ 600 graduates, servicing 10 clients which include Satyam, the Tatas and the government of Andhra Pradesh. With a current turnover of Rs 2.5 crore, the Byrraju Foundation plans to expand the concept to over 12 villages and a turnover of Rs 6-7 crore. Nearly 40% of the workforce are women.

Sailaja, Associate, Gram-IT Centre, said, "I am very confident that I also earn some money and also invest in house needs and children education."

Started on pilot basis, the rural BPO centres are now cost effective, with the scalable global delivery model providing specialised, hybrid and voice-based services. The cost of setting up a rural BPO is 80% lower than one in urban centres, while the employ turnover is just 2-3%.

Verghese K Jacob, Chief Integrator, Byrraju Foundation, said, "Getting a client to believe that a rural BPO can do such a high-end job is difficult initially. There was always a look of disbelief on the faces of clients. When we laid out the value proposition and then offered a guarantee that we will offer minimum 25-30% cost advantage and also 20-30% productivity advantage over what they get from city BPOs. To their surprise the delight factor is so high that they got 40-50% value proposition."

But the growth of rural BPOs is hampered by two major roadblocks: lack of power and connectivity. If rural BPOs need to succeed on wider scale, the infrastructure issues in rural areas need to be given top priority.