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Rural route

Aug 10 2012, 19:17   |   By Entrepreneur

By Shonali Advani
 
Anjitha P. was never treated at par with her brother and she knew that this was not going to change. While she knew that a better life awaited her in a metro, her parents refused to leave the Karnataka district of Shimoga, a region where career options were few and far between. Getting a job was a lot more than tough in Shimoga. Impossible was more like it, she knew. But she did. In January 2010, Anjitha got employed at RuralShores's first business process outsourcing (BPO) services center in Thirthahalli.

Headquartered in Bengaluru, RuralShores is a social venture headed by Murali Vullaganti that has provided employment opportunities to youth in rural India since May 2008. More importantly, it had improved their overall quality of life by allowing them to stay near families and save money in the bargain.

The call
After spending two decades in the IT and BPO sector, Vullaganti understood the challenges for call center employees, most of whom migrated to urban cities in search of work. In his last role as Managing Director, Xansa India, he was recruiting 300-400 people a month. To meet human resource demands, his recruiting team of 40 went to the hinterlands of Bihar, Andhra Pradesh and Karnataka to source people for their urban centers. "With starting salaries of Rs. 8,000 to Rs. 10,000, neither they nor their families benefited," says Vullaganti, Co-Founder and CEO, RuralShores.

Struck by an epiphany, he realized this offshore concept could move a level down to rural areas. So he quit his safe and booming career in 2006 and for the next two ran a 'proof of concept' center in Puttaparthi. Supporting him was Sujata Raju, an entrepreneur running a 20-seater center. Together, they decided to scale it to 80-100 seats.

They started with a new accounting opening project for HDFC Bank, and got first-hand experience of the challenges therein. The issues were two-fold: limited connectivity and power in the rural regions; and extremely low confidence levels of people.

"Rural folk aren't aware of their inherent talents and think BPO jobs are for the urban, qualified populace," he explains. In addition, the whole journey of transforming them to knowledge professionals took about six to nine months, a significant timeframe for a business where delivery times are key.

National impact
Since inception, Vullaganti's goal was to build an enterprise with national scale and not one-off centers, hence he got five other friends, now promoters, to develop a suitable B-Plan and invest in the venture. "Our long-term goal is to set up 500 centers," he says. It started serious operations in October 2008 with two centers in Bagyapalli, Karnataka and Ratnagiri, Tamil Nadu, chosen strategically near metros to showcase work to potential clients. However, both centers took a year to scale to 100 people each. RuralShores's location criteria is towns with a maximum population of 20,000, so people from villages nearby, within 10 kilometers, can come to work. It now provides employment to 1,200 people pan-India.

Laws of attraction
Marketing the concept of a rural BPO to youth involved reaching out to colleges and local elders. "We train a first batch of 30-40 people, then add more," explains Vullaganti. The early adopters, in turn, refer and bring in others. Early day challenges included initial scepticism, locals were wary of it being yet another government scheme. "Once they get their first check, they are convinced," he quips. Salaries range from Rs. 4,000-Rs. 7,000 for an eight-hour day. "Once you invest in handholding them, their quality of work is much better than urban centers," claims Vullaganti. "There's no distraction; hunger drives them to prove their skills," he adds.

As a result, attrition is also low here at about 10 percent, employees work longer on same processes, therefore it's a longer investment for RuralShores. Interestingly, 50 percent of its workforce comprises women.

"They have influenced the trend of stemming reverse migration to cities, though not on a mass scale yet," notes Ganesh Rengaswamy, Partner at Lok Capital which invested in RuralShores over two rounds.

Scaling without failing
Scaling also meant getting more clients. "It was difficult for corporates to understand how it works, just like 20 years ago companies in US weren't sure if BPOs would work in India, especially when it comes to confidentiality of data and quality of execution," Vullaganti reasons. To his constant surprise, too, the rural workforce outdid themselves proving they could do more than data entry work and take on complex processes, including voice-based tasks. Its Madhya Pradesh center services all Airtel's customers there by providing telephonic customer care support on the back of 200 call center staff.

Vullaganti tapped his professional network to get the initial set of clients. Now his venture's gained enough traction to attract clients from varied fields. Contrary to the founder's apprehensions, mid-level employees (with experience and domain knowledge) were happy to come and work here, to be near families. "We pay market salaries and rural BPOs provide faster growth opportunities for them," he states.

Success points
Effectiveness in the model reflects in cost-saving for its clients. On average, outsourcing to RuralShores is 40-50 percent cheaper than outsourcing it to urban centers. "We have large BPOs outsourcing their work," he says.

Typically, each center handles three-four clients and generates revenues either by monthly charges, per transaction or activity. "RuralShores needs to keep increasing its set of refined solutions, develop domain knowledge and tap more MNCs, BPOs and solutions-oriented firms," suggests Rengaswamy on the customer acquisition front.

Balancing its social objective with profitability needed focused thought. "Initially we had a challenge in attracting talent as they equated us with NGOs," recalls Vullaganti. So he focused on the commercial aspect of RuralShores and the value it brings. "Selling the social side is counterproductive." Plus there were fewer options to raise funds.

By year end, RuralShores will have 20 centers and its long-term expansion plans include employing 1 lakh rural youth. Rengaswamy foresees deploying world-class infrastructure and connectivity as they grow beyond 30 centers as significant challenges.

"It might be hard to find good locations," he concludes. But Vullaganti is optimistic and believes he will cross the hurdles as and when he faces them.


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