IMPACT OF OPERATION OF BUSINESS PROCESS OUTSOURCING SERVICES

(BPOs) IN RURAL AREAS

* Dr.S.Joseph Xavier, Associate Professor in Commerce, St.Joseph’s College (Autonomous), Tiruchirappalli – 2
* Prof.V.Bastin Jerome, Assistant Professor in Commerce, St.Joseph’s College (Autonomous), Tiruchirappalli- 2

Introduction
Outsourcing has been the buzzword in the context of Indian business and a
considerable amount of work is happening in the domains of voice and non-voice BPO.
Further, growth is very possible if the industry were to consolidate on the current
offerings to achieve scalability and also look at new opportunities. India has many
potential advantages to meet global and intellectual market.

BPOs Concentrate rural India

The basic idea for establishment of BPOs in the rural area is to provide new job
opportunities in the villages, and to help bridge the gap between India's urban and its
poor rural people. Also, if rural educated finds jobs close or next to their home, they'll be
less likely to migrate to the country's overcrowded cities. The BPOs Industry feels there
are plenty of young people in the villages with college degrees. The flourishing BPO
industry of India is now eyeing villages across the country as its next destination for
launching their services and access manpower. One of the other main reasons why
companies are considering rural India to outsource is because of the cost factor; the
infrastructure cost are low as it cost 20 percent cheaper compare to urban outsourcing.

The report estimates….

• The rural jobseekers are more compare to urban centers. Besides a rural employee
takes home a fair share of his earning per month against their urban counterpart,
which is double. Also it is noted that when BPO industry sets up it facilities, with
it comes other types of jobs- like restaurants, housekeeping, travel industry all this
in a way to serve the workers which otherwise serves the local economy.
• Today BPO centres have already set-up their facilities in rural areas and villages,
and more are waiting to start. It is estimated that around 250 people will get
employed in this units. Presently rural employees are doing back office work for
the foundation, Satyam, and the government of Andhra Pradesh
• Byrraju Foundation's is a non-profit organization under GramIT aimed at setting
up more than 50 units of BPO operation in the villages. Byrraju has adopted 160
villages and GramIT is looking to have operations running in all this villages.
They hope to line up more government agencies and Indian corporations, and,
eventually, to land some multinational corporations as customers. But industry
experts feel that rural growth has been at much slower pace compare to urban.
• News Today reports a unique venture in the BPO industry: the setting up of a
BPO centre in rural India. Lason India Ltd., a BPO organization, initiated a rural
BPO centre at in Kizhanur, Thiruvallur district, in Tamil Nadu.
http://www.bpo.firm.in/bpo/lason-india-ltd-takes-bpo-to-rural-india/
Arena of Indian BPOs
• Indian BPO industry is expected to grow by 20 percent in the near future. The
Indian ITES/BPO sector is growing at a compounded annual growth rate of about
60 per cent according to Sandeep Madan, president of Hero ITeS.
• "Transaction processing can grow to become double the size of call centres.
Gujarat needs to attract some big players in the BPO sector to set up base here and
more would follow automatically according to Rajiv Prakash, associate director of
Business Advisory Services at KPMG.
• "The state government needs to set up a marketing infrastructure in association
with the local IT players to attract companies from the US and UK
• "The global outsourcing market is expected to grow to $173 billion by 2007 from
$122 billion in 2003. So, the potential for Indian companies is huge".
• Desicrew’s Solution is unique BPO initiative that provides high volume data
services at an affordable cost from rural areas across India. Desicrew’s central
team based in Chennai manages training of rural workforce, distribution and
monitoring of work, quality control and client interaction. It builds capacity in
villages, creates the right systems and networks for remote operations and ensures
highest level of professionalism and quality standards.

The country’s first rural BPO

• In HOSUR Over 30 young employees of a business process outsourcing unit in
the Chanachandiram village near here have proved that a backward such as
Krishnagiri district can be turned into an employment generating centre. The good
news for non-graduates is that their entry-level salary is on a par with that of
graduates. Those who have passed only X standard and Plus-Two are trained in
basic computer, English grammar, accent and communication and soft skills for
personality development. (Source: The Hindu Online edition of India's National
Newspaper, Monday, Dec 03, 2007)
• According to a recent report by the Organisation for Economic Cooperation and
Development (OECD), India has generated 11.3 million new jobs annually
between 2000 and 2005. Though a majority of these were in the BPO industry,
NASSCOM estimates that by 2012, the BPO industry alone will face a shortfall of
262,000 professionals. NASSCOM is India's premium body for policy and
regulation in the BPO industry.
• NASSCOM report states that there are 130 million surplus workers in rural India.
Even if 5% of these are educated, there is an opportunity for the BPO industry to
expand operations. With some IT training, there is a significant opportunity for
the large number of high-school graduates and undergraduate degree-holders in
rural areas to fill a part of this gap in the future.
• If the Government of India's goal of setting up 100,000 Common Service Centres
were achieved, all of these villages would have the potential to act as BPO
centers. Consider 10% of these villages employing 20 people at an average salary
of $65 per month. This would directly add $1.56 billion to the rural economy per
annum and create 200,000 jobs. The demand for several allied industries such as
hardware servicing and software development would also grow.
Reasons for setting up BPOs in the rural areas
• The cost of operating is 50 per cent less in the rural centres compared to the urban
BPOs. Moreover, productivity of the rural work force is higher than their urban
counterparts, Satyam Computer Services Head, Gram IT and HighEnd Services
Ravi Kumar Meduri told PTI.
• The cost involved in setting up of a BPO centre in rural areas is low compared to
that in urban areas due to two factors infrastructure and hiring costs.
• Satyam has already built three centres in villages of Andhra Pradesh and is
planning to open another 10 in the country by the end of 2008.
• It is the fortune for the BPOs companies to pay less salary than compared to
BPOs situated in major cities.
• BPOs can withdraw the expenses spend on safety welfare measures provided to
their employees.

Favouring rural BPOs establishment

• There is no point in making the rural candidates to come to the city fir their
livelihood. Companies can achieve higher productivity by opening their shops in
towns and villages and thus making employees feel at home.
• Nasscom’s Strategic Review Report 2005 estimated that the Indian offshore IT
and BPO industry would employ around 695,000 people and produce revenues of
approximately $17.3 billion in the financial year 2004-05. By 2007-08, Nasscom
estimates that this figure will increase to over 1,450,000 people and 7 per cent of
India’s GDP.
• Satyam, Lason and Datamation have already set up their business process
outsourcing centres in remote places such as Ethakota and Jalli Kakinada in
Andhra Pradesh. http://www.offshoringtimes.com/Pages/2007/BPO_news1826.html
• Satyam, on the other hand, said there is a large amount of domestic work
available in rural areas with respect to digitisation of hospital and administration,
as a result there is a huge pool of work that requires low-cost solutions. However,
a great deal of training is required to enable individuals in rural areas to perform
efficiently in a BPO.
• Hyderabad, Jan 16 About 1,000 rural graduates from Andhra Pradesh will soon
join different Business Process Outsourcing (BPO) companies in their offices to
be located in tier-II and semi-urban areas. The Employment Generation and
Marketing Mission (EGMM) of the Government of Andhra Pradesh has almost
finalised the deal with “some large BPO companies” in this regard and the
placement process would commence from March, Ms Meera Shenoy, Executive
Director, EGMM www.thehindubusinessline.com/2008/01/17/stories/2008011752892300.htm

Impact of Establishment of BPOs in rural areas

• No one is ready to outsource it to the rural or No one is ready to start their
operations in the rural area.
• Recent study of working conditions in Indian outsourced call centres has pointed
to the high levels of labour exploitation in the industry—including constant
surveillance, long hours, health problems and burnouts.
 • A number of states in India have exempted outsourcing companies from the
Industrial Disputes Act, which provides, amongst other things, for unfair
dismissal rights. West Bengal, headed by a Communist Party of India (Marxist)-
led Left Front government, has stretched the work week (the number of hours
after which companies are legally required to pay overtime) from 40 to 48 hours,
and has changed labour laws to allow young women working at BPOs to do night
shifts.
• The report concludes that “most of these youngsters are in fact burning out their
formative years as ‘cyber coolies’.”
• Staff in the industry reported health problems such as nervousness, chronic
fatigue, body ache, insomnia, nausea, anxiety, restlessness, irritability and
depression due to odd working hours and stress. Sick days are difficult to obtain.
Surely the BPOs companies established in rural areas will keep silent with regard
to above measures.
• The main problem faced by the BPOs employees estimated that “90 per cent of
the respondents did not balance work and family life. The respondents had no
social life or interaction with people in the family.” As a result it may hit the
village set-up also.
• The majority of the population is already hostile to the program of privatisation
and opening up India as a cheap labour platform for transnational capital. Again
it may degrade or indirectly exploit the educated villagers.
• BPOs established in the major impediment seems to be poor infrastructure, lack
of basic amenities and low skilled work force.
• The performance of employees is often linked directly to quality work, customer
satisfaction, increased product sales and even to the image of a company.
Whereas the same is often indirectly linked to, satisfied colleagues and reporting
staff, effective succession planning and deeply embedded organisational
knowledge and learning. www.offshoringtimes.com/Pages/2006/Article_1261.html
• This might be worse for BPO companies where fresh talent is intensively trained
and inducted and then further groomed to the successive stages. In this scenario,
the loss of a middle manager can often prove dear.
• However, there are some common reasons that especially cause people to leave.
Surveys have listed night shifts, money, inability to handle various types of
stress, monotonous work; company policies, lack of career growth, problems with
those in senior positions etc., as some of the most common reasons listed by BPO
employees, as reasons for quitting jobs.

Conclusion
The establishments of BPO services at the rural areas are very much significant in
the promotion of rural employment. But the BPOs may still exploit the rural poor people
with regard to salary, welfare and safety measures and additional benefits. Most of the
BPOs/ ITES companies situated or established in cities are bound to involve in salary
hike and fail to nurture their employee’s to consider their welfare physically and
emotionally. We should take-up a better strategy to safeguard the villagers from the
giants of BPOs companies.
References:
1. Dr.S.Joseph Xavier and V.Bastin Jerome, “Software Business in India:
Challenges and Opportunities”, Third Concept, April 2006, Vol.20, No.230, Pp
31 – 34.
2. V.Bastin Jerome,“Business Process Outsourcing: The key of Heaven to
Developing Countries like India”, RETELL, April 2006, Vol.6, No.2, Pp15– 22.
3. www.outlookindia.com/pti_print.asp?id=421269)
4. www.thehindu.com,THE HINDU,India's National Newspaper, Tue, Jun 17, 2008.