Wipro and Infosys are planning to start domestic BPO operations in smaller towns and rural areas to offer native language based capabilities and data entry services. Infosys is eyeing partnership with rural service providers, although Wipro offers technology support to some local service providers. The BPO sector has average billing rate for domestic clients, which is somewhere around $3-4 per hour for every employee, while it bills $8-12/hour to international clients. The rural shift may further generate job opportunities at a low costs.

“We are in consultation with few big companies for partnerships in rural areas,” said Murali Vullaganti, CEO of RuralShores, a startup company that gets technical support from Wipro.

According to Amitabh Chaudhry, CEO and MD of Infosys BPO, it makes sense for rural BPOs to look at partnerships as they may not be able to bag large contracts on their own. “The idea is the same as moving jobs from the US to India - to cash in on cheaper talent and office space,” said Chaudhry.

The tie-ups will be based on revenue-sharing between IT majors and locally based rural service providers. “Currently, there are about 10 rural BPO companies that include RuralShores, DesiCrew, Sai BPO and HOV Services. These centers do routine tasks like data entry, processing of utility bills, native-language help desk and e-mail response,” said Avinash Vashistha, CEO of Bangalore-based advisory firm Tholons. However, he feels that there are various limitations, including availability of skilled manpower, broadband connectivity and frequent power cutouts.

Contents

Executive Summary  3

     Chida Soft  5

     Lason India  5

     Datamation India Pvt. Ltd.  6

     Satyam Computers Services Limited  6

     Laser Soft Infosystems Ltd.  7

Government Initiatives to Develop Rural Areas  8

     PURA (Providing Urban amenities in Rural Areas)  8

     Bharat Nirman  8

Public-Private Interface to Develop Rural BPOs  9

     i-Community Program:  9

     Byrraju PURA – Bridging the Technological Gap  9

     Bringing Technology to Rural India  11

     Byrraju Foundation – Training Rural India  12

     Azim Premji Foundation  13

     Lason India Establishes IBEX  14

     Microsoft Corporation Establishes Rural Knowledge Centers  14

     Increasing Connectivity in Rural India  15

     Role Played by Private Organizations in Establishing Kiosks:  20

     Rural BPOs – Addressing the Migration Problem  21

Other Initiatives to Develop Rural India  22

     Creating Self Employment in Rural India  22

     Banks Foray into Rural Market  22

     Other Governmental Initiatives for Rural Development  23

     Rajiv Internet Village – Bringing Technology to Villages  23

     Andhra Bank Expands Line of Rural Institutes in India  24

     ICT Develops Village Knowledge Centers  25

BPO Sector in India – An Overview  25

Challenges for BPOs in India  26

     Attrition and Talent Shortage – A Major Problem for the BPO Industry

 26

     Regulatory Environment  29

Conclusion  30

Service Overview  30

     Definition of BPO  30

     Key Elements of BPO  30

     Advantages of Outsourcing  32

     Key Elements for Successful BPO Relations  32

     Historical Perspective  33

Wipro and Infosys are planning to start domestic BPO operations in smaller towns and rural areas to offer native language based capabilities and data entry services. Infosys is eyeing partnership with rural service providers, although Wipro offers technology support to some local service providers. The BPO sector has average billing rate for domestic clients, which is somewhere around $3-4 per hour for every employee, while it bills $8-12/hour to international clients. The rural shift may further generate job opportunities at a low costs.

“We are in consultation with few big companies for partnerships in rural areas,” said Murali Vullaganti, CEO of RuralShores, a startup company that gets technical support from Wipro.

According to Amitabh Chaudhry, CEO and MD of Infosys BPO, it makes sense for rural BPOs to look at partnerships as they may not be able to bag large contracts on their own. “The idea is the same as moving jobs from the US to India - to cash in on cheaper talent and office space,” said Chaudhry.

The tie-ups will be based on revenue-sharing between IT majors and locally based rural service providers. “Currently, there are about 10 rural BPO companies that include RuralShores, DesiCrew, Sai BPO and HOV Services. These centers do routine tasks like data entry, processing of utility bills, native-language help desk and e-mail response,” said Avinash Vashistha, CEO of Bangalore-based

advisory firm Tholons. However, he feels that there are various limitations, including availability of skilled manpower, broadband connectivity and frequent power cutouts.