BPO 4.0 can create the next million jobs in Rural India

Create the next back office boom from start-ups that is focused on rural India

India’s BPO industry did not originate by design but we stumbled upon it by mere chance. We sensed the opportunity and proved that service centres in India to meet international standards for global clients can be a reality.

Initially, there were doubts on whether this concept would work but we demonstrated that it is doable at a scale by leveraging technology and an educated workforce. The results are evident. In a flat world India is justifiably the largest back office service provider to the globe generating five million plus direct and indirect jobs in the last 25 years.

The Indian workforce has proved that they are as competent as their global counterparts if they get the same inputs, training and support. While training people with the processes was a challenge initially, the positive outcome was and continues to be the sheer speed of learning by the workforce and the ability to execute rapidly. We started providing services by people who had never seen or heard of mortgages or insurance policies or credit cards. They only learnt it while training.

A key to this success is that we decoupled complex decision making and its execution by simplifying the process. We first migrated and broke down the data conversion and repeatable rule based process, to ensure that it is delivered by hundreds of people efficiently.

As we gained expertise, we began to take on complex decision making problems and solve them to help impact business in hundreds of global organisations. We built on the experience and the expertise. We created not only the ‘higher’ capability but showed how it could be globally scalable. I think the time is ripe to replicate the model of what we offer to global clients from Indian cities in rural India. This can have a huge impact on the country and the industry. 

This can provide employment to our educated youth and potentially create the next million jobs in rural India and have a positive impact on the local economy 

Distributed BPO centres in rural areas

To leverage this opportunity, we need a mindset and approach that is different from how we built the BPO industry. It is not about replicating the global model of setting up 5,000-seat mega centres in rural India and duplicate the work we do in urban centres. It requires innovation and improvisation of existing processes and a “Made in India” solution that is implemented using technology and innovativeness as a backbone. The new model is to have distributed centres with 50–75 seats in multiple rural locations and a workflow management capability that will be centrally administered managing available resources at potentially hundreds of locations with skill-based routing and decentralised skill development. 

The good thing is that the government has already done the basic ground work.

We now have a fibre optic network throughout the country that reaches small towns, panchayats and villages. I don’t think we have given enough credit to the government for this futuristic thinking for having leveraged this great capability. Yes, the level of education in the rural areas is not the same as that in the cities, but again if you do data conversion or rule set-based processing, you do not need “superior” higher education. A lot of work we do in India was done by school drop outs in more advanced markets. We ended up using graduates in India to offer world-class services as the availability was good and it was still cost effective. There are hundreds of thousands of graduates who are unemployed or under employed who were waiting for jobs. There is a huge latent opportunity in rural India that can be harnessed.

Replicate the Amul model in services

It is potentially a services adaptation to Amul’s distributed milk collection model in Gujarat, which created the milk revolution. Amul’s process allowed innumerable small entrepreneurs to collaborate and create a profitable model for themselves and also for the dairy cooperative as an organisation. An independent local entrepreneur-led “franchisee” model can be potentially developed for rural BPOs, maybe with two or three such franchisee units in a 25–50 km range. Each unit will cater to 75–100 staff who live at a walkable distance. They will be given training at mid-management level. If 60–70 such centres are set up in some of the small cities, then it is a viable, profitable and sustainable model. 

There is, however, a lot of thinking, innovation, experimentation and testing that is needed.

Can we create a workflow and technology for skill-based workflow management that can manage disparate availability for differently skilled and trained workforce at multiple locations? Can we create a business model that allows a transaction-based or utilisation-based compensation that can leverage the workforce? Can we create a training programme that can be handled cost efficiently at a distributed level? Can we create a middle management cadre that can carry the model on its shoulders?
 

To me the distributed centres are 50–70 seat centres where people walk to work in small towns or villages. These people have basic education qualifications and are locally trained using a centrally developed training programme and work on rule based and standardised processes, with the workflow managed using technology. Local middle management manages them. 
 

We have come to a point where the government has set up large IT parks in smaller cities that have attracted little attention from industries. About 80% of such IT parks are sitting idle. Creating mega centres with 80% plus migration of workforce from other locations is very challenging especially when the basic facilities of education, health care, entertainment and security are not developed enough to attract the workforce to migrate. If we cannot have the work force migrate, we have to take the work to them through a distributed methodology. This is because they are trying to force the mainframe model onto smaller towns and cities which is non-existent there. We need an equivalent of a distributated processing model. A 50-seater or 100-seater centre that is skill-based driven is a very different but sustainable model. 
 

Initial proof of concept for the next million rural jobs

The model works. We at Quatrro have initiated some work on it albeit in a small way. Today, we have a hundred plus people in villages that are not connected with good roads, but are doing work for our international customers leveraging the internet and fibre optic network. Yes, it is skill based and we have decoupled the larger process to some skill sets that we have honed at such centres with our Rural BPO partners. The quality of work we get from these places are equivalent and at times superior to the work we get from cities and it is more cost effective and productive. Yes, we need to train them and manage them in the same way it was done 25 years ago when we brought in this process from mature markets like the US and UK. 
 

We see green shoots of what can be a very huge and exciting opportunity. We need to develop this as a concept. 

Raman Roy is Chairman and Managing Director of BPO firm Quatrro