Pradeep Nevatia is the managing director of Lason India, a subsidiary of the $167-million BPO firm Lason.
Sharmila works as a business associate of Lason. She implements small, low-skill portions of BPO
contracts that Lason wins from big customers around the globe. Over the last few months, Nevatia and his
team gave her an extraordinary level of support - technical, managerial, and motivational - to help start this
centre. And they are willing to do all it takes to ensure that her centre runs well.
Nevatia is hunting for seven more entrepreneurs like Sharmila to start similar centres in villages. He will
give them as much support as he is giving Sharmila. Nevatia wants to prove that a village BPO model will
work.
Sections of the Indian BPO industry, especially those at the lower end of the value chain, are watching this
experiment with some interest. Today, most BPO companies are caught in a pincer. Global competition
and aggressive customer expectations are pushing down billing rates. On the other hand, attrition and the
growing cost of talent are pushing up costs. Several BPO companies are turning to smaller cities in search
of larger, cheaper and more loyal talent pools. Even higher-end software firms like Cognizant Technology
Solutions are setting up centres in places like Coimbatore. But no one has entered a village yet, nor do
they intend to.
Despite Lason's show of faith in Sharmila and those like her, the notion of rural BPO centres still seems
far-fetched. There are several reasons why such initiatives may not succeed. First, most BPO firms are
more comfortable with large centres with capacities of 1,000 seats and above. Anything smaller is considered
uneconomical. A rural environment just does not provide large enough talent pools to consider such centres.
Second, despite India's progress in telecom, connectivity in rural areas is a big worry. Lason is wiring
Kizhanur to its office through n-Logue Communications, a wireless in local loop rural connectivity, a company
set up by IIT- Madras' TENET group. But it remains to be seen if the model will work on a larger scale.
Third, there is bound to be stiff opposition from international customers on issues including quality, reliability,
infrastructure, delivery, etc.
A few years hence, customers demand a 50 per cent cost reduction and salaries have doubled.
What would be the best course of action for BPO companies including Nevatia?
A. Leave the BPO sector and move into some other profit making enterprise.
B. Move into the rural areas and harness the cost-savings that this area offers.
C. Move into a consolidation phase where joint-ventures and mergers become common.
D. Continue to run the business in the same way and hope for an improvement soon.
E. Reduce your work force and set greater work targets for those employees that remain.