Wednesday, September 28, 2005
Opportunity..or Threat ?
Some 500 km due south-east from Hyderabad is the tiny village of Jallikakinada (population: 3,000). Aquaculture and paddy farming are the principal sources of livelihood in this Andhra village.
Like other villages in the region, Jallikakinada has its share of young men and women who migrate to the cities, typically Hyderabad, looking for jobs. Educated or not, they are often forced to migrate because thanks to technology and mechanization, both aquaculture and farming don't really need more labour.
In the last few months, some of Jallikakinada's youngsters have been staying back to work in a small 50-seater `rural' BPO centre. They've been joined by others who've actually returned from cities like Hyderabad. The tasks they carry out could be termed simple and routine, from `populating' databases and payroll processing to some simple human resource and accounting functions - all real-time.
Your Job Could Go
While the tasks may be simple, the implications of their activities could be significant – note that Jallikakinada's youth are performing functions which were otherwise being carried out by staffers of IT services company Satyam Computer in the city of Hyderabad.
Put simply, these youngsters are doing to Hyderabad and potentially Bangalore and Gurgaon, what these well-known IT& BPO clusters have done to employees of multinational corporations in the United States & Great Britain.
And put a little bluntly, if your job in Mumbai, Delhi, Hyderabad and Bangalore can be categorized as an `outsourcable process', one day very soon, it will be. Rural BPO itself is not new, firms like Lason Technologies are already outsourcing low-value, global contracts onto small towns in Tamil Nadu.
The difference here is that it's all within the country and its gathering momentum. Initial news reports and one international wire agency report (after the inauguration last month) rightly highlighted the rural potential but did not pay much attention to the urban fallout.
We Call It Grammit
Sixty kilometers away from Jallikakinada is the village of Eethakota, Here, in another, recently constructed 50-seater BPO, young graduates or process associates as they are called work two shifts (6 am to 2 pm and on to 10 pm), performing another range of internal processes for Satyam including the filling up of time-sheets for staffers on external projects.
At Satyam Computer's city offices in bustling Hyderabad, chairman B Ramalinga Raju does not want to be drawn into a discussion on job losses. Nevertheless, he's quite excited about the project. His team has even given the exercise a name; GramIT or village IT. Having given it a term, Raju's now converted it into a verb. "It's a bit like getting Bangalored, instead we say GramIT." He pronounces it as Grammit !
What started this off ? Several factors. For the Byrajju Foundation (endowed by Satyam's Raju), these villages are part of a larger village adoption project in the state. But, as the 41-year-old Sharath Choudary, a Bits Pilani man who is running the Foundation's GramIT program, puts it: "There is a social case but let me tell you, there is no social case without a business case. Or else its charity, not development."
Thanks, But Would Prefer 6 Sigma To A Pub
The business case seems crystal clear. For starters, compared to the city, salaries are roughly half here (Rs 2,500 to Rs 4,000 per month). Morever, says Choudary, "The rupee goes further in the village. People here eat at home and walk or cycle to work."
And the clincher seems to be this. Raju says the commitment levels are just `enormous'. "While young people in the city would look to do more interesting things or leisure activities in the evening, in the two villages, they are attending six sigma quality sessions."
Of the combined workforce in both centres, roughly 40% are women, including housewives but no, as Choudary says ruefully, daughters-in-laws. "That might take some time," he admits. But the reverse migration numbers are quite fascinating. Some 10% of the staff working here have actually returned from the cities, a few even giving up industrial jobs.
The selection procedure is stiff but not rigorous. After a basic aptitude cum skill test, the associates are taught basic English skills and use of computer keyboards. Then begins the quality effort. The targeted accuracy level in the beginning is around 90%. Chaudary says the acceptance of the need and desire for quality control came more easily to them then the English language. "I thought it would be the other way round," he says.
And It Could Get Much Bigger
The GramIT organization structure is quasi-corporate. The Foundation has developed a build, own, operate and franchise (BOOF) model. The centres, incorporated under the mutually aided co-operative society act, will remain as franchisees. The Foundation will also manage the processes, market the services, as it is doing now and will ensure that there is a uniform look and feel for the customer.
How big could all of this get ? The Byrraju Foundation wants to go upto 150 centres employing 15,000 people, by December 2006. Extrapolated, it means roughly that many jobs could go or will not be created in the cities.
If picked up in other states by entrepreneurs or similar organizations, the numbers could be far larger. As could be the potential for rural employment. At the `virtual' inauguration of the Jallikakinada facility last month, AP chief minister YS Rajasekhar Reddy called it a great opportunity for educated, unemployed village youth. In the hands of the private sector, words like that could quickly mean something.
Dammit, What Can You Grammit !
The initial success has already caused a look at new functions that could be outsourced; a large organization can have upwards of 200 small processes. Choudary says the Foundation is already talking to a major hospital for digitizing and maintaining its records as also to the State Government of Andhra Pradesh for a major, yet under wraps, project. More will come, he promises. Satyam was just the beginning.
Consulting firm Accenture partner Sudarshan Sampathkumar, who advises Indian companies on `internal' outsourcing says most outsourcing decisions in the country are strategic and not cost driven. This is in sharp contrast to the west where most corporations embarked on outsourcing for cost reasons.
Telecom companies and banks for instance, have driven the creation of call centres.
But the success of efforts like GramIT could make a strong cost case as well, as it is in the case of Satyam Computer. According to Sampathkumar, support services usually constitute 1% of sales in a company. "That's the kind of starting potential you are looking at," he says.
The Byrraju Foundation's Choudary admits the fact that there is a social case to their proposition opens doors but it would not proceed without a business case. "Organisations will demand high quality service level agreements (SLAs). And we have to deliver what you can expect from the best."
Having tasted some success, Satyam's Raju is now on the roll. "Whenever we meet, the first thing I ask my colleagues is; which of your processes have you Gram ITed today ?"
(The Original Article Appeared in Hindustan Times, Bombay, this week)