*EMPIRICAL ANALYSIS ON SUSTAINABLE GRASS ROOT DEVELOPMENT
VIA RURAL TECH PARKS
Manoj Vasudevan, Vaibhav Soni
CEO, SourcePilani
[email protected]
Student, Birla Institute of Technology and Science, Pilani
[email protected]
Abstract
The dawn of the new millennium has witnessed the Indian IT/BPO industry boom. With the urban
firms constantly looking for alternatives to cuts costs and battling attrition due to stiff competition, it
presented an opportunity to leverage rural talent and resources thanks to the technological infrastructure
that is connecting the entire country. IT/BPO services can now be delivered from villages via setting up
of rural tech parks that will cater to both training of rural youth and project delivery. The movement of
low skill requirements from cities to rural India will mean extension of the IT/BPO industry landscape
into towns and villages thus enhancing livelihood opportunities for community members and help bring
about a reverse migration trend from cities to villages. This reflects both a business as well as a deep
social case. A detailed study and an empirical analysis was carried out in the township of Pilani,
Rajasthan and adjoining rural areas, in order to identify and scope feasibility factors for setting up a
rural tech park to carry out IT/BPO based business activities in Pilani. This was done in terms of social,
economic and institutional factors like rural dynamics, rural talent pool, rural infrastructure, rural
resources, rural orderliness, government policies etc. In order to evaluate the potentiality and business
feasibility of Pilani location, the data collected was used to create a viability model that tells us how
viable it will be to start up any IT/BPO related business activity in terms of sustainability and
profitability. A composite index score was found using the viability model that suggested Pilani as a
profitable location to set up a rural tech park. This study then led to the setting up of SourcePilani
(www.sourcepilani.com) – a rural BPO set up in Pilani running on a profitable basis.
Keywords: rural tech parks, IT/BPO, Pilani, reverse migration, viability model
INTRODUCTION
1.1 Business Process Outsourcing
World has become a global market and continued development in information technology has further
reduced the international trade barriers. Organizations across the world are competing against each
other for market sharing and improved quality standards. Outsourcing is now considered as a strategic
tool that helps companies concentrate on their core competence and delegate other peripheral activities
to an external agency that specializes in that task. Delegating responsibilities to people who are
specialists or to the region which can do it at a comparative cost advantage is the logic of outsourcing
business.
Future seems to be promising as BPOs are not only providing cost advantage to the clients but also
offering better quality due to their expertise in outsourced jobs and higher economies of scale. India due
1
to its geographical, infrastructural and skilled manpower availability, is gaining reputation as an ideal
outsourcing destination. This has caused profuse proliferation of BPO units in urban areas of India.
1.2 Evolving Business Challenges
Business-process outsourcing contributes substantially to India's revenue and drives 30 per cent of
growth in its IT exports but the BPO sector is severely facing stringent competition not only by other
BPO players in India, but also from BPO units in other countries. Manpower cost and real estate prices
in cities have increased further dropping the profit margins for the urban firms. Though India maintains
a competitive advantage by having better English speaking people but India need to build up to bank
upon and maintain superiority in the worldwide BPO market. Urban BPO players are looking out for
new and innovative methodologies to counter the ever-increasing competitive pressure in the Urban
BPO sector. Rural BPO is the new buzzword, which holds the promise for viable and cost effective
outsourcing business.
1.3 Business process outsourcing in Villages
While there is no dearth of jobs in Indian cities, the picture is just the opposite in Indian villages.
Educated youth have no means of livelihood and either remains unemployed or is forced to migrate to
larger cities leaving their families behind in the hope of finding employment. This is primarily
happening because of the huge digital divide that exists between urban and rural India. Thanks to the
technological infrastructure that is steadily connecting the entire country, we can now take digital
initiatives to the village level. Business processing units can now be set up in villages and small towns
by moving low skill requirements to these units from cities, and hence providing employment to the
deserving village youth. Thus, in this problem of extremes, there is an opportunity to tap into – both on
the social and business front.
1.4 Rural BPO Model
Rural BPOs can carry out BPO services at rural end to add value to the outsourcing business as well as
to the community. In order to beat the competition, industry majors are shifting their base to tier II and
tier III cities. These cities/towns provide substantial gains on infrastructure, transport and real estate
availability. Similarly, on the parallel grounds organizations can extend operational flexibility by
relocating the BPO services to rural locations. The setting up of rural BPOs in villages can result in the
development of rural infrastructure, employment and livelihood opportunities, increase in standard of
living and enhancement of rural economy at the village level. Transfer of BPO units to rural areas make
tremendous business sense and has significant social connotations involved with it.
The wide range of services offered by the BPO industry today vary from clerical back office work to
knowledge services as we move up the value chain or the pyramid. The services that can be delivered
by rural BPOs keeping in mind the limited skill sets are those that primarily concentrate at the bottom
of the services pyramid – ranging from data entry, transcription services, bilingual inbound/outbound
call centre services, document management/scanning and form processing.
1.5 Rural BPO Movement in India:
The concept of a rural BPO has been in the talk for a few years now in India. The possibilities of
shifting low-end jobs to rural locations have already been explored by several organizations by setting
2
up outsourcing units in rural India. Byrraju Foundation, Datahalli and Datamation are three prominent
organizations who have taken initiatives by setting up rural BPO units in different parts of India. These
pioneers had foreseen the business feasibility of rural BPOs and a brief on them is as given below:
a) Byrraju Foundation - Gram IT initiative
Byrraju, a not for profit organization operates in Andhra Pradesh, a state in South India and its rural
BPO initiative is known as Gram IT. Satyam Computers outsourced a part of its back office operations,
through Gram-IT, helping to generate employment opportunities for the rural educated youth.
• Employment capacity: 100 rural youth, 50 each in two shifts. Two rural BPO units with 50 seat
capacity.
• Place of operation: Jallikakinada and Ethakota in Andhra Pradesh (south India).
• Infrastructure: Telecom and power: 512 kbps connectivity with ISDN back up, sufficient
provision for electricity and additional back ups through UPS and power generators.
• Training: Candidates selected for rural BPO services undergo training in computers, spoken
English and soft skills.
• Employee Earning potential: Rs. 3500 to Rs. 4500 per month.
• Business Development and Marketing: Done at headquarter in Hyderabad. Since it is part of
Satyam Computers, whatever low-end contracts are shifted to Gram ITs.
• Client: Satyam Computers Services Ltd.
b) Datamation Foundation - rural BPO program
Datamation rural BPO centers are run on not for profit philosophy in remote parts of Delhi and Uttar
Pradesh. The head office at Delhi co-ordinates with all the BPO locations and provides them jobs which
are executed at rural end.
• E
 mployment capacity: Datamation’s rural BPO units – each has 5 to 6 computers where rural
youth can work.
• Place of operation: East Delhi and villages in UP districts.
• Infrastructure: telecom and power: Dial up internet as well as broadband, electricity back-up and
Solar powered computers at one or two BPOs where electricity supply is very erratic.
• Training: Training includes exposure to the professional work environment, work ethics, quality
standards, quality assurance processes, fundamentals of data conversion & document conversion
business
• Business Development and marketing: Head-office is responsible for business development and
client identification activities, and job execution is done at the rural end ensuring quality.
• Client: Various organizations like banks, educational institutes, exam boards and various
government departments.
c) Datahalli – A JSW CSR program
This is a CSR initiative by JSW Steel Ltd in the village of Toranagallu.
•
•
•
•
Employment capacity: 300 rural women, 100 each in three shifts.
Place of operation: Toranagallu
Infrastructure: telecom and power: Telecom infrastructure in place is borrowed from JSW.
Training: Training is being provided by Lason for the computer operations and other BPO
processes.
3
• Client: Lason Inc, US
1.6
Rural Tech Parks – a viable option?
A Rural tech park is a hub that contains a collection of business process outsourcing units catering to
various low end verticals of the BPO industry. It will be capable of employing up to a 1000 rural people
and it will also contain specific functional hubs that look after training, quality and management of the
organized network of BPO units in the park.
Educated rural mass does not demonstrate any better employability quotient as per the industry
standards therefore rural BPO can start with jobs having low skill requirements. The rural outsourcing
units must start at the same point where the initial outsourcing business industry commenced (data
conversion and other low end jobs). Once the countryside industry evolves, clients would bestow more
faith on the rural BPO capability, additional activities requiring higher skills could also be taken up
then.
Although, the parameters and factors, as per the current scenario, indicate for low-end jobs processing
units only, this study is of the opinion that high-end jobs also can be taken up at a later stage. It is better
to initiate with low-end jobs and as the infrastructure and skill availability improves slowly high-end
jobs can be pursued. Following are some of the reasons why low-end jobs can be a starting point for
rural BPO:
• Easy availability of manpower at rural end for the low-end jobs, which requires low skill-set
• Quantity and quality of highly skilled manpower availability is limited in the villages
• Low manpower cost can help sustain the low end operations easily, though the margins are thin for
low-end jobs
• Low-end jobs are mostly non-critical to outsourcing organizations, thus clients/organizations can
transfer them to rural areas.
• The hardware requirement for low end jobs minimizes the investment cost.
• Training cost will be very low for such jobs.
• Availability of high volume data-entry jobs from Govt. departments, like land-records,
panchayats/block level data, electricity/water bills or records, essential commodities distribution
/employment generation records, etc.; Situated in rural areas provides opportunity for rural BPO
units to offer low cost local solutions.
1.7 Project Overview
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A study on scoping the feasibility parameters of providing low end BPO services through rural tech
parks in terms of social, economic and institutional factors has been done by the authors of the paper.
The study involves literature review, comprehensive primary and secondary research at urban-end and
also at rural-end, analysis on the collected facts and developing viability model for rural tech parks. A
detailed study report covering the study findings and analysis on feasibility with SWOT analysis has
also been presented. The report will help corporate companies to take informative decisions and plan
for piloting such rural tech parks through their CSR programs.
The main research objective of this study constitutes the followings:
•
To scope the feasibility parameters of providing setting up rural tech parks in terms of social,
economic and institutional factors.
2
RESEARCH METHODOLOGY
Owing to the large-scale availability of educated-unemployed rural talent, cheap realty/real estate and
improving telecom infrastructure, rural tech parks present a very strong case. Though these parameters
place a convincing scenario but the absence of adequate faith amongst entrepreneurs to invest in rural
India remains the main concern. This has led rural youth’s large-scale migration to cities for better
opportunities, causing substantial brain-drain in the villages. Result – the villages have not been able to
keep pace with the urban development and continue to remain backward. We have taken up the current
study to understand, analyze and help scoping the feasibility parameters for setting up Rural Tech Park
in terms of social, economic and institutional factors.
2.1 Research Methodology
This Research study needed a detailed study comprising of literature review and comprehensive
primary research on village households and statistics, Skill-set availability at village level, Jobs
suitable, challenges and opportunities for Rural Tech Parks.
Following research methodology was adopted for the above study and to meet the research objectives,
which consisted of ten major stages.
1) Plan the research/survey activities
2) Schedule the survey activities
3) Design Questionnaire(s) for each survey
4) Execution of research/survey activities
(a) Primary Research
- Village level Household Survey
- Panchayat Survey for village statistics
(Questionnaires designed for each survey & Administered on target groups using sampling plan to
collect responses)
5) Survey Data Entry for analysis
6) Summarize the Findings - for setting up rural tech parks
7) Analyze the Research/Survey Data - for feasibility parameters
8) Model Development
(a) Design Business Models for Rural Tech Parks
(b) Identify and finalize the feasibility parameters
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(c) Scope the feasibility parameters
(d) Design the Viability Evaluation Model
9) Apply & Test Check the Model on village-level data
10) Final Report Preparation
2.1.1 Project Plan
For the above study, a strategic plan including detailed project schedule was prepared for timely
deployment of necessary resources to complete the study properly. This includes primary research, data
entry and analysis, model development and scoping the feasibility parameters - for setting up rural tech
parks.
Survey Location:
For Village level comprehensive survey – Pilani Gram Panchayat village (Rajasthan).
2.2 Research/Survey Brief
A brief on the research/survey activities carried out for the project work is as presented below:
2.2.1 Primary Research
The primary research was carried out for the study purpose in following target segments to collect the
desired data and facts through BITS Pilani students who administered the semi-structured
questionnaires (designed) on the following target groups, as per the sampling plan that was defined:
•
Rural households
•
Gram Panchayat
Survey
Village/GP
Household Survey
Target Group
Sample Size
Panchayat office and members 1 Gram Panchayat
Household
belonging
to 500 Households
different income segments
having Computer literate
person
•
The surveys were aimed for necessary data collection from different groups to understand their
perspective and views on rural tech park feasibility and on current status and problems.
About the surveys:
A brief on the above mentioned surveys that were conducted for the project is as follows:1) Rural Households survey
Rural household survey was conducted at Pilani Gram Panchayat village, situated in district Jhunjhunu
of Rajasthan (India).
It is a typical Indian Gram Panchayat in rural Rajasthan.
The survey helped to collect data/information on followings:
• Socio-economic status of the GP
• Economic activity profiles
• Problems faced by general populace
6
•
•
•
•
Attitude and perception about BPO
Willingness of the local educated youth to take upon the BPO activities
Perceived income from such initiative at the village
Availability of skilled educated youth, etc.
Sample size, method and sampling plan:
Sample size of 500 Households was considered at 95% confidence level and 5% confidence interval.
Surveyed households were selected through stratified sampling technique with ample representation
of households from various income segments.
2) Gram Panchayat survey
The survey on Gram Panchayat (GP- primary unit of local self governance) was aimed at understanding
the overall framework of the GP. Survey instrument was subjected to gram pradhan (village head) and
members of various government departments like electricity and telecom, to collect data/information
on:
• IT penetration in the village
• Business & investment climate
• Basic social and physical infrastructure availability for setting up rural tech parks
(Electricity, telecom, schools/institutions, road, transport, etc)
2.3Constraints faced during Survey
1) During field survey period (at Pilani) the Survey Team had to face the following major challenges.
The hurdles faced, to some extent, did contribute in time over-run of our survey period that was
scheduled. Some major constraints/obstacles that were faced have been mentioned below:
• Bad Weather condition.
• Poor Road conditions, broken road/bridge links
• Transportation problem faced to reach distant villages.
• Took time to locate/contact the computer literates for their valuable responses.
2.4 Scope for future work
The outcome of this report is in the form of feasibility parameters, rural tech park business model and
viability evaluation model translating the viability of a rural tech park initiative. Identified feasibility
parameters act as indicators to guide the decision-making in numerous ways. These help in assimilation
of the physical and social knowledge about the location and community, converting them into
absorbable units of information, which could aid decision making process. Parameters also provide an
early indication of business feasibility before anybody can make an investment commitment.
The present study is unique in many ways. This research is the first of its kind pertaining to the
business feasibility of rural tech parks. Fast changing technology, state policy priorities and
international market scenario dictates the modern day business dynamics, this make it essential for us to
state that the present study would be relevant for the short term and at the most for a medium term.
Therefore it is imperative that future studies must keep accommodating new indicators and upgrades
the current list of feasibility parameters.
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3
STUDY AND SURVEY FINDINGS
This chapter contains the outcome of literature reviews and the findings of the surveys carried out. The
findings are based on discussions with people in the BPO industry, an appraisal of research studies on
the BPO sector and the results of a primary survey conducted at Pilani, a gram-panchayat village in
rural Rajasthan. The study also deals with availability of infrastructure at villages and the employability
of rural youth for BPO work. The study has helped to identify the feasibility parameters for scoping,
which is discussed in next chapter.
3.1 Indian Rural Scenario – the survey findings
In order to understand the Indian rural scenario for rural tech park initiatives, a comprehensive village
level survey was taken up at Pilani panchayat-village in Jhunjhunu district of Rajasthan, India. This
study was undertaken to achieve complete understanding of the socio-economic and political
characteristics of the Panchayat as-well-as for rural tech park business viability.
3.2 About Pilani
Pilani is a gram panchayat (GP) of Jhunjhunu District (a district consisting of 288 Panchayats and 8
Blocks) in state Rajasthan and has a population of 26,219. The GP is located at a distance of 54 Km
from the district head-quarter, Jhunjhunu. The map of Jhunjhunu district is shown below:
Fig 1: The Map of Jhunjhunu
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3.3 Learning from Surveys for Rural BPO Feasibility
Based on the analysis of the gathered facts/information, an operational business model for a rural tech
park has been proposed in this paper. The main four inputs for BPO business have been summarized
earlier as; Infrastructure, Manpower, Technology and Investment. The cost of technology
(hardware and communication) is not location sensitive; however the availability of technology could
be important. The extensive research through secondary sources and in-depth surveys helped us to
identify and select key factors which could affect the location suitability for a rural tech park concept.
A computer with software and Internet connectivity is a sufficient and necessary condition to access
and deliver desired services for BPO. But in the context of outsourcing as a business and investment
opportunity that would transform rural economy and its possible contribution to long-term growth and
development; the factors and variables that are relevant for any other sector would be relevant to
outsourcing business in rural India as well.
Hence parameters are viewed on a larger context of maximum contribution to rural community,
livelihood opportunities, rural economy, institutional factors and in general to rural transformation.
After having examined all the possible factors influencing rural tech park feasibility, from the study, the
necessary ones were identified for scoping feasibility for providing BPO services involving rural tech
parks and have been grouped into six broad parameter heads, as mentioned below.
These parameter heads were then allotted a suitable weightage on a total scale of ten. The subparameters/factors under each parameter head, along-with its weights assigned. Though all the
parameter heads are significant, but among them Rural Dynamics, Rural Talent Pool and Rural
Infrastructure are the key drivers and contributors towards business viability for a rural tech park.
Hence more weightages have been assigned to these parameter heads as compared to others.
S.No
1.
2.
3.
4.
5.
6.
Parameters
Rural Dynamics (Wt=2)
Rural youth population
Literacy Rate
Per Capita Income
Rural Talent Pool (Wt=2)
Educational Institute
-Schools/colleges
-Computer Institutes
-Professional/Technical
Institutes
Computer Literates
Graduates/Post Graduates
Unit of Measure
Weightage
Nos.
%
Rs per person
0.8
0.8
0.4
Nos./GP
Nos./GP
Nos./GP
0.2
0.3
0.3
Nos./GP
Nos./GP
0.6
0.4
Rural Infrastructure (Wt=1.8)
9
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
Rural Electrification
Rural telephone connection
Electricity availability hours
Distance from district HQ
Distance from Rail/Airport
% HH
% HH
Hrs/24 Hrs
Km
Km
Rural Telecom Infrastructure (Wt=1.6)
No. of telecom service
Nos.
providers
Broadband Connectivity
Yes/No
Existence of VSAT
Yes/No
Existence of ISDN facility
Yes/No
Rural Orderliness (Wt=1.4)
Law and order situation in
district
Bandh/Strike prone
Natural Disaster
Govt. Policies (Wt=1.2)
ITes sector as thrust area in
state
Incentives and subsidies
specific to ITes sector
Business Savvy govt.
0.6
0.3
0.5
0.2
0.2
0.4
0.6
0.3
0.3
Subjective
0.5
Subjective
Subjective
0.4
0.5
Yes/No
0.4
Yes/No
0.4
Subjective
0.4
Table 1: The feasibility parameters with weights assigned
4 ANALYSES AND MODEL DEVELOPMENT
The primary objective of the present study, as mentioned in the earlier sections, is to identify and scope
the feasibility parameters for setting up rural tech parks to carry out IT/BPO services in terms of social,
economic and institutional factors.
Below, the rural tech park model has been designed to help plan, implement, organize and manage the
required operations involving the organized network of BPO units. Next, the feasibility parameters that
were identified during the survey/research have been scoped and extended further to develop a
‘Viability Evaluation Model’ to gauge feasibility of such a tech park at a rural location. The ‘BPO
Viability Evaluation’ model developed was then applied on Pilani gram panchayat (a rural location in
Rajasthan) to understand its potentiality and viability towards the rural tech park.
4.1 Rural Tech Park Business Model
The business model for the rural tech park has been conceptualized and described below. The business
model will help income generation opportunities for rural educated youth and facilitate socio-economic
development in rural areas, which in turn can help reversing the migration trend towards villages.
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The Model will comprise of (i) Rural BPO Centers networked in an organized manner for rendering
BPO services, (ii) A Quality Hub (iii) A Training Hub (iv) A Management Hub. Each BPO Center,
with state-of-the-art infrastructure setup, will house 15 - 20 BPO employees. The central BPO Quality
will be responsible for quality assurance. The central training hub will be responsible for training of
personnel. The management hub will be responsible for accounting, management and control functions
to provide BPO services, based on networked BPO units.
RURAL TECH PARK
BPO Centre
BPO
Management
HUB
BPO Centre
BPO Quality HUB
Clients
BPO Centre
BPO Training
HUB
Fig 2: The Rural Tech Park Model
Management Hub: the hub for rural BPO operations
This central BPO Management Center, located at the park, will be the hub managing and controlling
the networked entities for rendering rural BPO services.
It will be responsible for defining the process and quality standards, and assigning jobs to BPO
center(s) for its execution based on their operational capabilities, deliver the output to clients, monitor
and control the entire network for productivity and sustainability.
Quality Hub:
The central BPO Quality Center will be responsible for the function of quality control across five BPO
Centers. The BPO Quality center will co-ordinate with the networked units for quality assurance as per
the desired quality standards and timely completion of the jobs distributed.
Training Hub:
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Training is the integral part of the BPO operations and its role becomes even more prominent in the
rural scenario. The BPO Training Center will ascertain the appropriate training module for the
networked entities so that they deliver optimum quality levels.
4.2 Viability Evaluation Model – for scoping and feasibility analysis
The ‘Viability Evaluation Model’ for assessing BPO potentiality through rural tech parks was
developed to scope the business feasibility at any rural location. The model evaluates the rural tech park
business feasibility for any rural location by segmenting the location into four broad viability categories
viz. Unsustainable (not viable without recurring grant support or investment), Sustainable (viable to
some extent with initial grant and may require sporadic investments), Viable (viable with initial
investment or grant support and can sustain its operating costs) and Profitable (good return on shortterm to recover the investments made).
This model when applied on a Gram Panchayat (GP) or a Village evaluates the factors/parameters
under the above heads and sums up to generate a Composite Index Value which determines or decides
the BPO Viability Segmentation of the village or the rural location into - Unsustainable, Sustainable,
Viable or Profitable - for rural tech parks.
The composite Index Value/Score generated by the model determine the location’s viability
categorization as Unsustainable (if the index value is less than 3), Sustainable (if index value is
greater than 3 but less than equal to 5), Viable (if value is greater than 5 but less than equal to 7), and
Profitable (if value is greater than 7).
1
2
3
Unsustainable
4
5
Sustainable
6
7
8
Viable
9
Profitable
10
Each of the feasibility parameters for rural tech parks have been explained and scoped below, in detail,
along-with the method of calculation for arriving at the parameter value/score for the location selected.
4.2.1 Rural Dynamics - total weight assigned = 2/10
Rural dynamics plays a major role as defines the status of rural economy and support available for BPO
initiatives. Hence it has been assigned a maximum weight of 20 per cent. Socio-economic factors like
literacy rate and population help in providing employable manpower for rural tech parks, and economic
factors like per capita income demonstrates the economic potential to support entrepreneurial
initiatives.
(i) Rural Youth Population: It was observed during urban BPO survey that majority of people who
join as workforce in the BPO sector are in the age group of 18 to 35 years, therefore this was
considered as one of the factors propelling business feasibility. Rural Youth Population of a grampanchayat (GP) or any rural location indicates the availability of talent pool that can be developed over
time. A large youth population size means higher chances of large number of employable manpower
for the outsourcing work.
Factor
Weigh
t
Sample Spaces (No. of people)
12
Youth
Population
(in GP)
0.8
< 1000
1000-2999
3000-3999
4000-4999
>5000
0
0.2
0.4
0.6
0.8
Through the survey conducted, it was measured that Pilani houses about 10267 rural youth primarily in
the age group of 18 to 35 years and thus Pilani scored 0.8 on the youth population sub parameter.
(ii) Literacy Rate: Literacy rate is a significant feasibility parameter for rendering BPO services
through rural tech parks. High literacy rate means greater probability of availability educated
manpower, who can be trained and employed.
Literacy level also indicates the sensitiveness and responsiveness of local towards availing education
and adapting to new developments. Some computer literacy is more dependent on the sensitivity of the
villagers’ education.
Factor
Weigh
t
Method of calculation
Literacy (in
GP)
0.8
Literacy percentage * 0.8
Through the survey it was found that the literacy level in Pilani was 69% and thus it scored 0.6 on the
literacy rate.
(iii) Per-capita income: Per-capita income indicates the ability of people to pay for education, health
and other services including training at the rural tech park; thus adds to the business feasibility. A
person who lies in the higher income bracket has higher affordability for education, hence prepares
him/her to contribute more for the rural tech park.
Factor
Weigh
t
Per-capita
income
0.4
Sample Spaces(Rs)
< 3000
0
3000-8000
>8000
0.2
0.4
Through the survey conducted, it was measured that the per capita income in Pilani is Rs 7332 and
hence scores 0.2 on the per capita income on the sub parameter.
4.2.2 Rural Talent Pool - total weight assigned = 2/10
Educational institutions and availability of rural talent pool plays a key role in the manpower supply
dynamics for the rural tech park. As this parameter directly impacts the business feasibility for rural
tech park, hence it has been assigned a maximum weight of 20 per cent.
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Among the sub-parameters for educational institutes, computer and professional institutes have been
assigned more weights than others, as it can supply required skilled manpower for the rural tech park.
(i) Schools/Colleges: More number of schools/colleges in the locality means more educational
opportunities for people every year and hence more people taking up jobs or venture for rural BPO, as
survey revealed that for rural BPO jobs the minimum qualification required is class 12th pass and/or
graduation only. Schooling provides basic educational foundation to students, who can upgrade their
skills on typing proficiency and/or basic computer skills that qualifies them for low-end rural BPO jobs
like data entry, data conversion etc. Thus these institutions also can contribute to manpower supply and
hence to rural tech park feasibility.
Factor
Weigh
t
Schools/colle
ges (in GP)
0.4
Sample Spaces (No. of schools)
0
0
1-10
0.2
>10
0.4
Through the survey it was found that the number of higher secondary schools/colleges in Pilani is 21
and hence scores 0.4 on this sub parameter.
(ii) Computer Training institutes: Presence of computer training institute delivering computer courses
can supply the skilled manpower for rural BPO and hence an important feasibility parameter.
Factor
Weigh
t
Computer
Institutes (in
GP)
0.3
Sample Spaces (No. of institutes)
0
1
2
More than 2
0
0.1
0.2
0.3
Through the survey it was found that the number of computer institutes schools is 2 and hence scores
0.2 on this sub parameter.
(iii) Professional/Technical institutes: Most of the outsourcing units prefer to recruit professional
people, as they represent better trainable workforce as compared to others. Therefore presence of
professional and technical institutes that supply skilled manpower enhances the feasibility of rural BPO
business. Availability of institutes such as ITI, polytechnic would provide educational opportunities to
rural youth for professional development, which would add to the rural talent and skill set availability
for the rural tech park.
Factor
Weigh
t
Professional/
Technical
Institutes (in
0.3
Sample Spaces(No. of institutes)
0
1
2
More than 2
0
0.1
0.2
0.3
14
GP)
Through the survey it was found that the number of professional/technical institutes is 1 and hence
scores 0.1 on this sub parameter.
(iv) Computer literates: The discussion with industry people helped us understand that computer
literates are the most suitable manpower for BPO and ITes services, as BPO services requires certain
level of computer skills. Also the training needs for these literates will be less compared to others.
Availability of such literates in the area adds higher success rate to business feasibility and hence it is
assigned maximum weight (0.6) as compared to other variables under Rural Talent Pool.
Factor
Computer
Literates
Weigh
t
0.6
Sample Spaces (No. of computer literates)
0-499
500-999
1000-1499
>1500
0
0.2
0.4
0.6
Through the survey it was found that the number of computer literates in Pilani is 1987 and hence
scores 0.6 on this sub parameter.
(v) Graduates/Post graduates: Graduates and post-graduates with additional trainings can emerge as
strong intellect base for expansion of rural BPO initiatives, as they can be trained easily for the type of
jobs that rural tech park based BPO units can handle. Hence this factor/variable contributes
significantly and has been assigned a moderate weight (0.4), a shade less than computer literates.
Factor
Weight
Graduates
and Post
graduates
0.4
Sample Spaces (No. of graduates)
0-999
1000-1999
2000-2999
3000-3999
>4000
0
0.1
0.2
0.3
0.4
Through the survey it was found that the number of graduates and post graduates is 4987 and hence
scores 0.4 on this sub parameter.
4.2.3 Rural Infrastructure - total weight assigned = 1.8/10
Rural infrastructure plays a significant role in the development and also towards business initiatives.
The sub-parameters considered under this head are the public utilities, like electricity, basic telecom,
roads, proximity to town and railways etc., which provides basic support to rural BPO initiatives and
helps growth. Better the infrastructure readiness, higher the scope for feasibility on rural BPO initiative.
(i) Electrification: Rural electrification in the gram-panchayat village is measured as percentage
households with electricity connection. Higher percentage of electrified households indicates better
power infrastructure and hence higher chances of rural tech park business viability. Therefore the factor
is assigned a good weight (0.4).
15
Factor
Weigh
t
Rural
Electrification
0.6
Sample Spaces (% HH)
< 30
0
30-60
0.2
60-90
0.4
>90
0.6
Through the survey it was found that the 94% of households in Pilani have electricity connection and
hence scores 0.6 on this sub parameter.
(ii) Telephone connection: Telephone connectivity governs the ability of a site to handle data/voice
transfer. This factor/variable indicates the status of telecom infrastructure at rural location and hence
the factor/variable that impacts rural tech park feasibility factor.
Factor
Weigh
t
Rural
Telephone
connection
0.3
Sample Spaces(%HH)
< 25
25-50
50-75%
>75
0
0.1
0.2
0.3
Through the survey it was found that the 82% of households in Pilani have telephone connections and
hence scores 0.3 on this sub parameter.
(iii) Electricity Hours: The overall electricity availability in the area relation to the sustainability and
feasibility of the rural tech park. Else alternate is required to support operations and hence additional
cost. The BPO units has to run at-least 8 hours (including power back-up) interruptions to make
sizeable revenue, hence the factor/variable carry weight (0.5) amongst all the variables under Rural
Infrastructure.
Facto
r
Electr
icity
hours
Weight
0.5
Sample Spaces(No. of hours of power cut)
No
Electricit
y
0
>6
hrs/day
4-6
hrs/day
2-4
hrs/day
0-2
hrs/day
0
0.1
0.2
0.3
0.4
0.5
It was observed that in Pilani there were frequent power cuts during the day ranging anywhere between
4-6 hours daily. Thus Pilani scores a 0.2 on this sub parameter.
(iv) Distance from District HQ/Town: Urbanization leads to substantial improvement in the
infrastructure. Chances of adequate infrastructural services increases with the proximity to district HQ
16
or town, hence distance of rural tech park location from town is also inversely proportional to the rural
tech park business feasibility.
Factor
Weigh
t
Dist from
district
HQ
0.2
Sample Spaces (km)
Above 100
40-100
Below 40
0
0.1
0.2
Pilani lies at a distance of 54 km from district head quarters Jhunjhunu and hence scores 0.1 on this sub
parameter.
(v) Distance from Railway Station/Airport: Proximity of rural BPO location to railway station or
airport is strategic for training/quality people to reach the location when time demands. As it was
observed that most of the BPO hubs in India are located in the cities which provide round the clock
connectivity, hence it has been also considered as a sub-parameter for feasibility but with less weight
(0.2).
Factor
Weight
0.2
Distance
from
Railway
Station/Airport
Above 300
Sample Spaces(Km)
100-300
0
0.1
<100
0.2
Pilani is approximately 220km away from Jaipur as well as New Delhi which house airports and
railway stations and hence Pilani scores 0.1 on this regard.
4.2.4 Rural Telecom Infrastructure - total weight assigned = 1.6/10
Rural Telecom Infrastructure also plays a major role in the growth and feasibility of a rural tech park
initiative. It helps effective communication link, faster transfer of data/voice and proper co-ordination
between remotely located units. The broadband connectivity with speed determines throughput and
productivity. The sub-parameters considered here are all important and impacts feasibility for rural tech
parks. Hence this head has been assigned a total weight of 16 percent. Amongst its sub-parameters,
broadband connectivity is assigned maximum weight (0.6).
(i) Number of Tele-com Service Providers: Tele-infrastructure strength and business potentiality of a
location is proportional to the number of telecom service providers. Availability of higher number of
service providers ensures business competitiveness amongst them for market share which results in
better services to people and hence business growth. This factor influences the rural tech park
feasibility.
Factor
Weight
Number of
Tele-com
0.2
Sample Spaces
One
0.1
Two
0.2
Three
0.3
>3
0.4
17
Service
Providers
Pilani enjoys the presence of 5 telecom service providers and hence scores 0.4 on this sub parameter.
(ii) Broadband Connectivity: Broadband connection determines speed and seamless flow of data/voice
transfer in the rural tech park. Due to the significance of broadband connectivity in rural tech park
business viability, it has been assigned maximum weight (0.6) under the Rural Telecom Infrastructure
head.
Factor
Weight
Broadband
Connectivity
0.6
Sample Spaces
High speed
connectivity
0.6
Low Speed
Connectivity
0.3
Not Available
0
Pilani has BSNL broadband low speed connectivity and hence scores 0.3 on this sub parameter.
(iii) Existence of VSAT Connection: VSAT helps connectivity link via satellite and is useful for heavy
data (voice and non voice) transfer in the rural tech park. In the absence of reliable connectivity option
in rural areas, VSAT can help to provide last mile connectivity in the rural tech park through wireless.
Since connectivity and speed for data transfer is a must for BPO activities, hence VSAT is also
considered as an option for business viability of the rural tech park; though a good broadband
connectivity is sufficient. Owing to its significance and to remain connected, a moderate weight (0.3) is
assigned for having VSAT connection.
Factor
Existence of
VSAT
Connection
Weight
0.3
Sample Spaces
YES
NO
0.3
0
Pilani does have access to VSAT connectivity and hence scores 0.3 on this sub parameter.
(iv) Existence of ISDN facility: Integrated Services Digital Network (ISDN) is a circuit-switched
telephone network system, designed to allow digital transmission of voice and data over ordinary
telephone copper wires, resulting in better quality and higher speeds; ISDN technology could act as
boon for rural tech parks. Availability of the ISDN facility at the rural end can ensure increased
performance of the communication network. The contribution of ISDN existence at BPO business
location has been ranked equally to the VSAT availability and hence it is assigned similar weight of
0.3.
18
Factor
Existence of
ISDN
facility
Weight
0.3
Sample Spaces
NO
YES
0.3
0
Pilani does have access to ISDN facility and hence scores 0.3 on this sub parameter.
4.2.5 Rural Orderliness - total weight assigned = 1.4/10
Orderliness is defined as the ability of the location for sustained operations and better growth
opportunities rural tech parks; this includes Govt. effectiveness in enforcing law and order, bandhs and
strikes, proneness to recurring natural disasters like floods, droughts etc and also existence of organized
crime gangs etc. Rural BPO services and business feasibility, involving rural tech parks, at any location
can get highly affected by this parameter. Hence Rural Orderliness is considered as an important
parameter influencing rural tech park feasibility, and carries a total weight of 14 percent.
(i) Law & Order Situation in District: Poor governance leads to inefficiency and unhealthy atmosphere
both for business and development for any location. This in turn effects the investment decisions also.
Owing to the impact of law and order on business initiatives and rural tech park feasibility, it has been
considered as one of the governing parameter and is assigned a weight of 0.5.
Factor
Law &
Order
Situation in
District
Weight
0.5
Sample Spaces
Bad
Avg
Good
Excellent
0
0.2
0.4
0.5
Pilani does have a good law & order situation in the district and hence scores a 0.4 on this sub
parameter.
(ii) Bandh/Strike Prone: Proneness to bandh and strike at any location has a negative impact on the
manpower availability, productivity and growth of the rural tech park. Strikes cost the state dearly in
terms of lost business, and unhealthy impact on state economy. Also frequent bandhs and
demonstrations disrupt life and hampers business growth. This factor will also have an influence on
rural tech park feasibility and thus considered here.
Factor
Weight
Bandh/Strike
Prone
0.4
Sample Spaces
Rare Occurrence
0.4
Partially prone
0.2
Highly Prone
0
Jhunjhunu is a politically active district and hence bandhs and strikes occur now and then in Pilani.
Thus Pilani scores a 0.4 on this sub parameter.
19
(iii) Natural Disaster: Recurrent floods and droughts can disrupt human-activities and play havoc with
rural tech park seasonal viability, as it effects timely delivery to clients and hence business relations.
Though it may be for a few weeks/months, but its severity and periodicity will have negative impact on
any business viability and same for rural tech park also. Hence the factor/variable has been considered
here and assigned maximum weight (0.5).
Factor
Weight
Natural
Disaster
0.5
Sample Spaces
Throughout the year
0
3 months in a year
0.2
Rarely
0.5
Natural disasters rarely occur in Pilani and hence it scores a 0.5 on this sub parameter.
4.2.6 Govt. Policies - total weight assigned = 1.2/10
Pro-industry guidelines and state polices help to generate an environment of confidence amongst the
investors and hence investment volume in any sector. An integrated and stable set of policies from the
respective state governments can go a long way in removing all bottlenecks and help business grow for
BPO and ITES industry. Though important, the research found this head as least effectual as others for
rural tech park initiatives, and hence assigned it a total weight of 12 percent only.
(i) ITES sector as Thrust Area in State: A state which promotes the IT enabled sector and has special
sops for the investing companies will certainly have more chances for the better sustenance of IT
industry. Thrust for IT sector leads to the rise of IT based service units which also encourages local
populace to acquire necessary skills for getting employment in them. Also such state and its location
attract clients for business. Presence of this factor influences clients and hence rural tech park initiatives
and its feasibility.
Factor
ITES sector
as
Thrust
Area
in
State
Weight
YES
0.4
0.4
Sample Spaces
NO
0
The Rajasthan government has placed tremendous importance and promote activity in the ITes sector
in the state and hence Pilani thus scores 0.4 on the sub parameter.
(ii) Incentives and subsidies specific to ITES sector: Similarly, incentives and subsidies for setting up
IT based industry as-well-as tax sops, reduced import and export duties etc. lays the foundation for
business growth in any location. Existence of incentives and subsidies will reduce the capital
20
investment and taxes, which can help organizations to take up rural tech park initiatives. The weight
assigned to this factor is same like above, i.e. 0.4.
Factor
Incentives
and
subsidies
specific
to
ITES sector
Weight
Sample Spaces
NO
YES
0.4
0.4
0
The Rajasthan government in its recent initiatives towards setting up am IT hub at capital Jaipur has
decided to extend incentives and subsidies towards setting up of IT based industry and hence Pilani
scores a 0.4 on this front.
(iii) Business Savvy Govt.: The inclination of the Govt. to develop state-wide industry or specialized
industrial areas impacts industrial and overall business growth. This encourages entrepreneurs to come
forward and gives rise to a business environment, which in-turn leads to rapid development of social
and physical infrastructure, encouraging also rural tech park initiatives. The factor is assigned the same
weight (0.4) like others in this parameter head.
Factor
Business
Savvy Govt.
Weight
0.4
Sample Spaces
Not Inclined
Partially Inclined
Highly Inclined
0
0.2
0.4
The Rajasthan government has been a leader in creating opportunities for industries to set up base in the
state and hence Pilani score 0.4 in this regard.
4.3 Viability Evaluation Model on Pilani – results
After summing total score for individual parameters, composite index score found 8.3 on a scale of 10
which spells Pilani as a Profitable location. Hence Pilani is a profitable rural tech park business
location.
S.No
Parameters
1.
2.
3.
Rural Dynamics (Wt=2)
Rural youth population
Literacy Rate
Per Capita Income
4.
Rural Talent Pool (Wt=2)
Educational Institute
Unit of
Measure
Nos.
%
Rs per person
Weightage
Score for
Pilani
0.8
0.8
0.4
Sub-Total
0.8
0.6
0.2
1.6
21
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
-Schools/colleges
-Computer Institutes
-Professional/Technical
Institutes
Computer Literates
Graduates/Post Graduates
Nos./GP
Nos./GP
Nos./GP
0.2
0.3
0.3
0.4
0.2
0.1
Nos./GP
Nos./GP
0.6
0.4
0.6
0.4
Sub-Total
1.7
0.6
0.3
0.5
0.2
0.2
Sub-Total
0.6
0.3
0.2
0.1
0.1
1.3
0.4
0.4
0.6
0.3
0.3
Sub-Total
0.3
0.3
0.3
1.3
Subjective
0.5
0.5
Subjective
Subjective
0.4
0.5
Sub-Total
0.2
0.5
1.2
Yes/No
0.4
0.4
Yes/No
0.4
0.4
Rural Infrastructure (Wt=1.8)
Rural Electrification
% HH
Rural telephone connection
% HH
Electricity availability hours
Hrs/24 Hrs
Distance from district HQ
Km
Distance from Rail/Airport
Km
Rural Telecom Infrastructure (Wt=1.6)
No. of telecom service
Nos.
providers
Broadband Connectivity
Yes/No
Existence of VSAT
Yes/No
Existence of ISDN facility
Yes/No
Rural Orderliness (Wt=1.4)
Law and order situation in
district
Bandh/Strike prone
Natural Disaster
Govt. Policies (Wt=1.2)
ITes sector as thrust area in
state
Incentives and subsidies
specific to ITes sector
Business Savvy govt.
Subjective
0.4
Sub-Total
TOTAL
0.4
1.2
8.3
Table 2: Viability Evaluation Model – An application to Pilani GP
The viability evaluation model that has been mentioned above serves as a guideline for organizations
who wish to commence rural tech park initiative in rural locations. The outcome of viability model in
the form of composite index score helps to measure the feasibility and classify the location as
unsustainable, sustainable, viable or profitable.
Apart from the evaluating the viability for the location, the individual parameters provide a direction
about the prevailing socio-economic and infrastructural readiness for any such initiative. Thus it is
22
necessary that an informed decision should be taken on the feasibility of such initiatives for the
location, based on the strength of individual factors and overall model score.
5.
CONCLUSION
Business Process Outsourcing (BPO) is a large, growing business. India is fast emerging as a preferred
destination for outsourcing. Urban India has exploited opportunities originating from cross-border trade
in a substantial way and has set-up BPO centres in metros and big cities like Mumbai, Bangalore,
Hyderabad, Delhi and Chennai etc.
With urban BPO players looking for alternatives to cut their operations cost to sustain operations and
on other side with the growing numbers of educated/computer literates coming up in rural areas, it
provides opportunities for creating BPO jobs at
rural level as-well-as business opportunities like rural the parks; this can enhance livelihood
opportunities for community members and help reverse the trend of migration to villages.
There are efforts by the state as well as non-governmental sector and private players to improve the
status of social infrastructure at rural end in terms of its quantity and quality. There are several
initiatives to showcase the transforming Indian rural scenario. One of such effort to improve rural
economy was discussed in this report. A rural tech park is not a philanthropic or charity action program
however it provides a win-win situation for rural landscape as well as for the enterprises that will
transfer their business activities to countryside. An operational business model was discussed in this
report for setting up of and running a rural tech park.
The feasibility of any such initiative is governed by various socio-economic and institutional factors
and thus needs to be evaluated. The important feasibility parameters for rendering BPO services
through rural tech parks were identified and grouped under broad parameter heads as – rural dynamics,
rural talent pool, rural infrastructure, rural telecommunication infrastructure, rural orderliness, and
government policies. In order to further scope these feasibility factors and also to evaluate the
potentiality of a rural location for BPO business feasibility, a diagnostic tool ‘Viability Evaluation
Model’ was designed to measure the feasibility of the business by defining the extent of contribution of
each parameter in viability.
The Viability Evaluation Model was tested at Pilani Gram Panchayat as a location for rural tech park
and found that a profitable outsourcing business. For rural tech parks, the safe and logical option would
be to start with low-end jobs having high-volume and low-value addition; jobs like – data capture, data
entry, document management, scanning, etc. Infrastructure and education prerequisite for such low-end
BPO jobs is bare minimum, which could easily be found in villages. Once all the stakeholders, from
both end (host organization and clients) gains confidence, it would be possible to move on to higherend jobs, slowly and gradually.
Pilot Test - SourcePilani – The Reality
The Viability evaluation model done on Pilani led to the setting up of Pilani BPO (also known as
SourcePilani). SourcePilani was established in September 2007 as a 30 seater unit in Pilani with the
support and encouragement from BITS Pilani. Funded by the Goenkas (The Laxmi Organic Industries
Group), this venture is built specifically to tackle the problem of ‘unemployability' at the grass root
23
level. This is a rural BPO initiative that aims to provide high quality, low cost back office services by
focusing on the untapped talent available in rural India.
The venture strives to impact hundreds of lives in rural Rajasthan by providing employment to rural
folks, thus giving them a livelihood and providing them an opportunity to pursue their goals and
interests. The recruited village folk are given process specific training free of cost for some months and
then inducted as full-time employees. Apart from this, everyone who enrolls undergoes a foundational
training that includes basic computer skills, Basic English proficiency with a strong emphasis on soft
skills.
SourcePilani facility – www.sourcepilani.com
SourcePilani is the first rural BPO in the country to be carrying out medical transcription work from a
rural set up and the goal will be to make Pilani a medical transcription hub of sorts in Rajasthan.
Medical transcription is a unique occupation that forms a very critical process in the US heath care
revenue cycle management and this effort is being aimed at integrating rural India into the main stream
knowledge economy of the country.
SourcePilani currently employs 40 people and has an additional 20 people undergoing training. Apart
from medical transcription, its services include repetitive bulk form/transaction processing, data entry,
Back end administrative support, e-publishing, and supply of man power for e-governance and survey
related activities.
The mission is to provide localized employment and help these people upgrade the quality of their
lives. Thus, the rural people are able to hone their skills, enhance their self-confidence, prestige and are
able to pursue their goals/interests in their very own village while supporting their families.
The vision will be to turn this initiative into a rural tech park capable of providing employment
opportunities to a 1000 people and this impact lives in rural India and to develop a sustainable model
for rural transformation by empowerment and creation of value. By reducing the digital divide that
24
exists between urban and rural India today, reverse migration from cities to villages will start taking
place.
The above research coupled with piloting at rural location Pilani has helped to understand the rural
scenario better for initiating such outsourcing services, in order to enhance income generation and
livelihood opportunities for rural community as-well-as to impact the rural economy.
IT’S TIME TO DO – IT’S TIME TO GIVE BACK
Villages are home to 70% of India’s population. Yet, only 26 % of the GDP is generated in the villages.
We once lived in rural India, ate in rural India, and earned in rural India. Rural India was once at the
center of our economy. Over time it was pushed to the edge by the growing industrial and knowledge
economy. It is time for us to bring rural India back to its rightful place at the center. It is time for us to
be a source for change.
REFERENCES
[1] The NASSCOM-McKinsey Study 2005
[2] Diana Farrell, Noshir Kaka, and Sascha Stürze, “Ensuring India's offshoring future”, The McKinsey
Quarterly
[3] 2006 Jhunjhunu consensus report
[4] Web References
www.thehindubusinessline.com/2005/08/11/stories/2005081102311900.htm
www.rediff.com/money/2005/jun/29bpo.htm
www.blonnet.com/2007/08/15/stories/2007081550181400.htm
www.sify.com/finance/fullstory.php?id=14562765
www.offshoringtimes.com/Pages/2007/BPO_news1826.html
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