IT Outsourcing India

Inclusive IT development requires a business model linking rural skill development with commercial outsourcing. Business process outsourcing (BPO) has long been done by English-speaking youngsters out of major cities for global customers. But only a small fraction of Indians have the English and technical skills needed.

Telecom and power are typically unreliable outside big cities. The Byraju Foundation started a rural BPO in Andhra Pradesh to meet Satyam Computers’ simplest needs, but such corporate spoon-feeding is not scalable. The good news is that commercially viable BPOs are coming up in small towns and big villages. This holds great promise provided corporates and state governments do their bit.

RuralShores, a small start up, operates a 160-people centre in a village three hours from Bangalore, and aims to expand this model to 500 village centres with 20-30 people each. Infosys is planning partnerships with similar rural outfits on a revenue-sharing basis. Wages in small towns are half that in metros.

But if wages alone mattered BPOs would long have migrated to Nepal and Bangladesh. In fact skills, infrastructure and reliability are also needed. How can these be provided in rural areas? One answer is improved telecom and broadband penetration, and better rural power. Global BPO requires English language skills, but Indian companies are now outsourcing domestic work, and need to do so in regional languages.

A significant chunk of this work can be done in small towns and large villages. This approach can be scaled up in a big way by creating rural knowledge centres having good infrastructure and skill development. Corporates like Infosys and Genepact should work with state governments to identify and develop rural knowledge centres in areas with broadband. State governments should guarantee quality power, and implement e-governance programmes.

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BANGALORE: Economic meltdown and the US financial crisis have triggered a new trend: while many Western firms are selling off back office operations in India, a clutch of others are rushing in to reap the benefits.

"The global financial crisis has forced many global enterprises to commodities their captives," said Som Mittal, who heads sectoral lobby National Association of Software and Service Companies (Nasscom).

"Many in the financial services sector have now begun selling back office operations," Mittal told IANS.

But he said there’s also a need for outsourcing back office functions. This is luring firms, especially in the tech sector, to set up captives to leverage skills and cost-arbitrage available in India.

"We are seeing new captives being set up by firms that never experienced India. Some of them are discovering the advantage of outsourcing back-office operations through captives or third-party vendors."

Added Wipro vice-president Ramith Sethi: "We will see more back office captives in India due to easier regulatory framework, technology convergence, human capital and cost-arbitrage. Enterprises will also outsource back-office functions to third-party for lowering operational costs."

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