Indian BPO firms should head to hinterlands, says Karnik
SOURCE: Business Standard
DATE: May 20th, 2008
Mohit Soapbox:
I am a big fan of Kiran Karnik the former Nasscom president. He has done a tremendous job in promoting India and the IT industry and in creating a global brand for India across the world. I do dis agree with him on his views on the next areas to grow in for the BPO/IT firms to rural areas. There is a convulted growth pattern in India . The rural or for that matter the Tier II and Tier III cities in India are still lagging behind in all aspects. A heat map we created for a client of ours to showcase the pockets of growth in India ( client confidential! ) brought the stark reality of a divided nation when it come to growth. The urbanization and growth of few centers across India is a stark evidence of opportunity being isolated in pockets. There is a need to move the rural and Tier III cities to maintain if not to close the gap of growth in larger cities. There is a social need to share the opportunity growth across all areas. The question is are the BPO/IT firms the platform to do so ? We have IT/BPO firms moving to global location because they need a global foot print to de risk their clients and provide solutions closer to their client. It is market driven. Firms are not only going to other low cost locations but to high cost locations ( or regular cost location – u choose). Wipro opening in Atlanta, TCS coming to Cincinnati. There is a social need to be met by the IT/BPO players but they are working with global clients whose demand pattern is different. Even after an impressive ten plus history of phenomenal growth and work moving to India – finding right talent, communication is the # 1 issue we hear from our clients when working with offshore locations in India. This is for delivery being done from – urban, cosmopolitan locations where people are more globally aware.
I believe that the move to rural locations or tier III cities should be the same reason the firms move to global locations to be closer to their customers. For domestic BPO firms it is a tremendous opportunity to leverage local talent and they can lead the charge. The same applies to firms in other sectors of growth – retail, real estate, infrastructure. These are all local businesses with global capital inflow and should be the one’s helping the population which feels left behind be part of the growth story.
ARTICLE
Rural India not only offers lower costs, but an abundant pool of highly-motivated talent. The future of India’s BPO sector lies in moving more of its operations to rural India, according to former Nasscom president and member of IDG’s Global Advisory Board Kiran Karnik.
Indian companies have been setting up BPOs in various countries including Sri Lanka, Vietnam, China and Thailand. However, the biggest unexplored market is pretty much here in India. The future destination for the Indian BPO industry is within the country,” he said.
Delivering his keynote address at the first national rural BPO conference organised by Byrraju Foundation, the NGO arm of Satyam Computer Services Limited, in Hyderabad on Friday, Karnik said Indian BPO companies were moving slowly towards rural areas in setting up facilities.
“Going ahead, we see challenges coming up in the form of competition as a result of the success that we have achieved in the IT and BPO industry, coupled with the already existing problems such as lack of talent and related issue of attrition. Clearly, there is a huge untapped talent in smaller towns and the industry should find ways and means to identify this and go where the talent is.”
Stating that the Indian IT and BPO facilities are being set up as world-class ones, he said companies should look at small and cheaper facilities for services like data entry to tide over infrastructure and hiring costs.
“We should think of these rural BPO centres as the ones in Hyderabad or Delhi. Quality and standards have to be the same, and work at the same level of intensity using ‘appropriate’ technology,” he added.
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