BUSINESS SENSE: A Tata Power BPO at Khopoli in Maharashtra, and (below) HDFC’s venture in Tirupati

Narayana Bhide’s anthurium farm was bringing him good money. But the flower farmer wanted do a good turn for his village, Mundaje — located 75km from Mangalore, with a population of 3,000 people and boasting of one school and a primary health centre. So he started a call centre at Mundaje two months ago.

“The youth of the village are educated but they continue to be small farmers,” says Bhide, who decided to give a technology twist to local life. His business process outsourcing (BPO) company, chips.ework, works out of his 2,000 sqft home, employs 25 people, has two dozen computers, a bandwidth connection and one client — a US-based medical company. “The agent’s job is to fill forms and collate data for the client,” says Bhide.

The employees earn Rs 3,500 a month, sit on plastic, stackable chairs and rush home to milk the cows and sow the paddy when their shift ends. Each employee underwent a 10-day training programme — where they were taught computer skills and what “Windows” and “Apple” also meant.

The nation’s $14 billion BPO industry is going rural. The industry has reached off-the-business-track places such as Asimpur village in Haryana, Chilagaon in Uttar Pradesh, Mallasamudram in Tamil Nadu and Khopoli in Maharashtra. This march into India’s hinterland finds mention in Nasscom’s (National Association of Software and Services Companies) 2011 Strategic Review. “Lower cost of operations and better retention of employees are driving this growth,” says the report.

Amneet Singh, vice-president, global sourcing, Everest Group consultancy, estimates that about 50 BPOs — employing 5,000 people — currently operate out of small towns and villages across the country. “This geographical shift is a new phenomenon. It’s happened in the last three years,” he says.

Last week, software firm Wipro announced that it will set up a BPO in a Tamil Nadu village. Tata Chemicals operates two rural BPOs — in Barbala, UP, and Mithapur, Gujarat. Tata Power employs 230 call agents — all school pass-outs — at its BPO in Khopoli, a village near the company’s Lonawala hydro electric plant.

When Sridevi got her bachelors degree in computer science four years ago, the Tirupati-based graduate was set to pack her bags and shift to a city to work in the software industry. But her father — a retired army soldier — played spoilsport. “My father did not want me to live alone in a city,” recalls Sridevi. There were no IT jobs in her hometown.

Then in 2008, HDFC Bank started a BPO in Tirupati. Sridevi was among the first to join it as a credit card activation agent. The bank started the BPO as part of its corporate social responsibility (CSR) programme. “But we found that it makes good business sense as well,” says A. Rajan, group head, operations, HDFC Bank. “In small towns and rural areas, salary expenses are 25 per cent less per employee. Office space is also cheaper.”

In three years, the number of employees working at the BPO has increased from 110 to 800. The Tirupati call centre has recorded 10 per cent attrition — compared to 40 per cent at the bank’s Mumbai BPO.

For the residents of the temple town, the BPO brought the two symbols of upward mobility — English and computers — into their backyard. “Many women employees started getting marriage proposals when they became call centre agents,” claims Rajan. For others, the BPO brought a back-up income. “After work hours, most of our employees go back to doing family activities like farming, weaving and grazing the cows,” he says.

For an industry whose existence relies on cost-effectiveness, a BPO office in the midst of mustard fields is, clearly, becoming a lucrative business model. “Rising costs in the metros and high levels of attrition are eroding the cost advantage of Indian BPOs. So it’s logical for the price sensitive industry to look for greener pastures,” says Ashwanth G., co-founder, DesiCrew Solutions, a Chennai-based rural BPO firm.

When DesiCrew set up its first BPO in Kaup — a lazy, coastal Karnataka town— in 2007, it had 20 employees and two clients. “We started with trying to figure out how to covert coconut farmers into computer operators,” recalls Ashwanth. The company designed a training programme — called D-TOUCH — which used English movies, karaoke singing and group conversations to familiarise the local population with technology and a new language.

The movie and singing sessions are paying off. DesiCrew now has four offices, 300 employees and 15 clients. “Our clients range from Internet portals, insurance companies to technology start-ups,” says Ashwanth, who believes lower costs are making companies head down the bullock cart track. “Till a few years ago, a rural BPO was just a nice concept. But now it’s seen as a sustainable business model that brings cost benefits to clients,” he explains.

Also, as India’s rural population turns market savvy, it is driving a demand for call centre agents servicing them in their language. Everest Group’s Singh gives the example of the telecom industry. “Today 60 per cent of new mobile phone connections is sold in rural areas. To service this market, call agents need to talk in the regional language,” he explains.

Tata Power’s BPO at Khopoli does just this. It provides Marathi call services to Tata Indicom’s Maharashtra customers. Besides becoming a business asset, the BPO has changed the lives of Khopoli’s residents, says a company spokesperson. “The technology-related job has become a fashion statement in the village,” she says, adding that the company plans to start similar centres in Jharkhand and Gujarat.

Even then, a rural BPO is as unlike an urban BPO as a Tata Nano is different from a BMW, says Ajay Chaturvedi, founder, Harva, a Delhi-based rural call centre enterprise. “Our clients are obviously not the platinum credit card holders. Most rural BPOs do low-end jobs,” he says. The employees — all women —do not speak to clients directly, but work in data collection, data scanning and data management.

There’s plenty of work at the bottom of the BPO social ladder. Chaturvedi, for instance, is in the process of setting up 15 rural call centres across Rajasthan, Haryana, Uttaranchal and UP. “We have 250 women who do back office work for 20 clients,” he says, adding that his two-year-old, women-only BPOs posted a turnover of Rs two crore this year — up from Rs 14 lakh last year. About 80 per cent of Harva’s clients are non-Indian companies, claims Chaturvedi. “Geography is not an issue. Overseas clients are open to outsourcing anywhere, as long as the quality of service is maintained,” he believes.

Sridhar Mitta, however, does not buy the small car-versus-sedan theory. “There is an employable workforce in small town India. They don’t work in the metros because they are either not English-savvy or they just don’t venture out,” says the managing director of NextWealth Entrepreneurs, Bangalore.

The company identified three small towns in Tamil Nadu and Karnataka — which have colleges, bandwidth, power back-up and are connected by rail and road — and set up BPOs which do high- end work. While the company’s Salem centre gives online mathematics tuitions to school students in the US, its Hubli centre works on payroll processing. The company employs 400 people. “As the industry grows, jobs are going out to find people, instead of the other way round,” believes Mitta.

Technology companies are, clearly, headed where India lives — in its villages.