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Wipro and Infosys are planning to start domestic BPO operations in smaller towns and rural areas to offer native language based capabilities and data entry services. Infosys is eyeing partnership with rural service providers, although Wipro offers technology support to some local service providers. The BPO sector has average billing rate for domestic clients, which is somewhere around $3-4 per hour for every employee, while it bills $8-12/hour to international clients. The rural shift may further generate job opportunities at a low costs.

“We are in consultation with few big companies for partnerships in rural areas,” said Murali Vullaganti, CEO of RuralShores, a startup company that gets technical support from Wipro.

According to Amitabh Chaudhry, CEO and MD of Infosys BPO, it makes sense for rural BPOs to look at partnerships as they may not be able to bag large contracts on their own. “The idea is the same as moving jobs from the US to India - to cash in on cheaper talent and office space,” said Chaudhry.

The tie-ups will be based on revenue-sharing between IT majors and locally based rural service providers. “Currently, there are about 10 rural BPO companies that include RuralShores, DesiCrew, Sai BPO and HOV Services. These centers do routine tasks like data entry, processing of utility bills, native-language help desk and e-mail response,” said Avinash Vashistha, CEO of Bangalore-based advisory firm Tholons. However, he feels that there are various limitations, including availability of skilled manpower, broadband connectivity and frequent power cutouts.

Mumbai: In a bid to cut costs without compromising on seat capacity, some of the India’s outsourcing firms have tied up with telecom companies for outsourcing their own communications infrastructure, a model now known as “hosting services”.

Typically, BPOs have to incur a significant cost upfront in procuring technical requirements like automated call distribution system, dialers, dialer license and customer relationship management software to help connect its centre in India to clients across the world. Now, hosting services ease the burden on BPOs in both installation of these technologies, and more importantly, their maintenance.

Telcos, such as Verizon, Qwest and Genesys, are tapping BPOs with these “on-premise” services. According to Shrikant Parab, Director for global BPO operations at CDC Global Services, a U.S.-based company with call centers in Mumbai and Pune, the hosting services model helps a typical call center with 25-100 seats in saving Rs 35-40 lakh.

Raman Roy, who’s Quatrro, a BPO that provides mortgage and legal solutions among others, too, has jumped into the hosting bandwagon and he thinks this new strategy will change the way the BPO industry has been working. With hosting services, BPO players say, all that a call centre will need to go on-stream are switches, routers, headsets and computers.

“If we have to put in place the infrastructure, we will also need to hire those who have experience in operating hardware and call centre software. This will cost us about Rs 10-15 lakh per annum,” said Vikas Gupta, VP operations , Salient Business Solutions, the BPO arm of the Avantha Group.

“The customer pays only a fixed sum of money for the number of seats they contract with us. As the number goes up, the price per seat comes down,” said Yazad Boga, Head of Hosted Contact Center Services of Tata Communications, one of the telcos that offers such solutions to BPOs.

India’s IT outsourcing industry is valued at $47 billion.

Even as Obama’s statements ring concern bells in the IT sector in India, a new IT hub is emerging in the country, Gujarat known better for its diamond industry, is making strong inroads in the IT sector and the state is on a recruitment drive.

While cites like Bangalore, Hyderabad, Pune and Chennai, are known to be IT hubs in the country, Gujarat is now emerging as a strong contender. And despite the slowdown ITeS and BPO players in Gujarat are busy recruiting people, despite the glooming scenario in the sector.

Some of the eminent IT players in Gujarat on a recruitment drive are :

* Azure is recruiting between 900 - 3500 IT professionals by July end.

* Aegis has 200 openings and Etech has 200 openings for recruitment.

And helping push these numbers are their strategy to service tier-2 and tier-3 clients
Nirav Shah, President, Gujarat Electronic and Software Industries Association (GESIA) said, “Over the couple of years, IT players from Gujarat have been able to create a good market goodwill and when it comes to relocating services to cost-effective service providers, players and Ahmedabad and Gujarat are on the priority basis, even when we talk of international space, small and medium players from international space are exploring options of cost-effective solution and services providers, for them also Ahmedabad and Gujarat are the favorable destinations, as compared to Bangalore and other IT destinations.”

Though the companies are on a recruiting spree…. Gujarat does not have a talent pool to match the demand. And this may trigger the companies to hire from other IT hubs…

Gurudutt Medtia, director, Etech, Inc. said, “It is also largely the selection of the process like when we talk of Gujarat, process are largely of legal processing in nature or back office or lead generation, which are recession proof in nature and that is the reason, recession really does not make an impact.”

With Obama s saying Yes to Buffalo and No to Bangalore, ITeS/BPO companies in Gujarat do not fear the curse of shifting outsourcing out of India, as they have domestic process on their kitty and that is one of the reasons, they are heavy on the recruitment, despite of global meltdown.

The abbreviate BPO stands for Business Process Outsourcing. It is the outsourcing of certain types of work like customer servicing, payroll processing, maintaining accounts, etc. Say for instance if a company is in the business of designing Aircraft engines; by delegating the work of payroll process, employee benefits, etc, to a service provider who specializes in that kind of work,the company could concentrate on its main job; that of designing aircraft engines. This would reduce the expenditure for the company as the wages it has to pay for the personnel doing these types of work in their countries will be much higher than what it pays for the outsourcing work. Opportunities for You: Virtually every work process has been computerized with user friendly software and one need not be technically qualified to process a task that is technical in nature. If you can follow a set of instruction and have the ability to learn, companies will hire you. It is this advantage which the BPO industry provides for a non technical graduate or even for someone who is an undergraduate. If you can speak reasonably good English, are willing to learn new skills and adjust to a new working environment then surely you have a place in this industry.

Benefits you can enjoy: Even if you are a novice, you can expect a minimum amount of Rs 8000 per month, plus other benefits like

· Free transport and canteen facilities

· Opportunities to learn new skills

· Company’s sponsorship for higher studies etc.

· Regular increments, performance based incentives and promotions.

As the BPO industry gears up to generate $50 billion export volume this year in India, BPO operators from small town and villages are likely to emerge as potential drivers for this growth.

“With the Business Processing Outsourcing (BPO) industry flourishing across the smaller cities and villages in India, rural BPOs are the next revolution in Indian IT sector to happen”, said Ashank Desai, chairman of Mastek and a NASSCOM member at recent IIM-A confluence. “Over last 15 years we have increased the business size of industry almost 800 times and we have created 2 million jobs in the country directly, and made the way for another 6-8 million indirect jobs”, added he

With some of the forthcoming rural BPOs in Karnataka and Haryana along with the existing ones, the industry is going to impact about eight million people or 40 million families in India

The low cost of operations and considerably lower employee attrition rate are the two key factors that have encouraged many BPO organizations to extend their operations in the small towns and villages. Making the business process more cost-effective for companies, these rural BPOs will reduce the cost for Indian IT companies first and later on globally as well.

The US financial meltdown has finally managed to do what the business process outsourcing (BPO) sector has been trying to do for years on end — reduce the attrition rate of employees by 5-15 percentage points. BPOs that were coping with 30-40 per cent employee turnover are now reporting numbers between 20 per cent and 30 per cent.

Industry insiders as well as sector experts said that companies are unlikely to miss this opportunity to rationalise bloated boom-time salaries. “Companies are aiming to go back to the cost levels of 2005 and 2006. So, we will see an across the board reduction in salaries,” said KPMG Head (people and change advisory) Ganesh Shermon.

Genpact, the largest BPO in the country, reported attrition rate of 26 per cent for the nine months ended September 30, 2008, down from 30 per cent in the same quarter of 2007. 24×7 Customer said the drop in attrition has been 10 percentage points this month. The company’s annualised attrition rate is 38 per cent.

For Satyam BPO, the month-on-month attrition has come down by approximately 15 percentage points. Healthcare BPO Cbay Systems has seen a drop of 10 percentage points in the last few months. And Nasdaq-listed Syntel has seen a 4-5 percentage point drop.

BPOs, on their part, said this had less to do with the economic meltdown and more with the human resources development practices they have put in place. But analysts said that this has happened because of the global economic uncertainty — employees are choosing to stay put on their jobs than risk new ones.

Companies said they had not seen any contraction in the demand for their services and they will keep on hiring people in large numbers. Cbay Systems, for instance, plans to increase its headcount by 10,000 in the next 18 months. “Satyam BPO has not witnessed any diminishing of demand from our existing customers,” added Satyam BPO Global Head (human resources) Naresh Jhangiani.

What is certain is that salaries in the sector will soon get rationalised. “We believe there is an opportunity for salary rationalisation. We are looking at not only the entry level but the middle and senior levels as well. We might see a drop of 5 per cent in salary levels in the coming few months,” said Syntel Global Head (human resources) Srikanth Karra.

“Going ahead, salary increases will be on the basis of productivity. While the fixed salary should remain the same, the variable pay will see changes,” Cbay Systems Chairman and CEO Raman Kumar said. “At the middle- and top-management level, things had gone a bit haywire and this period will bring the required balance.”