Business Outsourcing Consulting Services Looking for Debt Investment

Opportunity Snapshot

Investment Opportunity

This proposal is being made to set-up a BPO (Business Process Outsourcing) unit in Ahmedabad. It is envisaged as part of the Income Generation program (doubling the income of the area) undertaken by the project owner in coorperation with private sector partnerships.

Considering that the prime driver for basic BPO services is cost advantage, envisaging a model where rural infrastructure is used and process agents are also drawn from rural youth is one of the most appropriate ways of presenting such a low cost advantage to the customers who are willing to outsource their processes.

Though a rural model for BPO services may look like a non-feasible option as against a typical urban/ city BPO set-up, a number of attempts have been made to set up BPOs in rural areas and most of these attempts have been successful. In India, many BPO units have been set up in rural areas surrounding Chennai & Pondicherry and some customers outsourcing services are, in fact, thriving on such rural model.

There are some good reasons for customers to have rural BPOs attractive from a business standpoint. The main driver is cost as the infrastructure cost (physical space rent al, lease or purchase) and people cost (the highest cost in a BPO) are much lower in rural areas compared to urban situation. Also, with the growth of urban areas, the cost of running BPO in a city is increasing and the cost leverage that was there five years back has considerably reduced. Moreover, the pressures on city infrastructures are creating major roadblocks in expanding the set-up in cities. For example, severe traffic jams have become a norm in Bangalore, the biggest BPO hub in India.

As we look forward, it is envisaged that rural areas are going to become focus of low-end BPO services and the urban BPO services will tend to move up the value chain and over a period of time urban areas will become the focus of high-end BPO services, generally termed as KPO (Knowledge Process Outsourcing).

Considering the above, it is proposed to set-up a BPO unit in Ahmedabad on the basis of a properly designed Project Implementation Plan. This would also provide an early mover advantage as well as form a basis for replication of the model into the same and other rural locations.

As a public-private partnership model, TechnoTrickle, Ahmedabad was approached and they have agreed in principle to take over this unit directly or through any of their associate/group company after 12 months and run it as a business unit wherein the tribal youth will continue to be employed and earn income.

The project is planned to be implemented over a period of 9 to 12 months out of which about 90% of the time will be spent in training and pilot tests.

Competitive Advantage

- Low cost advantage
- Experience in the business

Use of financing

To start up the BPO unit. A typical BPO unit set-up requires the following:

1. Room/office etc.
2. Computer and Server set-up including various types of software.
3. Broadband Connectivity, preferably a leased line.
4. At least one IT technician/engineer for each shift.
5. At least one person with managerial skills (Team Leader) for each shift.
6. Educated workforce young people ready to work in shifts.
7. In most cases, English language skills, at least good reading and writing skills in English language.

Considering Ahmedabad, some of the above facilities are already available and others can be made available. The most important aspects to develop would be the connectivity and local manpower capabilities. Though connectivity can be established with the help of telecom service providers in short time, the capacity building of the manpower is a development process and would take some time. Considering that language skills are also to be developed, a reasonable estimate of 6 months to 9 months should be taken for development of manpower to be ready to work as process agents in the BPO unit.

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