First rural MNC BPO to come up in BSY hometown Shimoga

The opening of the Shimoga unit by the London Stock Exchange listed Xchanging is seen as part of the British company’s attempts to utilise the cost benefits that accrue to the BPO business by locating away from top cities and towns where overheads tend to cut into the cost arbitrage benefits of BPOs.

Rural BPOs,though widely regarded as a logical next step in the BPO business in India,have not taken off despite the rising cost of employment and overheads in tier I and II centres. Experts have blamed the lack of an effectively trained,skilled workforce in places other than the major metros as a key cause for the slow expansion of BPOs into rural parts.

“One of our key aims for 2010 will be to leverage the arbitrage opportunities available through attractive incentives in the tier III and IV locations in India,” Xchanging reported in its 2009 annual report. “We are looking to expand our operations in India by moving work to cities that offer lower costs,such as Shimoga,” Xchanging,which has customers in 42 countries,reported last year.

While Indian BPO ventures like Rural Shores have attempted to do simple business process outsourcing work using the available rural work force,especially women,the big BPO players are still taking baby steps into the hinterlands.

“Rural BPO is a new development as far as Infosys is concerned. The first project kicked off with the Andhra Pradesh government a couple of months ago so it is still very early days — a pilot stage in fact,” Infosys BPO’s CEO and MD Swami Swaminathan said recently.