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Kripa Raman

The business process outsourcing opportunity must spread to smaller cities and towns. Only this can keep India in the lead.

THERE has been a lot of talk in the Indian business process outsourcing (BPO) industry that the ultimate explosion of this activity will happen when it moves in a big way to the smaller towns and cities of the country.

Currently, BPO businesses are largely clustered around Bangalore, Mumbai and the metropolitan area of Delhi (Gurgaon). "Moving into smaller towns will give India a very big advantage — not just domestic, but also international," says an industry analyst.

With the real estate costs in metros being very high, call centres would be much less expensive to set up in the smaller towns. Employee wages would be lower as well. To add to that, employee retention, a big issue with call centres, would also be a much easier task in the smaller towns. Dropping back call centre employees at night would not be such a time-consuming task in the smaller cities whose furthest suburbs would not be too far away from the centre of the city.

Although companies have started hiring employees from the smaller towns and cities — the metro supply having almost run out — a larger scale moving of the call centres themselves to the smaller cities has not yet happened. Some call centres are known to be coming up in places such Madurai and Vishakapatnam but it is more common for the business associates (BAs) to be located in the smaller cities. BAs do some basic work such as data entry and preparation, for BPOs.

According to analysts, the move to smaller towns and cities could extend India's cost advantage that many feel could easily be threatened any time by competing call centres in the Philippines or China.

Hurdles in the way

The move to smaller cities is easier said than done. For, though optic fibre now connects many a city and town with the rest of the country, with bandwidth increasingly getting cheaper, there are other non-telecom problems.

One of them is electricity supply. "There is no ensured uninterrupted supply of electricity," says the head of a call centre training facility in Mumbai.

"Really, why blame the smaller towns and cities. Even in Bangalore and Delhi, IT companies have to provide for their own power needs, through generators. But there is a limit to how much of the basic infrastructure companies are prepared to put up themselves."

The other impediment is roads and transport. But this could be a chicken-and-egg situation. Somehow, when a large and fancy employer sets up base in a city, infrastructure does improve, he points out.

One of the other unlikely barriers to setting up base in a smaller city or town is the uncertainty of being able to get sufficient women employees to work on the night shifts. "There are many States that prohibit the employment of women during the night, after 8 p.m. or so," says the head of the call centre training company. And ironically, many of the West-based call centre clients want women to attend to service calls.

In the larger cities, the general pace and lifestyle make it possible for this prohibition to be overlooked.

Maharashtra, for instance, still has this rule prohibiting women from working into all hours of the night. But so many women in Mumbai work late that there is no way this can be implemented, points out a call centre executive. "But in the smaller cities, society is different.

A small adverse episode could lead to a public outcry and misunderstanding and the digging up of regulations. We must test the waters before we enter," he says.

Otherwise, he says, there are cities and cities that can be explored. Places such as Nagpur, Lucknow, Allahabad or Varanasi, the larger cities of Kerala, Punjab, Tamil Nadu, Karnataka, the north-eastern States — there are prosperous centres that generate sizeable streams of English-educated youth.

Once this happens, he says, India will see a kind of more-uniformly-spread opportunity experience.

Picture by Bijoy Ghosh

kripram@thehindu.co.in

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