Entreprenership Development Project

By:

Shabir Muzafar Bhat MBA 4th Semester School of Business Studies

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SETTING UP A RURAL BPO IN KASHMIR

ENTREPRENURSHIP DEVELOPMENT PROJECT

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Objective of the GAAMZAN

Identifying feasibility parameters in implementation, management

of rural BPO.
Documenting the processes and start-up plan for rural BPO. Understanding the type of rural BPO activities. Creating job opportunities for rural educated youths.

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CONTENTS
INTRODUCTION RESEARCH METHODOLOGY LIMITATIONS DATA ANALYSIS & FINDINGS RECOMMENDATIONS CONCLUSIONS BIBILOGRAPHY
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INTRODUCTION
GAAMZAN word means to delegate or to allocate or to outsource
Outsourcing is the process by which an organization contracts with another individual or company to get some of its work done.

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What is Business Process Outsourcing?

Gartner defines BPO as the delegation of one or more ITintensive business processes to external provider That administrates and manages the selected processes based on defined and measurable performance metrics.

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Why Rural BPO ?

Tremendous Cost Advantage Increase productivity Less operational costs Provide better service
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RESEARCH METHODOLOGY
Problem Definition

KDI- Finding ways of self-sustaining Economy using ICT GaamZan

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SECONDARY RESEARCH
Nasscom Survey for Rural BPO Shroffs Foundation Trust, Setting a Rural BPO in Vadodra HarVa- Rural BPO B2R Desicrew JK IT policy Guidelines for Vernacular Call Centres, DoT India. Rural BPO guidelines from GOI(Government of India)
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Some interesting facts

A comparative analysis based on year 2003 data demonstrates that

Indian BPO operations costs (cost per full time employee) only 20% of the cost incurred at U.S. (Source: telecentre.org/nasscom)
 It comes down to

12% in rural India (Source: harva.co.in)

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PRIMARY RESEARCH
Sampling Frame
Rural & Urban Populace Telecenter/ Khidmat Centre Owners Urban BPO organizations

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SAMPLING
Survey
General Population Survey

Target Group
Mostly Computer Literate persons (Aged 18-28)

Sample Size
100 People

Urban BPO

Top Operational Management Executives of BPO

1 BPO organization (Aegis)

Khidmat/ Telecentres

Owners of Khidmat Centre

10 Khidmat/Telecentres

Govt./Private Departments

Top Operational Executives

10 Departments/Organisations

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General Population survey helped to collect data/information on:

Availability of skilled educated youth, etc. Attitude and perception about BPO. Willingness of the local educated youth to take upon

the BPO activities.

Problems faced by general populace.  IT penetration in the rural areas.
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Khidmat/Telecenter :
Their willingness quotient to become part of

Khidmat Centre.
Their present level of business. Availability of Skill Set. Problems faced in dispensing telecenter services
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Survey of BPO (Aegis) & JKB (Zonal Office)

To map the BPO jobs and related activities/processes. To understand the overall BPO business dynamics. BPO jobs and Skills-set/Training requirements. Opinion/views on rural BPO and challenges

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Survey of Govt./Private Organisations

IT penetration in the Organisations. Availability of potential clients. Study of Processes related to the BPO.

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Limitations
 This project is a start up work in the field of entrepreneurship in the valley that

too at the highest level of innovation, possible flaws in the approach may exist.
 The general survey was conducted on the respondents who were mainly in the

age group of 18-28 years, hence the perception and awareness may vary for other age groups.
 There is a possibility of self-interest, bias of the respondents while answering

the questionnaires.
 The exact location for the implementation cannot be ascertained to be a

proper rural area, instead the suburb of the city say HMT.
 The project may need a further thorough study of the risks of all spheres

(Political, social, Economical & Technological) from the perspective of Crisis Management involved in the implementation of the same.
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Data Analysis & Findings of Survey

Outcome of Research

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Kashmir as an outsourcing destination

India has attracted a good share of the global BPO business pie (38%). The reasons, which transpired India to a BPO business hub, included its tremendous cost effective labor force, infrastructural developments, improved telecom facilities and its geographical location which provides it strategic edge over other outsourcing locations. It is now turn that Kashmir finds its place on the map of rural outsourcing and become a Tier III destination for domestic clients.
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Critical factors for a BPO

Infrastructure Manpower Technology Investment
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Survey findings: (Data collected from Officials)

Area of Operation
No. of BPO/ Telecentre Surveyed Average Number of Employees Client Location Location 1

BPO Both Voice and non voice based BPO operations

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KHIDMAT CENTER At the highest Level (J&K Bank)

140 Domestic & National Srinagar Call Centre & Back end Operations Graduate with good computational, English comprehension and computer skills

110 9Centers (1 Khidmat Center per 6 Village & 2 employees per Center) E-Governance Area 9 Districts of Kashmir Almost all E-governance Operations including Payment of Bills, Retailership

Segment Catered

Basic Skills at Entry Level 21

10+2 must with basic Computer Skills 6/26/2011

Skill set requirements

(Bottom Up Approach)
Low skill Jobs (LSJ) PHASE I Digitalization/Data Entry Data Publishing Medium Skill Jobs (MSJ) PHASE II Transaction Processing High Skill Jobs (HSJ) PHASE III Content Generation

Translation

Social Media Monitoring

Email Support /Live Chat support

Secondary Research

Vernacular Call Center

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Local English Call Center

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Feasibility Parameters(Viability Evaluation

Model )

Unsust. <3

Sust >3-6 Viable >6-8 Profitable 8-10 Kashmir ~ >6 (Nasscom report)

Rural Dynamics:
 RuralYouth Population  Entrepreneurship in community  Telecenters/Cyber-cafes existence

Rural Infrastructure:
 Rural Electrification  RuralTelephone Connection  Electricity Availability Hours  Road Condition & Transportation

RuralTalent Pool:
 Professional/Technical Institutes  Computer Literates  Graduates/Post-graduates
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facility

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Feasibility Parameters
RuralTelecommunication Infrastructure:  Broadband Connectivity  No. of Telecom Service Providers Rural Orderliness  Strike prone  Natural Disaster (Type & Severity)  Govt. Policies  Incentives and subsidies specific to IT sector Source: tercentre.org
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RURAL BPO MODEL

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BPO Activities identified

PHASE I
Data Entry PHASE II Transaction Processing (Vernacular) Web Research LPO Call Centre Data Processing Document Scanning Data Conversion

PHASE III Secondary Research Tie-Ups with Tier I and Tier II cities Call Centre (Foreign languages) KPO/MPO
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Potential Clients
 Government departments  Existing Businesses  Data entry jobs from financial institutions  Hospitals  Tier I and Tier II clients in phase II & III

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FINANCIAL ROADMAP (PHASE I)

(Abstract Data from Nasscom)
An initial investment of Rs. 7,00,000 (Rupees: Seven Lac only) is

required to set up the above GAAMZAN with 20 seats and necessary hardware, for PHASE I.
CAPITAL STRUCTURE:

Capital Loan from Bank @11% interest TOTALS:

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= = = =

Rs. 2,00,000 Rs. 2, 00,000 Rs. 3, 00,000 Rs. 7, 00,000

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Loan from DCI @ 18% Subsidy under ED Scheme

BREAK-EVEN ANALYSIS
Costs Initial Investment (Break even Cost) Man Power & Other cost BREAK EVEN COST (IN INR) (@20 operators x 8hrs/day x 25 days/month) = Rs. 107812/ 25x8x20
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Rupees (INR) Rs. 7, 00,000 Rs. 107,812 Rs. 26.95/hour/operator

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FIXED COSTS DATA

PARTICULARS 1. Computer @ Rs. 20,000 2. Printer/ Scanner 3. Server 4. UPS + Generator 5. Furniture, Fixture, Lights, etc. Total Fixed Costs
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Qty.

Rupees (in INR approx. ) 20 Nos 4, 00,000 3 No. 1 No. 1 No. each +/50, 000 50, 000 1, 00, 000 50, 000 Rs. 7, 00,000
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OPERATIONAL COST DATA

Nos Total Operators Quality controllers Administrator Accountant (a) Total manpower cost per month
Electricity Cost for 20 computers:

(Approx. figures in Rs.)

Rate/month (Rs) Rs. 3500 Rs. 5000 Rs. 5000 Rs. 4000 Total Salary (Rs) Rs. 70, 000 Rs. 10, 000 Rs. 5, 000 Rs. 4, 000 Rs. 89,000 180W 8 25 36 6 4320 Rs/month 2000 Rs/month 2000 Rs/month 1000 Rs/month 4450 Rs/month 5042 Rs/month 6/26/2011 Rs. 1, 07,812

20 2 1 1

Average consumption per computer Usage hrs/day Usage days/month Kilowatt usage/computer/month Cost/unit of electricity (Rs) (b) Electricity cost for 20 computers (c) Other electricity consumption per month (d) Other Costs: Rent (550 Sq. Ft.) Connectivity cost Misc.( 5% of manpower cost) Interest on investment @11% p.a. 31 Total Operational Cost per month

RECOMMENDATIONS AND SUGGESTIONS

Based on Primary and Secondary Research

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Changing the perception of people

Entrepreneurship development and negotiation skills

are important to excel in any field related to economic independence e.g JKEDI. The migration outside state could scale down and help reverse present migration trend (as in case of AEGIS). Dependence on Govt. jobs would also scale down appreciably.
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Manpower Capacity Building

 Exploring the role of local agencies (College/IT Institutes) in

imparting the training at low cost.

 Employability is the biggest issue. Kashmiri youth must be

inculcated with employability factors like customer handling, soft skills at the basic level.

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Readiness for rural BPO

 Practical Exposure to the valley students is the need of hour for

them, to be employable at all levels of business spectrum.

 Computer Training and outsourcing is the order of the day, it must

be promoted.

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CONCLUSIONS
The outsourcing business in India is based on sound fundamentals. But as the market gets over exposed, certain chinks develop that threaten the very basis of the existence of the business. India has got the competitive advantage to capture a good share of the global outsourcing market and rural INDIA (70%), the DOMESTIC outsourcing market. Only constant innovation and spotting new opportunities can help rejuvenate this competitive advantage. Current trend therefore is that, the outsourcing companies are moving towards tier III cities for their outsourcing operations and rural BPO GAAMZAN is definitely one of those business innovations that will help Kashmir to begin a new Era of Freedom.
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BIBILOGRAPHY
http://www.nasscom.in/upload/43171/Rural_BPO.pdf http://www.harva.co.in http://kashmirtech.blogspot.com/2011/03/rangarajan-report-is-ictnegative.html http://www.desicrew.in/ http://www.business2rural.com http://www.tenet.res.in/ http://www.bpoindia.org/faq/setup-guidelines.shtml http://india.gov.in/allimpfrms/alldocs/8946.pdf
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