Sramana Mitra: What is the delivery model? I’m very interested in understanding more about Wipro’s rural BPO strategy.
Manish Dugar: Sure. If we are to address the ever increasing appetite of the clients in terms of hospital, and if we are to ensure that we are tapping the talent at the right place, being only in these tier one, tier two cities will be a challenge. At the same time, we continue to get enough supply of resources, and there are enough graduates passing out, enough number of schools and colleges. But with the size becoming larger and larger and with the need to be closer to where these employee bases are available, what is becoming imperative is to look at models which are delivering from near where the source is. Hence, the need to also look at tier two, tier three, but the next step or the real paradigm shift is when we go to a rural a center.
The primary challenge of a rural center is the infrastructure is not yet ready. The availability of talent will not be as large as it will be in a, let us say, tier one and tier two cities. A combination of these two poses a challenge of how do you ensure quality check; how do you ensure the delivery; how do you ensure customers are confident that we can scale it up, and so on? [In] the India centers that we have, there are 2,000 or 3,000 employees in each of these centers. The rural centers will probably be 400 or 500 people at max. Hence, the model will be around how do you create a network of subcenters? How do you ensure that there is a process around ensuring quality of delivery, ensuring proper infrastructure, ensuring proper training and development for the resources who will provide services to the customer etcetera, etcetera? That model is yet to be tested and delivered. There are a few companies which are trying it out and being able to scale beyond 150 or 200 people or beyond more than two or three centers. If that becomes successful, then you can clearly create another supply source, another channel of talent, and it expectedly is supposed to be at the lower cost point. That will, again, give us an advantage in terms of being more competitive, being more able to provide another paradigm shift in terms of cost talk.
SM: So, Manish let’s talk more about a few points. This is a subject that, if you look at my blog, we have discussed quite a bit at length, and I have had lots of conversations with Dr. Sridhar Mitta of Wipro originally, but he is now doing this rural BPO venture called Next Wealth. You probably know him.
MD: I’m actually in touch with Dr. Mitta.
SM: If you are in the seven major cities and maybe a couple of other cities, how is it that you are not first going into another 50 smaller cities or towns that do have infrastructure? From Wipro’s point of view, that makes sense to go to cities like Lucknow first before you go to any kind of a rural strategy?
MD: Well, I think that the important point to note is what is the customer you are wanting to serve, and what is the investment that is being made forth? You are right. If we were to think of our centers next to Pune, Bombay, Delhi, Calcutta, it should be the Lucknows and the tier two and the Jodphurs of the world. The rural is not yet ready for an international support. Neither has the language competency, so we don’t expect the talent pool in the rural centers to be able to scale up when it comes to language proficiency on any of the Western languages. Nor is the infrastructure conducive enough at this point for us to take our international customers there.
If we start today, we will probably be able to get them up to speed, be able to support international clients at that point in time. But it is more important, for the immediate [future], to cater to the India market. If you were to look at the India market their expectation of the price points and the expectation, as far as language competency is concerned, is not necessarily very different from what these centers can deliver. So, if I look at a Lucknow or Jodphur, the infrastructure cost will not be very significantly different from what it will be in little distant part of Bombay or little distant part of Calcutta. As far as labor cost is concerned, we will become competitive because these are the catchment areas from where people get hired for support in international operations.
First of all, the talent is capable of handling regional languages. They can handle India customers. And, secondly, that model will have a significantly different cost structure because the expectation of compensation of these employees is very different. The infrastructure cost is significantly different. And, in some ways, it’s for people who are aspiring to finally move toward the international ops site. This is a stepping stone and a growth path for them, which in a way, helps them to get to an international operations site, if they intend to go out of where they are currently staying at. So, I would say that at this point, it is primarily to cater to the India market.