GramIT – From Edge to the Centre
Country: India
Organization: BYRRAJU FOUNDATION
2) Sector of activity: Technology Livelihoods
3) Description of your products or services: In our efforts to generate more wealth in villages and create non-migratory livelihoods for unemployed youth, we have launched a program - ‘GramIT’ (pronounced as ‘graamit’). GramIT is an initiative that seeks to engage educated rural youth in the new economy by providing Business Process Outsourcing (BPO) services from the village. Selected unemployed youth are provided, free of cost, rigorous training in • Written and spoken English • Computer skills and • General Awareness Post- training, the youth are engaged in transaction processing at the GramIT centers that will be the back office of Indian Corporates, Governments and other institutions. GramIT centers will offer transaction processing in a variety of areas such as, accounting, HR, bulk mailing, records digitization and archival services, reminder and follow up services, logistics and travel support etc. We believe that long-term common economic surplus to sustain services at village level needs to be created through Village Level Productive Enterprise(s) (VLPEs). GramIT is a VLPE, a profit-oriented enterprise, a part of the surplus of which is ploughed back into the village for supporting the village in implementing initiatives like health, education, water, sanitation etc. The innovation is in the amalgamation of a social cause and a business case.
4) Description of the operational model: Each GramIT center is a well appointed and equipped 50 seater that employs upto 100 people in 2 shifts. Connectivity is terrestrial until a regional hub and wireless (802.11 ) thereafter. Each GramIT has 512 Kbps connectivity. A back up dial up or ISDN connectivity is there at each center and for more remote areas a VSAT back up is used. Every GramIT center has power from the Grid as well as a back up Generator of adequate capacity and of course adequate UPS. Access control and other security systems are also set up to ensure complete data security. Overall, the infrastructure is on par with the city based BPOs.
The associates at a GramIT center are put through a 12-week full time training programme that improves their fluency in English, reading writing, hearing speaking and comprehension. They are imparted computer skills and keyboarding ability to a minimum of 40 words per minute. They are trained in multiple processes and they are reoriented towards an exacting quality paradigm. Each one of them is put through a 6 sigma Green Belt Training Programme and their appreciation of the concepts and techniques is tested.
Experienced and passionate trainers who are transplanted from the city do training at the GramIT Center. While the Operations Manager is a “local youth “, an experienced professional with several years of IT experience in managing delivery/operations oversees several such Centers.
5) Description of the financial model: GramIT center will follow a BOOF (Build Own Operate Franchise) model. The Gram It centers are being set up by the Byrraju Foundation – a not-for-profit organization engaged in holistic and sustainable rural transformation. These Centers are operated by the Foundation until they reach a position of financial stability (in say 6 months). The associates of the GramIT center will then be organized into a Mutually Aided Cooperative Society and the Center will be franchised out to them. The work force will have ownership of the center and be driven by the entrepreneurial motivation for greater efficiency and thereby profit. They will assume full responsibility for operations and adherence to delivery schedules.
Quality, Processes, Training, Customer Interface and Business development and Brand will continue to be owned and managed by the Foundation which will ensure that a uniform high quality customer experience is built and maintained. The BOOF model effectively de-risks all stakeholders – the employees, the investors and the customers.
Client fees represent this approximate percentage of operational budget: 0%
6) Key operational partnership: GramIT Centers are Village Level Productive Enterprises (VLPEs) that serve more than one purpose: · They foster the spirit of enterprise in the village, as each GramIT center will be an independent enterprise that caters to predefined and exacting service standards. · They employ 100 or more people in each village. · They empower a village, by contributing a part of the profits to chalk out their own strategy for village development, as a supplement to Government programmes or as an independent initiative. · They act as a hub to increase demand for quality infrastructure and services such as better roads, retailing, education, health, etc., in the village- We work in partnership with the village community represented by Grama Vikas Samiti (GVS), the Government and a few corporates.
7) Current outreach:
We are at the Scaling Up stage. Each GramIT Center is a 50-seater facility, which employs 100 young people in two shifts. First GramIT unit is operational in Jallikakinada village in West Godavari and employs 100 Process Executives. The second one will be operationalised before November 2005.
How many clients have benefited from your product/service in total? Over the last year? GramIT has already seen a number of reverse migrations. Currently over 5% of Gram IT associates have migrated back from the cities and this number will grow further to at east five times the current figure once the robustness of the GramIT model is proven.
Several educated Housewives, a lost resource, have come to work either for the first time or are returning to work. This accounts for nearly 20% of the GramIT workforce.
Unmarried girls seeking employment (20% of Gram IT associates) and earning an income will also have signal effect on social issues like dowry and gender equality in the villages.
Youth, who would be unemployed for another 5 years while they search for ‘Government employment’, higher education or settle down in a vocation that does not use their education, are now economically useful contributors to the village economy.
What percentage of your clients is below the poverty line ($2 per day)? 40% The associates for the GramIT are selected only from the
villages and more than 40% of the first batch belongs to
BPL families, as categorized by the Government. In future,
when the educational qualifications are lowered, we expect
the percentage to increase
What is the order of magnitude of the potential demand for your products or services? Which
other low-income groups, countries or regions could benefit from it? Try to quantify (number
of clients, market size in currency):
The BPO industry is here to stay. With the demographic advantage that India has, this is not a short term tactical advantage based on wage level arbitrage, but a strategic one based on Human resource demand and supply. To encash on this opportunity it is imperative that the pyramid of the BPO be widened as much as possible. The broader the base of the pyramid, the bigger it can grow in terms of size and the higher it can grow in terms of value addition.
The biggest threats to the BPO industry are high levels of attrition and an urban associates’ viewpoint that the BPO industry is not a long-term career option. The pool of talent that the current BPOs draw from is one that is comprised of articulate urban youth whose horizon of career ambition goes beyond working in the BPO sector; maybe managing and selling it but not working in it processing transactions.
The educated youth of the village represents a human resource, which if properly trained and harnessed could provide a stable long-term workforce for the Indian BPO sector. This opportunity has to be taken through a process of maturity. GramIT Centers will start with simple transaction processing for Indian Corporates, Government and Institutions and gradually climb the value beanstalk. They will also naturally have the ability to withstand greater long-term price competition arising from a stable force with limited career horizon in the villages and need based overheads.
8) Scale-up strategy:
How many low-income individuals do you plan to benefit in three years from now? How are you planning to scale up or replicate your solution? What are the major constraints to scale up?
Going forward, voice services in both English and vernacular will be offered. Each GramIT Center will develop “specialization” in a group of related processes and will cater to a range of customers. If a customer so desires, a whole GramIT, a full shift of a GramIT can be dedicated to the customer.Associates work in two shifts as and are required to work in three shifts if the Customer so desires. And also each of the GramIT center can expand to cater to the new customers and therefore can provide employment for about 150-300 individuals per village. Our vision is to set up GramIT centeres in all the 150 villages where we work in. Setting up a rural BPO poses several challenges. Unreliable poor, poor connectivity, market skepticism, lack of trained manpower, inadequate orientation towards organized sector working are some of them. However, there are early indicators (please refer to the url given below) from the market about the economic potential of GramIT centers.
http://www.bloomberg.com/apps/news? pid=10000039&sid=a_fof97BD4Dc&refer=columnist_mukherjee
Which specific areas - and why - in your field would benefit most from investment by corporations, foundations, and other investors:
GramIT centers will ensure retention of a majority of the “investment “ made by the village communities in their human resources and export the services and reduce the migration of such ‘‘investments’’. If the net wealth created, accounting only for wages earned, of 100 such youth is calculated, it is roughly equivalent to the wealth created by 400 acres of wetland or 800 acres of dry land, which in most cases represents 25-40% of the village wealth. GramIT will benefit most from the investments in manpower training and marketing efforts to attract business clients, and in turn it will provide a return on investment to the investors on par with the market.
9) The organization: How does the initiative fit with your overall organization's strategic goals and priorities? How did the initiative start?
We are a non-profit organization working in rural Andhra Pradesh. Our work currently reaches 150 villages and impacts a population of about 2 million. We believe that by involving people, applying best management practices and technology we can make things happen. Our mission is to create a world-class platform for holistic and sustainable rural transformation by bringing in the best management practices and technology to address the issues of social sector. Our programs include Health Care, Education and Adult Literacy, Water, Environment and Sanitation and Livelihood Skills and almost any issue which impacts the quality of life in rural areas as a village is the unit of operation for us.
The strategy we follow to achieve these can be summarized as follows :
· The cost of delivering services to be brought down by the use of best management practices and technology · The incomes of people in the villages are to be increased through livelihood interventions. · Long-term common economic surplus to sustain services at village level is created through Village Level Productive Enterprise(s) (VLPEs).
Villages are home to 70% of India’s population. Yet, only 35 % of the GDP is generated in the villages. Villages, which were at one time the center of our economy, were pushed to the edge by the industrial economy. Does the knowledge economy hold a solution for rural India to regain its rightful place at the center?
Improved farm practices, rapid mechanization, fragmented landholdings and burgeoning population have made the “carrying capacity” of the land in each village inadequate to sustain the livelihoods of its population. Traditional crafts that once used to employ several artisans and craftsmen are now extinct with urban factory made products having made firm inroads into villages. Even in the most well irrigated districts, where two crops are possible, there is employment for just 100 days.At the same time, the benefit of greater access to education to the demographically dominant - the youth, has resulted in larger number of educated youth available in the villages, albeit without suitable employment opportunity
This demand supply imbalance requires to be redressed immediately as it is posing a serious challenge to the country’s socio-economic structure. GramIT has been conceived so as to convert this challenge into an opportunity.
The case is that if through connectivity and technology, each village can be integrated into the mainstream economy, then educated youth can export their services from the village and become a third engine of growth in the village economy, farm and off-farm being the other two.
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10) On the mosaic diagram, which of these factors is the primary focus of your work?
- Factor: High volume business based on small (even tiny) individual transactions
- Principle: Change radically the logic behind your business model
Contact Information:
Name: J K Manivannan - Partner
Organization: BYRRAJU FOUNDATION
Mailing address: Byrraju Foundation 2/74 , Jeedimetla village, NH 7, Secunderabad -500855
Country: India
Email: manivannan_jk@byrrajufoundation.org
Tel: 914023191725
Fax: 914023191726
Website: http://www.byrrajufoundation.org
Organization's legal status: Public Charitable trust
Number of Employees: 300
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