When the going, in cities, gets tough, the tough (read smart) turn to the villages! Here is how some enterprising companies have launched successful rural IT businesses.

While much has been said and written about the Indian IT-enabled BPO (business process outsourcing) industry, its revolutionary business model is what has garnered the most attention. Amongst the public, this has been lauded for opening up opportunities for Indian graduates and housewives who earlier had precious few avenues for employment. In fact, the IT-enabled services industry has played a huge role in the emergence of the now much-coveted Indian middle class.

However, this prosperity is largely limited to our towns and cities. India's villages are still waiting, hoping to benefit from this IT revolution of sorts. Fortunately for them, a few pioneering individuals are spearheading rural BPO endeavours.

Care to launch a rural BPO?
"So what's a rural BPO?" you might ask. A rural BPO is a profit-making social enterprise set up in a rural area, which caters to the urban demand for select services. If that sounds like a mouthful, just think of the prevailing scenario as, Indian city-based BPOs service the West, while urban India is serviced by its rural village-based BPOs!

Does that sound far-fetched? Thankfully, not everyone thinks so. For instance, Comat Technologies' RuralBPO initiative has been working to create IT-based employment opportunities in rural areas since 1996. More specifically, its business model is based on the deployment of ICT-enabled rural business centres (RBC) to enable the socio-economic growth of rural communities. Although this may sound very socially oriented, Comat's endeavour is not charity. Its rural IT business model is not only sustainable, but also generates profits, and is scalable.

"Sweating an asset"

One major factor contributing to the profitability of Comat's business model is its complete focus on ROI. For instance, Sriram Raghavan, co-founder and president, Comat Technologies Ltd, explains that once technology was identified as the single largest cost of a rural kiosk, every endeavour was made to maximise its use by identifying various high-revenue activities that would occupy the computer platform round-the-clock. "This use of existing infrastructure, that is, the RBC as a single platform to deliver multiple services over 24 hours, or both during and beyond normal business hours, was pretty innovative! We call this 'sweating the asset'," he adds.

In the case of Comat, the asset is sweated by using the IT infrastructure to process financial transactions. Thus, what Comat has effectively done is to transfer an automated business process that may be performed 'anywhere', to the rural sector, so as to enhance the profitability of an IT asset that is used for other services during the day.

But if you read between the lines, Comat's model also suggests that the demand for IT-enabled services in the rural sector may lag behind the level needed for a rural kiosk to break even. Services rendered to rural communities may either be citizen-centric government services, such as the provision of birth certificates, death certificates, land records, etc, or convenience business services, such as mobile top-ups, railway ticketing, bill payments, or distance education services conducted in a virtual classroom.

PPPs help push the rural demand for ITES
In this context, Ashwanth G, co-founder of DesiCrew Solutions opines, "The gestation period of a profit-oriented [rural IT] business model tends to be longer." In fact, in order to push the demand for rural services, such business models are often a private-public sector partnership (PPP). Tying up with local administration to provide e-governance services helps assure a rural kiosk of a low, yet steady demand for its services.

Besides, as Ashwanth explains, "The current level of infrastructure bottlenecks warrants many private players to seek the support of the administration. Further, in a people-centric activity, it takes the administration to build credibility and take the private players to the different corners of the country. Also, a PPP helps each player (administration/private) to focus on its core area of expertise."

No surprises, then, that Comat has tied up with the government of Karnataka and 3i Infotech in order to set up Rural Business Centres in Karnataka, and has also partnered with ICICI Lombard, LIC and SBI to offer financial services. However, although DesiCrew works with the administration, most of its work comes from the private sector.