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Technological Convergence And Rural Outsourcing

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Business process and knowledge service outsourcing to rural centers is fast catching up. It is evident from the success of Satyam-promoted concept of GramIT – the rural BPO. …

Business process and knowledge service outsourcing to rural centers is fast catching up. It is evident from the success of Satyam-promoted concept of GramIT – the rural BPO.

Firstly, the concept by itself is a breakthrough in the history of Indian outsourcing business. It has redefined the way businesses can be carried out. Traditionally rural areas were seen as the supply grounds for agricultural products. In light of a rapid evolution of the economy to being a service oriented one, there is a need for bringing villages into the services fold very rapidly because real development of India lies in the prosperity of her 600,000 villages. This objective can be achieved by increasing the share of services in the notional GDP of Indian villages.

In this paper we propose a high-level and a conceptual design that explores the potential of “convergence” that can bring about a sea-change in the rural economies of India while impacting the way business is done. Subsequently we would go about to explain how Satyam Computers, in collaboration with Byrraju Foundation implemented this concept with amazing results. This paper takes an evolutionary approach and explains the various business process improvements that were made possible through convergence before extending the discussion to rural transformation through technological convergence.

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  • 1. Convergence for an inclusive growth – The eSupport example Krishna_ Muppavarapu Ravi_Med uri du Jaipal_Nai Chaganti Vinay_ Page 1 of 14
  • 2. Page 2 of 14
  • 3. Introduction Business process and knowledge service outsourcing to rural centers is fast catching up. It is evident from the success of Satyam-promoted concept of GramIT – the rural BPO. Firstly, the concept by itself is a breakthrough in the history of Indian outsourcing business. It has redefined the way businesses can be carried out. Traditionally rural areas were seen as the supply grounds for agricultural products. In light of a rapid evolution of the economy to being a service oriented one, there is a need for bringing villages into the services fold very rapidly because real development of India lies in the prosperity of her 600,000 villages. This objective can be achieved by increasing the share of services in the notional GDP of Indian villages. In this paper we propose a high-level and a conceptual design that explores the potential of “convergence” that can bring about a sea-change in the rural economies of India while impacting the way business is done. Subsequently we would go about to explain how Satyam Computers, in collaboration with Byrraju Foundation implemented this concept with amazing results. This paper takes an evolutionary approach and explains the various business process improvements that were made possible through convergence before extending the discussion to rural transformation through technological convergence. Convergence – A brief background Convergence has traditionally been defined as “a multi-media environment and/or network where signals regardless of type (i.e. voice, video, data, etc.) and encoding methodology may be seamlessly exchanged between independent endpoints with similar characteristics”. This is mainly from the point of view of the great strides that humankind is making on the information technology front. The phenomenon of convergence is defined in many other ways and contexts. For example device convergence is the kind that is experienced by most of us. The ubiquitous handheld PDA is an excellent example of device convergence. Figure 1 is an excellent depiction of device convergence. Page 3 of 14
  • 4. Fig. 1 An illustration of device convergence As much as physical devices converge, there is also a similar convergence happening in other areas. Examples of this are functional convergence, economic convergence, and geographic convergence1. Convergence of the first order Going by the discussion in the previous section, we see that convergence is generally defined as coming together of homogeneous entities through some technological, economic, sociological, political, or business process innovation. We define this as “convergence of the first order”. It is the most primitive form of convergence that has very limited or non-existent relation with convergence in other fields. Figure 2 indicates some of the fields in which convergence can occur. Technological Geographic Functional Economic Political Social 1 http://cbdd.wsu.edu/kewlcontent/cdoutput/TR501/page29.htm Page 4 of 14 Fig. 2 Weak interactions between various convergences
  • 5. Convergence of the higher order These first order convergences are primitive in comparison to the more futuristic “higher order convergence”. But that does not in any way undermine their contribution to the great improvements in the way business is done. In light of the rapidly changing market scenarios, there is a need to define a higher order of convergence to arrive at a more sustained and inclusive growth for organizations, countries and the world in general. This calls for a realignment of the various convergences in a way that each one gets the benefit of the technological convergence. Figure 3 illustrates this realignment. Geographic Functional Economic Political Social Technological The highest Fig. 3 Strong interactions between various convergences reinforced by the order of technological convergence convergence is a conceptually enchanting proposition where convergences in various fields reinforce each other creating the ultimate synergistic scenario. Technological convergence would encompass and be the common factor even in the highest order of convergence. We illustrate this in figure 4 by introducing “field X” that represents all the fields in which convergence can happen. Represented in a vector form, each field experiences some convergence within itself represented in magnitude and direction by the inward looking arrows. But the true benefit of such discrete convergences will arise only when the phenomenon of technological convergence expands enough to encompass the scope of individual convergences. Page 5 of 14
  • 6. “Field X” Convergence Fig. 4 The evolution of the highest order of convergence with technological Convergence convergence cutting across others from an organizational perspective While the convergence model described in the previous sections has very broad scope, it can be conveniently applied to organizations, which are essentially a significant subset of that broad scope. As introduced early in this paper, we propose a conceptual model that makes use of technological convergence to bring about synergies of convergences across various business and business-related areas more Page 6 of 14
  • 7. from an organizational point of view. Core to this model is the “convergence processing unit” that essentially brings various organizational convergences on a single platform. Some of these “input-convergences” are:  Business experiences that have converged into a vast repository of tacit knowledge  Process management expertise that has converged into documented forms of best practices and execution efficiencies  Technological breakthroughs that have led to the availability of convergent devices and services, especially the Internet broadband  Human convergence in the form of a dedicated army of like-minded and like-thinking employees and a suitable convergent platform to manage the valuable human capital The outputs of the convergence processing unit are aimed at achieving the most ideal scenario in which various stakeholders like the employees, investors, customers and the society benefit from the existence of the organization. In the absence of such a convergence processing unit, it becomes extremely difficult for an organization to prove its necessity to exist in the first place. We illustrate the same in figure 5. It applies to a wide range of businesses ranging from agriculture to manufacturing to services. Business experience Process management expertise Inputs Technological breakthroughs Human convergence Convergence processing unit Customer delight Outputs Employee delight Society delight Investor delight Fig. 5 A conceptual design of the convergence black box typical of organizations Page 7 of 14
  • 8. Page 8 of 14
  • 9. Unraveling the Convergence Processor Evolution of eSupport @ Satyam From a tiny startup of 70 employees at the time of inception in 1988, Satyam grew by leaps and bounds to about 30,000 employees by 2000 and currently it is hovering at about 40,000. This was possible largely due to a convergent force called the Internet and a mega convergence of human intellect in the form of the availability of a large number of human resources qualified and trained on the nuances of Information Technology. At Satyam we were quick to understand and extrapolate the importance of convergence at various levels and stages of our business processes. With a view to enhance efficiencies in business processes, especially with a huge employee base, a system or a platform for virtual delivery of services was envisaged and was named eSupport. The primary objective of eSupport is to bring about convergence in the various business processes and service offerings. Within 4 years of instituting this initiative almost 65% of business processes along with the associated service offerings were brought under the fold of eSupport and were capable of being executed virtually from anywhere. Quality Strategy HR Function Finance Function Learning Resource Mgmt Procurement Page 9 of 14 Fig. 6 Convergence of business processes encompassed by convergence of eSupport
  • 10. While various functions were converging within themselves, eSupport acted as the technological convergence force or the convergence processing unit that synergized the individual convergences. A reference to this is given in an article published in Human Capital magazine2. Creation of the convergent force called eSupport was dependent largely on other convergent forces like the Internet, mobile computing, highly standardized project management methodologies, innovative business process management practices, software technologies with high integration capabilities, etc. In other words eSupport transformed itself into a platform for shared services with HR, Finance and other functions being the prime beneficiaries. eSupport transformed the way business was carried out at Satyam. For example, an employee can at a time apply for leave, order for the procurement of a capital item, approve her subordinate’s travel plan, drop a grievance in the virtual suggestion box, contribute a million dollar idea in the Idea Junction™, appraise the team’s performance and get a real time report of her department’s spending, all at the same time and almost from anywhere. eSupport for a holistic convergence – The GramIT initiative Expanding on the thought put forward in the introductory section of this article, we try to showcase here how eSupport has been used to bring about the much emphasized “rural transformation” in India. Here we define an important term called “economic convergence”. According to a definition in Wikipedia3, economic convergence refers to “the phenomena in which lesser developed countries supposedly catch up to developed countries in terms of economic productivity and growth”. Extending this to the Indian context, broadly the lesser developed countries equate to rural areas and the developed ones to urban areas. A definitive need for transforming rural areas is pronounced in many forums. Governments, organizations, policy makers, NGOs and politicians have realized that real growth for India would mean an inclusive growth where rural areas also benefit from and contribute to the overall growth of economy. Urban areas that were the key beneficiaries of the IT revolution were using up a valuable resource provided by rural areas in the form of people migrating from villages to towns and cities in search of meaningful jobs. Satyam realized that with every job created in the IT sector, the creation of about 4 ancillary jobs was adding to the “brain drain” from rural India. Satyam Computers as one of the pioneers to have the vision of rural transformation and having established a highly convergent 2 Leveraging technology for an integrated human capital management, pp 38-45, Human Capital magazine, Vol.11 No.2, July 2007 3 http://en.wikipedia.org/wiki/Convergence Page 10 of 14
  • 11. technological platform in the form of eSupport, realized that the same platform can be used to bring about rural transformation. This was the onset of a shift in the paradigm that rural India has been a largely ignored stakeholder when it came to the distribution of the wealth created by the Information Technology revolution. With the IT sector heading towards a phenomenal growth, introduction of the Rural BPO (named GramIT) initiative by Satyam in close partnership with Byrraju Foundation marked an inflection point in the rural-urban migration dynamics, as shown in figure 7. In the absence of a path breaking initiative like GramIT, the rural to urban migration would continue unabated with quite a few undesirable results, the primary being a lack of economic convergence and in fact a more dangerous economic divergence with urban areas getting richer and the rural areas getting poorer. That would in turn hamper the scope for other convergences like the social, political, etc. Page 11 of 14
  • 12. Migration from rural to urban areas The undesired effect of a rapid migration leading to undue stress on urban policy making The desired effect of a reverse migration leading to equitable distribution of wealth Introduction of the GramIT initiative – the inflection point Time Fig. 7 GramIT – An inflection point created by the phenomenon of technological convergence In eSupport, Satyam found an excellent way of using technological convergence to bring about the urban-rural economic convergence. This would in turn redefine the way businesses were going to be carried out in India with more and more corporates realizing the need to include rural areas in their scheme of things. Referring to figure 6, a lot of non core activities from various business functions of Satyam were identified during the convergence of those individual functions over a period of time. As each converging function found its way onto the eSupport platform, the non-core activities lent themselves to outsourcing. The expanding convergence of eSupport boosted the scope of outsourcing such activities further. Page 12 of 14
  • 13. As a first step, employees in GramIT centers located in 3 villages were made a part of a “workflow engine” that got converged onto the eSupport platform by being given “role-based accesses” to relevant components of eSupport. GramIT associates in turn would use the Internet to log on to eSupport and carry out activities like invoice processing, travel bookings for employees, handholding new entrants on the joining formalities, etc. Byrraju Foundation (partners for Satyam in the GramIT initiative) has ensured a high level of internet connectivity by subscribing to broadband from a reputed service provider. The last-mile connectivity where laying of physical cables was not possible was achieved by using Wi-Fi technology based on the IEEE 802.11 standards. These convergent devices are being used effectively to impart trainings through video conferences and setting up audio calls apart from being used for connecting to the Internet. Telephone connectivity using this convergence is also being explored for its legal viability. Conclusion Using technological convergence, Satyam has been able to bring about radical changes in the way business processes are carried out. Most importantly convergence has helped Satyam to connect to the society in a much efficient manner. The rural outsourcing standards established by Satyam will go a long way in impacting the notional GDP of rural India through a more equitable distribution of wealth. The end result of using convergence to the best its capability has actually given Satyam Computers much of its stated objectives in terms of its key stakeholders. With rapid proliferation and convergence of technologies, it is imminent that there will be more and more synergies setting in. End of article Page 13 of 14
  • 14. Page 14 of 14