Global Young Leaders Programme
India Project – January 2009
Model Village Enterprise
Business Process Outsourcing (BPO) Services
in Baibal, India
Table of Contents
1. Executive Summary
2. Mission
3. Business Plan Background
4. Opportunity
5. Business Model
6. Benefit Plan
7. Marketing Plan
8. Human Resources Plan
9. Governance
10. Financial Plan
11. Risk Management
2
Executive Summary
•
•
•
•
•
•
With a mission of reaching underserved rural villages, Drishtee provides an innovative
distribution network for kiosk-based products and services in rural India through the use of
modern Information Communication Technology (ICT).
The Business Process Outsourcing (BPO) industry in India experienced revenue growth of
31.6% in 2008. Rural BPO industry is particularly attractive to investors because of low
labour and operation costs.
With Drishtee’s experience in rural BPO operations and existing network of 4,200 kiosks,
there is an opportunity for Drishtee to set up a Village Training and Operations Centre in
Baibal. The business can be taken to scale to other villages in India.
The large pool of potential customers in India, such as banks, educational institutions and
government bodies, represents significant opportunities for Drishtee to expand its business.
Eventually, business can also be drawn from existing BPO companies in Delhi and Mumbai.
After receiving comprehensive training, villagers will be groomed to be competent BPO
Operators as well as potential rural BPO entrepreneurs. Villagers will enjoy benefits in
terms of more job opportunities, enhanced education level, higher income and improved
living standards.
The sustainable benefits for both investors and villagers will be guaranteed by a welldesigned governance structure and risk management measures.
3
Mission
4
Mission
To develop a commercially viable BPO rural
business model that can be taken to scale in other
rural villages in India, leveraging Drishtee’s existing
supply-chain network and model village concept.
This business will both provide substantial returns
to investors and improve the quality of life of
villagers by providing increasing access to
education and employment opportunities.
5
Business Plan
Background
Foreword
BPO services in India
- Emergence of Rural BPO
Traditional Challenges of Rural Access
Overcoming the Barriers
Drishtee’s Advantages
6
Foreword
•
India has enjoyed promising economic as well as Information Technology (IT) growth in recent
years. Amongst various types of ICT services, the Business Process Outsourcing (BPO) industry
experienced exceptional growth at around 40% per year. With such rapid growth in the industry,
BPO companies in big cities are facing challenges of labour shortage and rising real-estate costs.
•
To sustain their strengths in the competitive BPO industry, certain entrepreneurs look for
extending BPO services into rural areas by cultivating the skills of educated young community
members. Despite the visionary concept, critical barriers concerning rural infrastructure and
human resource capacity hinder the potentials for growth.
•
Various organizations have endeavored to address these issues. Drishtee Development and
Communications Ltd (Drishtee), a unique rural distribution network set up in 2000, is leveraging its
first-mover advantage in rural access for revamping rural ICT development. With its achievements
in the past, Drishtee has gained accolades from respected institutions such as the World Bank,
Schwab Foundation, WEF and Clinton Global Initiative.
•
The aim of the business plan (The Plan) is to develop a BPO Training and Operation Centre, a
subsidiary under Drishtee, by both utilizing Drishtee’s experience in rural BPO and an innovative
new business model developed by GIFT. The ultimate aim of the Plan is to diffuse this
commercially viable model into other parts of the country and create a new era for rural BPO
development, as well as bring technology and economic development to the vast rural area.
7
Emergence of rural BPO services in India (1)
•
Rapid Growth
– India is one of the fastest growing economies in the world with an expected
annual growth rate from 5.2% to 6.5% in the future 3 years
•
Dynamic ICT industry
– Technology service sector accounts for approximately 40% of India’s GDP and
employ 25% of the national workforce
•
Robust BPO services
– Contributes substantially to India's revenue and drives 30% of growth in its IT
exports
– A variety of BPO services ranging from data-entry, transcription services, call
centre, to non-core and core transaction processing
– Experienced a year-on-year growth of 37% in 2006
– Employs around 400,000 people and is expected to face a shortfall of 262,000
professionals (opportunities) by the year 2012.
8
Emergence of rural BPO services in India (2)
• Decline of Agriculture creates new opportunities
– Monotonous and Low Income in rural area:
9 70% of rural population engage in agriculture
9 The national average income is US$592 while the per capita income of
Indian villages is US$252.
9 Agriculture contributes only 21% of the country’s GDP and is in decline.
– Serious rural-urban migration:
9 Unemployment in rural areas leads to widespread migration of unsatisfied
youths to cities seeking better career opportunities
Conclusion: The rising cost of BPO in India’s 1st-tier and 2nd-tier cities,
as well as the aspirations of the rural population for an alternative lifestyle
havegenerated abundant potential labour for rural BPO development.
9
Traditional Challenges of Rural Access
• Under-developed infrastructure
– Facilities for electricity, telecom, road and transport
are not fully set up in rural areas
• Limitations of labour capacity
– 40% rural population are illiterate
– 50% drop-out rate for children before the 5th grade
10
Overcoming the Barriers
– Drishtee’s Advantages
•
•
Drishtee currently operates a group companies including Drishtee
Foundation and Quiver Info Services. Enjoying an extensive rural
distribution network, the venture engages in promotion of ICT and offers
kiosk-based products and services, including FMCG’s and other durable
goods and services like education, health and financial services.
Support by various international institutions:
– Worldwide recognition from World Bank, Schwab Foundation, WEF and
Clinton Global Initiatives
– Backed by institutional investors including IFC, Acumen fund, Grameen
foundation
• Strategy of “Route Economics”:
– Services a multi-product Supply Chain network by
leveraging pre-defined transportation routes in
order to gain economic viability
– Manages existing network of over 4100 kiosks and
700 rural retail points across 10 states in India
Route Map
11
Overcoming the Barriers
– Drishtee’s Advantages (2)
• Pilot success in BPO:
– The Company has recently completed pilot projects in
BPO by setting up a rural BPO centre in Saurath, a
small village in the Madhubani district in the eastern
Indian state of Bihar
– By utilizing the latest ICT components to provide top
quality services like call center support, digitization
services etc., it has built up substantial client
networks in government organizations as well as
private corporations in both India and the US
12
Opportunity
13
BPO Industry in India
• The BPO industry recorded revenue growth of 31.6%, amounting to
US$12.5 billion in 2008
• Over the next two years, 45.7% of companies surveyed expect revenues
for the BPO industry to grow by 20-35% annually
• Research & analysis, HR services and translation services are expected
to see high growth rate over the next two years
• Although economic slowdown is bound to have some impact on the the
industry, BPO services will still enjoy significant growth in the long-term
as companies increasingly use outsourcing and off-shoring as means to
rationalize their costs
• In many cases, the BPO industry will actually grow due to increasing
numbers of firms looking to cut costs and outsource additional services
14
BPO Revenue by Category
India's BPO Market Estimates
Key Service Line
1999
2001
2002-2003
2003-2004
2005-2006
HR
5.4
3.5-4.0
0.45
0.75
1.65
Customer Care
4.1
8.0-8.5
8.3
12
15
Payment Services
2.9
3.0-3.5
2.3
4.3
6.2
Content
Development
2.6
2.5-3.0
5.1
5.5
6.7
Administration
1.3
1.5-2.0
3.25
5.4
8.4
Finance
0.7
2.5-3.0
3.25
5.4
8.4
*All estimates in USD billions
15
Rural BPO in India
•
A fast growing industry, and has a great potential market in India
mainly due to lower cost advantages .
•
The BPO industry in India has experienced a year-on-year growth of
37% in FY 2005-'06, and the size of the market is estimated to be $9-12
billion today.
•
It employs around 400,000 people and is expected to face a shortfall of
262,000 professionals by the year 2012.
16
Comparative Advantages of Rural BPO Units
over Urban Ones
•
Compared to BPO in metropolitan cities, rural BPO has lower employee turnover, lower
operating costs, and lower training costs for many BPO companies
•
Key advantage: availability of low cost skilled manpower
•
Efficiency
• Entrepreneurship is the strength of rural BPO where overall ownership is distributed
amongst multiple partners
• Provides a sense of ownership leading to better working environment and improved
efficiency.
•
Flexibility
• Ability to offer independence to choose the location of working place
• The local entrepreneurs could use a part of their home to fulfill assignments
•
The establishment of BPOs in villages will result in the development of rural
infrastructure, increase in standard of living and generation of employment
opportunities at the village level.
•
Addresses the problem of people migrating from the villages to cities in search of work.
17
Village BPO Firms
•
•
Chida Soft
– BPO firm based in Kizhanur village of Thiruvalluar district in Tamil Nadu.
– Undertakes BPO operations for Lason India, a company headquartered in
Chennai.
– Lason India is a subsidiary of Lason Inc., a US-based end-to-end outsourcing
company. Chida Soft was established by Lason India under its "Lason Village
BPO" initiative to undertake outsourcing operations in rural areas
Drishtee Rural BPO
• Operating in the eastern Indian state of Bihar, Drishtee utilizes the latest ICT
components to provide top quality services like call center support, digitization
services, etc. to clients in India and the US.
• Drishtee is also leveraging its vast network of 4,200 kiosks across the country to
provide these services from geographically distributed centers.
18
Why BPO in Baibal?
• Low operating cost compared to top tier cities
• Basic education: 60% literacy rate.
• Convenience for both men and women to work from
home.
• Drishtee Presence.
– Leverage on existing robust route network model.
• Strategically and geographically situated next to the city
of Panipat.
19
Geographic location
Baibal
20
Business Plan
21
Koji Model for Rural Business
Superior
Products and Services
Basic
2) Superior
Internal Market
3) Superior
External Market
For Example:
•Mobile Phones
•Job training
For Example:
•BPO
1) Basic
Internal Market
Basic External
Market
For Example:
•Education
•Healthcare
•Infrastructure
•Finance
For Example:
•Handicrafts
•Eco-Tourism
Internal
External
Market
22
Rural Market Development
Stage 1: Basic Internal
Basic Education
Stage 2: Superior Internal
Stage 3: Superior External
Basic Education
Basic Education
+
+
BPO Training
BPO Training
+
BPO Operations
23
Stage 4: Replication
…
Stage1: Basic Internet Market
Education
Education Kiosk
Kiosk
Students
Students
Stage 1: Meeting village subsistence needs in the internal market through
Education Kiosks providing basic education and training.
24
Stage 2: Superior Internet Market
Investment
Investment
Education
EducationKiosk
Kiosk
BPO
Training
BPO Training
Centre
Centre
Trainees
Trainees
Stage 2: Addressing specialized needs in the village internal market through
offering job specific skills development and opportunities with a BPO
Training Centre.
25
Stage 3: Superior External Market
Investment
Investment
Education
EducationKiosk
Kiosk
Village
Training
Village Training
Centre
Centre
Trainees/
Trainees/
BPO
BPO
Operators
Operators
Village
VillageOperators
Operators
Centre
Centre
Stage 3: Utilizing trained operators to address external market needs by
establishing a BPO Operations Centre within the village.
26
Stage 4: Scalability
Financial & Social
Benefits
Haryana and other
regions in India
Panipat district
Baibal village
Current
Current to
to 2010
2010
2010
2010 to
to 2012
2012
2012
2012 and
and onwards
onwards
Stage 4: With the success of the model village enterprise in Baibal, the BPO will be
replicated in Panipat district and eventually throughout Haryana and other regions in India.
A holding company will be created to oversee the expansion into other regions.
27
Operations Model Break-down
Stage 2:
Stage 3:
Operations Centre
Training Centre
Financial Flow: Internal
Source
Drishtee
Training/Materials
support
Clients
Village Training Centre
(Education Kiosk)
Trainees
District Forwarding Centre
(District Office)
Workforce
28
Village
Operations
Centre (Kiosk)
Financial Flow: External
Source
Benefits
29
Social Benefits
•
Providing job opportunities,
particularly for women
•
Encouraging villagers’
livelihoods
•
Increasing household income
(annual per-capita income
increase of 815 INR)
•
Improving village living
standards
Enhancing village prosperity
Statistics about Baibal:
• Current population: 9,000
• Current annual per-capita income: INR 10,909
Projections:
• Estimated population in 2012: 12,000
• Number of Operators to be employed in 2012: 163
• Annual salary of each Operator: INR 60,000
• Increase in annual per-capita income with BPO: INR 815
31
Encouraging Local Livelihood
• Villagers are concerned about the lack of job
opportunities and education facilities in Baibal.
• BPO provides more local job opportunities,
raises villagers’ income and discourages
migration to cities.
32
Providing Education Opportunities
• Number of villagers who will have received training by 2012:
241 (2% of total population)
• Benefits:
• Acquire basic computer skills such as typing
• Learn and improve English
• Acquire general business knowledge and manner
33
Improving Living Standard
•
Villagers’ living standard will be improved with the increased
per-capita income.
•
Potential benefits:
9 Higher purchasing power enabling the buying of products from
the Rural Retail Points (RRPs) or other retailers
9 Increased access to education, health care and entertainment
9 Improved infrastructure, including electricity, road, etc.
34
Summary of Social Benefits
Number of
Operators:
Number of
Operators:
Number of
Operators:
63
15
Increase in percapita income:
163
Increase in percapita income:
Increase in percapita income:
INR 815
INR 86
INR 336
2010
2011
35
2012
Marketing
36
Marketing Plan
To set up data processing units at individual work
stations in Baibal village based on Drishtee’s existing
route model by using the skills from the local
population.
37
Growing Indian BPO Market
USD Billion
Source: NASSCOM
35% projected growth rate in India from Y2009 to 2012
38
BPO Facts
•
•
•
•
2 million employed in the industry in 2008
Generated USD1.6bn revenue in 2008
Expected to generate USD6bn revenue by 2012
BPO revenue from Finance and Accounting platform has
been growing over 30% yearly since 2003
39
Leading Data Processing BPO’s in India
(Tier 1 cities)
•
•
•
•
•
•
Daksh eServices
ISeva
ICICI OneSource
Efunds International
Hinduja TMT
WNS
40
Potential Customer Categories
•
•
•
•
•
•
Insurance & Banking
Medical transcription
Education institutions and literature
Infrastructure
Government projects including defense services
Technical call centre
41
Scalability to neighboring villages in Panipat
•
•
•
•
Total villages in/near Panipat : 50+
Education institutions in Panipat and its villages : 275+
Potential bank clients in neighboring areas : 10
Large number of government and infrastructure projects
in close proximity provide ample new business
opportunities for expansion
42
Client Acquisition Strategy
•
•
•
•
•
Leverage significant cost advantages
• Transaction costs possibly 1/3 of urban BPO’s
• Increasing cases of failed urban BPO’s due to
overhead costs
Target clients in Panipat district
Demonstrate superior job quality
Pitch for business from existing BPO’s in Delhi/Mumbai
Reinforce social benefits for villages
Marketing Strategy
• To identify potential clients utilizing market
research and surveys.
• Promote the model through internet and print
media.
• Rural marketing through Drishtee network and
Infrastructure.
• Engage local and state government in promoting
and creating awareness about the model.
44
Marketing Implementation Plan
Stage 1
Equipment Installation
Stage 2
BPO Operations Launch
Stage 3
BPO Scaling Up
Initial business
development
Development of
client pipeline
Ongoing sales and
marketing efforts
BPO Operator
Recruitment & Training
Increase Productivity by
higher Level Training
Training & Facility
Optimization
Q3 & Q4 2009
Q1 to Q4 2010
Q1 2011 onwards
- Install computers
- UPS installation
- Identify BPO
Operators
- Sales programme
- Engage potential
customers
- Expanding coverage
of network
- BPO scaling up in
multiple villages
Human Resources
46
Organization Structure – Stage 1 & 2
Organization Structure – Stage 3
Staffing Development Plan
Staffing Plan
Job Title
BPO Sales & Operations CEO (Head Office)
2009
2010
2011
2012
1
1
1
1
Sales Manager (Operations Ctr)
1
District Manager (Operations Ctr)
1
1
1
1
2
0.5
0.5
English Trainer
0.5
2
Computer Skills Trainer (IT / Tech Support)
0.5
2
4.5
9.5
Administrative Assistant (Operations Ctr)
BPO Training
Training Manager (Kiosk Operater)
Total
0.5
1.5
49
0.5
2.5
Training Needs and Requirements
Current situation
Technical skills
Soft skills
Values
Expected conditions for
success of rural BPO
•60% basic literacy rate
in Baibal Village
•Fundamental technical and
computer skills
•Knowledge of BPO services
•Communication skills
can be improved
•Management traits
•Business skills
•Accountability
•Additional income
sources needed
•Improvement of
education required
*Source: Drishtee
50
Gaps between current
and expected situations –
NEED FOR TRAINING
AND DEVELOPMENT
Aims of villager training
• Bridge the gaps of villagers’ soft skills to meet the expected
standard of clients.
• Address the current limitations of rural BPO with emphasis on:
– Comprehensiveness
– Dynamism
– Credibility
• Use a multi-skills approach:
– Business partners such as BPO centers and client corporations
are embedded in the provision of training
– Enhance the effectiveness and practicality of the development
services provided
51
Comprehensive Training
• Groom villagers to become rural BPO
entrepreneurs in addition to BPO workers
Basic Skills
(4 weeks)
- PC skills
- Literacy
BPO-related
Knowledge
(3 months)
Task-related
z
z
Transcription
Data-processing
-Industry-related
z
z
Banking
Insurance
52
Entrepreneur Skills
(6 months)
- Sales and
Marketing
- Book-keeping
- HR Management
Dynamic Training
• Strong connections between BPO
training centre (back-office) and BPO
operation centre (front-office) for
training needs review
• Constant feedback and inputs from
both client corporations and BPO
operators to ensure that expectations
from both parties are achieved
53
Credible Training
Address critical industry-specific issues such as
information security and quality control
– Accreditation and certificate-based courses
• Enhance the professionalism of BPO workers and trust and
confidence of corporation clients
• Strengthen the motivation of rural labor seeking for alternate
career paths
– On-the-job performance appraisals of BPO workers as
well as individual consultation services for BPO
entrepreneurs
54
Governance
55
Objectives
• Ensure accountability to the stakeholders
• Ensure transparency in the business process
• Ensure all stakeholders are involved in the
decision-making process
56
Proposed Shareholding Composition
Drishtee
45%
55%
Other Investors
57
Board of Directors and CEO
Board of Directors:
Composition:
Drishtee: 3
Other investors: 2
Panchayat committee member (rotation basis): 2
Villager:1
BPO Operator: 1
The CEO and the Board of Directors shall take decisions jointly on the overall
management of the company & the CEO is in charge of execution of the
decisions.
58
Governance in BPO Training
•
Ensure superior quality of training & timely
completion of the programme through:
– Regular routine inspections of the training facility by
the board members.
– Encourage delivery of quality training to the villagers
by giving a commitment in writing.
59
Governance in BPO Operation
• Maintain delivery of projects within the stated
timelines through a contract agreement.
• The board of directors should review and
approve the employment contract in the
interests of the employees.
• The management should enforce the contract.
60
Financial Plan
61
Financial Timeline
2009
1st Half
2nd Half
Stage1
Stage1
Stage2
Stage2
Stage3
Stage3
1st Half
2012
2nd Half
1st Half
Scaling
Scaling Stage
Stage
P&S
P&S
P&S
Other
Villages
in Panipat
2011
2nd Half
P&S
BAIBAL
Village
2010
Market
Market
Market
Market
Basics
+
Training
Basics
+
Training
+
BPO
Basics
+
Training
+
BPO
BPO
BPO
Basics
+
Training
+
BPO
Basics
+
Training
+
BPO
Basics
+
Training
+
BPO
…
Basics
+
Training
Basics
+
Training
+
BPO
Basics
+
Training
+
BPO
Basics
+
Training
+
BPO
…
Financial Highlights
• The Rural BPO Model
exhibits a profitable
outlook with a
prospective return
– Operating income
break-even in 1.5 year
– Total cash flow breakeven in 2.5 years
– 41% IRR over 3 years
USD
300,000
250,000
200,000
150,000
100,000
50,000
0
Revenue
Operating Income
Total Cash Flow
(50,000)
63
2009
2nd
half
2010
1st
half
2010
2nd
half
2011
1st
half
2011
2nd
half
2012
1st
half
Profit &Loss Projections
2009
Baibal
2010
1st half
2nd half
Stage 1
Stage 2
Stage 3
Scaling Stage
Basics+
Training
BPO
BPO
BPO
Basics+
Training
BPO
180
16,761
% Growth
Costs
Operating Cost
Human Resources Cost
Marketing Cost
Operating Income
35,342
1st half
2012
2nd half
Other Villages in Panipat
Revenue
2011
72,086
2nd half
132,305
1st half
260,042
211%
204%
184%
197%
66,127
103,467
168,045
6,094
22,012
38,877
359
5,549
8,451
15,235
19,488
28,962
5,535
16,113
26,076
43,542
76,629
131,733
200
350
4,350
7,350
7,350
7,350
(5,914)
(5,251)
(3,535)
5,959
28,838
91,996
USD
Cost Model : Operating Cost
2009
Baibal
2010
1st half
2nd half
Stage 1
Stage 2
Stage 3
Scaling Stage
Basics+
Training
BPO
BPO
BPO
Basics+
Training
BPO
Rent
359
5,549
1st half
2012
2nd half
Other Villages in Panipat
Operating Cost
2011
2nd half
1st half
8,451
15,235
19,488
28,962
/
215
215
431
431
431
205
205
615
820
820
1,640
Internal Transport
/
738
738
1,476
1,476
1,476
External Transport
/
2,952
2,952
5,904
5,904
5,904
Electricity
104
1,389
2,881
5,554
9,808
18,462
Stationary
50
50
1,050
1,050
1,050
1,050
Equipment (for Training)
USD
Cost Model : Human Resources
2009
Baibal
2010
1st half
2012
2nd half
1st half
2nd half
Stage 1
Stage 2
Stage 3
Scaling Stage
Basics+
Training
BPO
BPO
BPO
Basics+
Training
BPO
Other Villages in Panipat
Human Resources Cost
2011
2nd half
1st half
5,535
16,113
26,076
43,542
76,629
131,733
3,690
3,690
3,690
3,690
3,690
3,690
-
-
-
1,845
1,845
1,845
1,845
1,845
1,845
3,690
3,690
3,690
Administrative Assistant
-
-
615
615
1,230
1,230
Training Manager
-
1,230
1,230
1,230
1,230
1,230
Communication Trainer
-
1,230
2,460
2,460
4,920
4,920
Computer Trainer
-
1,230
2,460
2,460
4,920
4,920
BPO Operators
-
6,888
13,776
27,552
55,104
110,208
CEO (Head Office)
Sales Executive
Distribution & Quality Control Manager
USD
Cost Model : Marketing Cost
2009
Baibal
2010
1st half
2012
2nd half
1st half
2nd half
Stage 1
Stage 2
Stage 3
Scaling Stage
Basics+
Training
BPO
BPO
BPO
Basics+
Training
BPO
Other Villages in Panipat
Marketing Cost
2011
2nd half
1st half
200
350
4,350
7,350
7,350
7,350
Promotional Scheme
100
150
2,150
3,150
3,150
3,150
Promotional Materials
50
100
1,100
2,100
2,100
2,100
Travel Cost
50
100
1,100
2,100
2,100
2,100
USD
Cost Model : Free Cash Flow (FCF)
2009
Baibal
2010
2011
2nd half
1st half
2nd half
Stage 1
Stage 2
Stage 3
Scaling Stage
Basics+
Training
BPO
BPO
BPO
Basics+
Training
BPO
Other Villages in Panipat
1st half
2012
2nd half
1st half
Free Cash Flow (FCF)
Operating Income
(5,914)
(5,251)
(3,535)
5,959
28,838
91,996
CAPEX
0
3,280
3,280
6,560
10,660
21,730
Debt Acquisition
0
2,296
2,296
4,592
7,462
15,211
Interest Expense
0
312
258
580
915
1,911
Debt repayment
0
399
329
740
1,167
2,439
FCF
(5,914)
(11,538)
(9,699)
(6,513)
8,634
50,705
Total Cash Flow
(5,914)
(17,452)
(27,151)
(33,664)
(25,030)
25,675
USD
Key Assumptions
• Revenue per operator is assumed to be 50,000
INR per month
• Annual increase of 5% in revenue per BPO
operators due to increased productivity from a
comprehensive training program
• Training tuition fees is assumed at 550 INR
• Electricity availability and stability is assumed to
be adequate and similar across the selected
villages in Panipat
Key Assumptions
• Costs of hiring a BPO operator is 5000
INR/month
• Other costs of HR staffing needs:
Title
CEO (Head Office)
Sales Manager
Distribution & Quality Control Manager
Administrative Assistant
Training Manager
Communication Trainer
Computer Skills Trainer
BPO Operaters
Job Title
BPO Operaters
2009
2nd half
Salary /
Month INR
30000
15000
15000
5000
10000
10000
10000
3500
2010
2011
2012
1st Half 2nd Half 1st Half 2nd Half 1st Half
16
32
64
128
256
Investment Requirement
• Initial investment: one model village US$30,000
• High potential for scalability: up to 20 villages
US$500,000
Exit Strategy
• Buyout
– 294% growth rate annually over 3 years
• No IPO, no transfer
– Long time to get dividends
USD
72
Probability of Investors
Low
Baibal Villagers
Medium
Banks
-
Local Government
High
Social Investors
HDFC Bank
State Bank of India
Social Investment Bank
Grameen Bank
Social Entrepreneurs
- Arbind Singh (The Social
Entrepreneur of the year
2008 India)
NGO/NPO
73
-
Acumen Funds
The Schwab Foundation
unLtd India
Asian Mutual Fund
Social Funds
Our Recommendation
Sell shares to other Social Investors
At least 3 years later…
Operating income break-even in 1.5 year
Total cash flow break-even in 2.5 years
IRR 119% over 3 years
74
Risk Management
75
Risk Evaluation
Reliability of Electricity,
Quality Control,
Computer breakdown.
HIGH
Transportation
LOW
Nature Disasters,
Social Disturbance.
Frequency
LOW
Impact
76
HIGH
Risk Analysis
Risks
Impact
Mitigation
Remarks
Quality Control
Customer relationship
and confidence
Continuous training
program
Improve the efficiency of
management
Computer
Breakdown
Disruption of Work;
Provide computer hardware
training
Ongoing access to
technicians
Reliability of
electricity
Service Undeliverable
Pre-reserve generators
Invest in the improvement
of infrastructure (e.g.
captive power)
Natural Disasters
Destruction of facilities
and labor
Back up systems
Partnerships with other
village BPO providers
Social Disturbance
Disruption of working
Back up systems
Partnerships with other
village BPO providers
Seasonal
Disruptions
Punctuality of work
delivery
Ensure proper time
management and reliable
transportation
Invest in construction of
roads
Thank you !!
78
Appendix 1
79
Client
Task
Feedback
District Foreword
Centre
Task
Village Training &
Operations Centre
Da
Feedback
Di
sp D a
ta
at ta
ch
Co
(C
ns
D)
ol
id
at
io
n
Work Flow Process
Work
Station
Work
Station
Work
Station
80
Training system
English
Internet Skills
Edu Kiosk
Computer
Lit.
BPO
Training
Basic Computer Skills
Data Processing
Tele-communication
81