In the rural mid-west at Duluth, MN on the shores of Lake Superior, a company Saturn Systems offers application-maintenance and development services. Another company Aelara Corp. delivers IT services from Savannah, GA. Yet another medical-supplies distributor McKesson Corp. has moved its primary data center from San Francisco to Dubuque, Iowa.

Across oceans about 16,000 km away in Karunapally, a small hamlet in the South Indian state of Kerala is an unlikely place to outsource work to. But here in the picturesque village of the Kollam district with a large area under reserved forest, Sai BPO, a supplier of back office services, has one of its main centers catering to work from about 35 to 40 U.S. and European companies. The work spans data entry and image editing and for all the 65 employees, mainly diploma holders, it provides an opportunity to stay at home rather than go to a big city for  “work.”

These examples of sourcing work from remote interiors are something unique to the whole global outsourcing movement. In fact it could become a compelling business model, which will only get bigger with time. The reasons for this remote or rural sourcing aren’t far to see: Costs in big cities are escalating fast. That includes real estate, wages, transport et al. While an increase in broadband penetration to remote and rural areas is bringing them closer to the rest of the world, it is also giving boost to such a trend. And for some of the tasks like data entry, editing and remote infrastructure management such relocation of work to villages makes sense as it frees up resources in big cities to focus on the more complicated work. Also, often customers prefer that work does not leave the geographic boundaries of their countries and rural insourcing can provide many of the same benefits as wiring off work to different parts of the world.

Why Rural Sourcing is Getting a Boost?

Big city costs are escalating Deeper penetration of broadband to remote areas Availability of talent Ideal for basic services like data entry.

Shifts in Sourcing
A few years back the concept of providing IT-services tasks from low cost remote areas within the U.S. made eminent sense to Kathy White, former CIO at health conglomerate Cardinal Health. She invested $2 million to start Rural Sourcing, Inc. (RSI). The company specializes in providing application development services and operates out of small towns such as Jonesboro, Arkansas and Greenville, North Carolina. White’s goal is to build a company that provides high-quality IT work at a reasonable cost while employing Americans.

RSI specializes in developing applications for vertical industries with a large presence in the locations where it operates. For instance, staffers in Greenville focus on building applications for many of the large health-care companies based in the Raleigh, North Carolina area. Staff in Jonesboro concentrates on supply-chain and distribution applications for the retail industry.