To date, RSI has signed several customers, including Cardinal Health; toymaker Mattel; and business consulting firm Clarkston Consulting, who have farmed out some work to the company. RSI claims it has over 20 customers, above $1 million in revenue and over 100 employees at five IT centers in Arkansas, North Carolina and Missouri.
“RSI’s model of  ‘domestic sourcing’ has worked well. RSI provides our customers a portfolio of services and solutions ranging from enterprise application services on platforms like SAP and Microsoft, besides business intelligence and data warehousing expertise and strong, experienced         application development, maintenance and support,” said Tim Plummer, Clarkston Consulting’s manager, when asked about the benefits of sourcing to rural areas. “The close physical proximity to customers and the current trend (decline) of the U.S. dollar as opposed to foreign currency have also made future of domestic sourcing more attractive.”

Outsourcing some of its activities to RSI allows Clarkston to remain competitive and deal with market cost pressures, while maintaining its high standards for performance, value delivery and customer satisfaction. “It also allows our consultants to focus on the delivery of high-value and high-margin services, still allowing us to fulfill our customer’s total needs,” adds Plummer.

Case for Rural Offshoring

Offers better economies of scale Helps cut costs further Works as a good hub-and-spoke model, with big cities being the hub Option to retain work within the geography by rural insourcing Less attrition Helps accommodate peak workloads in sync with operations in big city.

However, that does not mean that offshoring has stopped. In fact, big suppliers of offshore services in places like India, Philippines and East Europe are already looking at tapping tier 2 and 3 cities in their countries, and even go further in to villages to provide services at competitive rates. For instance suppliers in India such as Genpact and 24/7 Customer see it as a viable option and have moved to smaller cities but are yet to go further in to the villages. However, other suppliers such as Sai BPO and HOV Services have farmed out some of their tasks to rural areas. Experts call it a hub-and-spoke model where big cities house the corporate headquarters and the higher end delivery centers while the rural areas are engaged for the routine customer assignments. Behind the move to the villages is a compelling business model.

“The real estate cost is 25 to 30 percent cheaper, employee wages are at least 20 percent cheaper in the villages compared to the big cities and even tier 2 destinations. Hence it makes eminent sense to shift basic tasks like data entry, image editing work to rural areas,” explained Vijay Raj, Group Operations Manager, Sai BPO.
Sai BPO has 200 of its 400 employees in rural areas in South Indian states of Kerala and Tamil Nadu. It plans to increase its rural operations, but says that much will depend on how comfortable customers are to outsource to such areas. Other companies in India may seriously look at this opportunity to offer further cost savings
to buyers of services. The recent annual Indian government budget proposed a greater penetration of broadband in small towns and villages and this could catalyze the trend to move to remote areas for the supplier of offshoring services.

“Customers are usually particular about cities where their work is being done. Big cities are becoming expensive and rural areas provide a good alternative, but doing high-touch customer processes in remote areas can be a challenge. Also, getting good managerial staff in small cities or rural areas can be tough. But it’s a good option for routine, low-level tasks like data entry and maintenance work,” said a BPO company’s senior executive.