Marianne Allison on Source for Change - Open for business
Two main factors set Source for Change apart from the rest of India’s myriad outsourcing service providers. First, it’s located in the small rural town of Bagar, as opposed to a big city with an IT hub. Second, it seeks to create outsourced job opportunities specifically for rural women.
Our site visit to Source for Change sparked a debate within the group about the nature of social businesses. Is it possible for a purely commercial business model to maintain social impact as its top priority? Marianne Allison, Social Innovation Practice Leader at Waggener Edstrom, weighs in on the conversation.
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Employing women and stemming urban migration
Our Journeys for Change team traveled to Bagar in Rajasthan to learn about a project reflective of how pressing problems and emerging market opportunities can come together in India. The initiative, Source for Change (S4C), was originally incubated by the Grassroots Development Laboratory, which is funded by the Piramal Foundation. S4C is aimed at creating work for educated women in rural towns and villages in Rajasthan who might otherwise have to leave Bagar and towns like it to find work in cities like Delhi, Mumbai or Jaipur.
The rural migration to cities is straining urban infrastructure and the opportunities don’t always materialize; in addition to being separated from their families, women often end up in slums or are subject to exploitation in these mega-cities.
That’s the social problem that S4C hopes to address. But the business opportunity is in the growing demand for business process data entry, as the massive amount of paper-based data generated in India, from loan applications to human resources records to marriage certificates, needs to be captured in digital form.
While IT leaders like Wipro and Infosys have built huge businesses around outsourcing commodity IT tasks for a relatively low cost, this type of business process outsourcing (BPO) is becoming expensive for them to do profitably in Delhi, Bangalore and other major cities, where the cost of land, labor and tax burdens are increasing. Similarly, large corporations based in India like telecoms and banks generate massive amounts of data but are straining to manage the costs of doing so in their centers in Delhi and other large cities. According to co-founder Shrot Katewa, the cost structure for a rural BPO can be half that of an urban one. Nevertheless, many companies are starting to outsource their BPO work outside India, to countries like Thailand and the Philippines.
Bringing BPO to rural areas
It’s this convergence of problem and opportunity that prompted Anand Shah, Shrot Katewa and a group of co-founders to convert an initiative originally started just to train women in basic IT skills into a rural BPO for job creation—hence Source for Change. They’ve brought in Biplab Saha, who brings experience in BPO, with the aim to scale beyond Bagar and surrounding villages in Rajasthan to multiple locations in rural India. Today, S4C still functions as an initiative of the Piramal Foundation and employs 50-100 women, depending on the projects in hand, and has generated about USD$333,000 since the start of its operations.
It’s a promising start, and is already capturing the attention of students of social entrepreneurship. But S4C must itself change to fulfill Saha and Katewa’s vision of employing up to 100,000 women in multiple regions in a few years time. While its social goal is core to its existence, the essential tasks ahead are all business: marketing, acquiring and training talent, and building a brand reputation associated with quality, timeliness and customer service. Hence S4C leadership is evaluating their legal structure and business model to best support their future strategic imperatives. While there are some advantages to staying close to their roots as a social benefit incubation, they’re no doubt factoring in that S4C customers are most likely to take a risk on a rural BPO that looks a lot more like a pure business.
Business as usual?
When is a social business “just” a business? Our group has been debating the various ends of the continuum we’ve seen as we visit different projects. My view: that to accomplish its aim, S4C should structure as a business—a values-based business—and mobilize first and foremost around its customer needs.This means quantifying the business opportunity, not just the social one, and articulating business value for their customers,as well as dispelling myths about rural India’s capacity to deliver on work previously associated with city folk. While the social benefit—employing and empowering rural women—is a critical aspect of the S4C story, they won’t scale purely on the back of a “do-good” narrative.
There are countless opportunities like this one in India, and social entrepreneurs need a big toolbox to capture them all. In the future, I expect Shrot and Biplab will be sharpening their business tools to scale Source for Change for greatest impact, and become a success story for rural development in India.
