Monthly Archives: May 2006

Great ideas catch up soon

Thomas Friedman in his syndicated column in New York Times, recently wrote about the changing face of outsourcing – Outsourcing, Schmoutsourcing! Out Is Over(subscription only, but you can find the same piece in the print version of the Indian Express, 20th May)

In the article, Friedman mentions his recent interview with Ramalinga Raju, CEO of Satyam. Satyam is currently piloting a project in two villages for outsourcing non-voice BPO work from rural areas. The project is expected to expand to 150 villages.

This emerging trend stands to prove that the ProGreen BPO cooperative is a viable proposition. Not only does it address many of the key issues face by the BPO sector, liking rising employee costs and high attrition but it also effectively addresses rural poverty.

I guess its just a matter of time before rural outsourcing becomes mainstream in India. Great ideas catch up soon.

ProGreen is hoping to pilot its project within the next one year!

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Will Social Entrepreneurship work?

We are in the final phases of making out investment in the pilot project, at Samudram village in Salem district. The unit will be run by a local entrepreneur, Mr. Velmurugan. It has been almost a year since Mr. Velmurugan first spoke to us. Although the cornerstone of the ProGreen model is to facilitate formation of micro-cooperatives, and not to be involved as a funding agency (a bank or a micro-finance institution is better equipped to do the same), we had to relax those norms, in setting up the pilot project. After repeated attempts, we were met with dead-ends in our effort to arrange a small business loan for Mr. Velmurugan. So, we decided to extend our resources – cash prize from winning GSEC and Imagine Cup.

The other day, I and Mr. Velmurugan were discussing the modalities of setting up the unit. He has been doing quite a bit of research on the local demand for Areca Cups & Plates. The Salem area has a large number small manufacturers involved in producing Areca Cups & Plates. Given that there have been little efforts in developing a sustainable market for these products; there has been significant price undercutting. Mr. Velmurugan was mentioning a recent incident where, initially a supplier had agreed for Rs. 1.20 per plate. Another supplier squeezed in to supply at Rs.0.90 per plate. I know based on the cost structure involved in making these cups and plates, the second supplier should be employing underpaid laborers, working for sixteen hours a day.

My belief in social entrepreneurship revolves around developing sustainable businesses, competitive in the real world, and primarily maximizing the Social Return on Investment. For instance, Mr. Velmurugan has to pay reasonable wages to his employees. His belief in social change through employment generation in his village is as strong as ProGreen’s belief in the model.

So, will the pilot project make in the real world? In this cut-throat world of business, is it possible to make profits as wells as maximize Social Return?

Well, when I, Sara, Anita and Deepak started working on ProGreen, we never believed it was easy. In fact, the tougher it gets, the better it is.

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