Profits for People

The business opportunity that Profits for People has currently identified is to provide outsourced back-office services, specifically, data entry and conversion. Under the unique co-investment model, the rural youth will not just be employees but active stakeholders (receiving a share of the profits) with a vested interest in the success of the venture. The proposed co-investment business will be set-up in the Trichy District in the south Indian state of Tamil Nadu.

Gartner Research defines back-office outsourcing as "the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administers and manages the selected processes based on defined and measurable performance metrics”. While such outsourcing includes a wide array of processes, Profits for People will initially focus on data entry and data conversion services.

Profits for People will specialize in data entry services and forms processing for a multitude of clients –contracting work from both larger outsourcing firms as well as directly from clients who seek to outsource such services. The typical work-flow would involve document scanning (both on-site and off-site), and data entry through key-from-image method .

Some examples of BPO services offered by profits for People are as below:

- Data Entry (Entering numeric and alphanumeric data from paper/image-based format A wide array of businesses from telecom companies to law firms which need to process paper based documents)
- Digitization services - OCR and Scanning (Scanned images of paper documents and processing Optical Character Recognition (OCR) forms Academic journals, survey research companies, etc.)
- Data cleanup in scanned documents to remove unwanted entities

Revenue Model

The Profits for People revenue model is based on data entry and conversion contracts with two major client groups – larger back-office firms within India (70 percent of the revenues) and small businesses in US/India (30 percent of the business). Typical contract sizes would range between $50,000 to $100,000 and Profits for People hopes to formalize at 15-20 contracts in the first year. Seventy percent of the profits realized will be shared with the co-investors, in the form of both salaries and dividends, while the remaining 30 percent will be retained by Profits for People.

There are two key market segments that are targeted by Profits for People:
• Larger back-office firms within India
• Small businesses in US, Europe and India

Larger back-office firms within India

Larger back-office firms within India are expected to contribute 70 percent to the revenues of Profits for People. These larger firms will benefit from reduced costs, a steady and reliable source of manpower, reduced attrition rates and an opportunity to adopt ‘socially responsible’ practices by outsourcing their work from Profits for People.

Small business markets

While small businesses are also keen in outsourcing the data entry needs, they are not in the radar of the large outsourcing firms. This void in the marketplace provides a lucrative business opportunity to provide high quality, low-cost service to small businesses. This market also potentially includes academic institutions and government agencies.

Profits for People is currently seeking clients by reaching out to the numerous larger back-office firms within India. Potential clients are surveyed to understand their interest in rural back-office, which is followed up by a sales pitch.

Managing Attrition

The members of the rural back-office co-investment business are unlike traditional back-office employees. It is a source of livelihood, and they are not just employees receiving a salary, but also co-investors receiving a share of the profits and thus have a vested interest in the success of the venture. Thus, Profits for People will be able to minimize the level of attrition as compared the large back-office firms

Reducing Costs

Members in rural areas are ready to work for wages one-third of their urban counterparts. Thus, by partnering with Profits for People, back-office firms can improve their profitability and counter the threat from other low-cost locations.

Anupreet Sethi, co-founder, has five years of experience in the technology sector, working at the IT division of major wall street investment bank and has unique insights into the working of the back-office markets in India. She has a Bachelors degree from Columbia University and will be graduating with her MBA from the Stern School of Business in 2007.

Santhosh Ramdoss, co-founder, grew up in a village in Southern India. He graduated from one of the top business schools in India and is currently studying international development at New York University, where he is also a Catherine B Reynolds Foundation Fellow in Social Entrepreneurship.

Enabling the rural educated youth to find sustainable employment opportunities through ownership and operation of co-investment businesses will lead to job creation in rural areas, prevent migration of these youth to cities, create a future generation of rural entrepreneurs, and effectively bridge the digital divide.

Job creation - Reducing unemployment and under-employment among rural youth.
Avoid migration to urban areas - The youth stay in their villages and towns. Less burden on the failing urban infrastructure.
Creating rural entrepreneurs - Stimulate the rural economy by creating more jobs
Bridging the digital divide - Providing access to information to the rural communities, through the Internet

By measuring these outputs, Profits for People creates $12 worth of social value for every dollar of investment

Qualitative Social Benefits

Economic empowerment of rural youth has a wide range of social benefits many of which are not quantifiable. Some of such social benefits are as follows:

Education: Profits for People model will be a testimony to show that education does enable youth to earn a livelihood. Profits for People co-investors will be role models for the younger generation and motivate them to attend school

Bridging the gap between the rich and poor: There exists a huge disparity between the have’s and have-not’s in India. According to UNDP the richest 20 percent of the population have close to 50 percent share of income or consumption. Efforts like Profits for People are steps in the right direction to bridge this gap.

Sanitation & Hygiene: Improved standard of living through economic empowerment will ensure access to better sanitation. This will reduce the occurrence of diseases.

Participation in Local Governance: Improved economic status will enable the rural youth to have a stronger say in the village governing body. People also will feel empowered and confident to question the actions of those who are in power.