Rural Sourcing: Bridging the Gap Between Rural Communities and the Global Economy

In recent years, there has been a growing trend of companies looking to rural areas to source their IT and business process outsourcing (BPO) needs. This trend, known as rural sourcing, is seen as a way to bridge the gap between rural communities and the global economy.

Rural sourcing is the practice of outsourcing business processes to rural areas of a country, rather than to urban areas or offshore locations. The idea behind rural sourcing is that it can provide companies with access to a pool of skilled labor at a lower cost than traditional outsourcing destinations, while also providing economic opportunities to rural communities.

The Benefits of Rural Sourcing

There are several benefits to rural sourcing that make it an attractive option for companies looking to outsource their business processes. These include:

1. Cost Savings

One of the main benefits of rural sourcing is cost savings. Rural areas generally have lower labor costs than urban areas, which can translate into significant savings for companies. In addition, rural sourcing can help companies avoid the higher costs associated with offshore outsourcing, such as language barriers, cultural differences, and time zone differences.

2. Skilled Labor

Another benefit of rural sourcing is access to a pool of skilled labor. Rural areas often have universities and community colleges that offer programs in areas such as computer science and engineering, which can produce a skilled workforce that is well-suited for IT and BPO work. In addition, rural workers are often highly motivated and committed to their work, which can lead to higher quality work and better outcomes for companies.

3. Cultural Alignment

Rural sourcing can also provide companies with a cultural alignment that may not be present with offshore outsourcing. Rural communities often share similar values and cultural norms as the companies that are outsourcing to them, which can lead to better communication and collaboration.

4. Economic Development

Perhaps the most significant benefit of rural sourcing is the economic development it can provide to rural communities. By outsourcing to rural areas, companies can bring jobs and economic opportunities to areas that may be struggling economically. This can have a positive impact on the local economy, including increased tax revenue and improved quality of life for residents.

Challenges of Rural Sourcing

While there are many benefits to rural sourcing, there are also several challenges that must be addressed in order to make it a viable option for companies. These challenges include:

1. Infrastructure

One of the main challenges of rural sourcing is infrastructure. Rural areas may not have the same level of infrastructure as urban areas, such as high-speed internet and reliable electricity. This can make it more difficult for companies to effectively outsource their business processes to these areas.

2. Talent Attraction and Retention

Another challenge of rural sourcing is talent attraction and retention. Rural areas may not be as attractive to younger workers who are looking for urban amenities and lifestyles. In addition, once workers are trained and gain experience, they may be tempted to leave for urban areas where there may be more job opportunities and higher salaries.

3. Limited Scale

Rural sourcing may not be a viable option for companies that require a large workforce. Rural areas may not have a large enough pool of skilled workers to meet the needs of these companies, which may make it difficult to scale up their operations.

4. Perceived Risk

Finally, there may be a perceived risk associated with rural sourcing. Companies may be hesitant to outsource to rural areas because they are not as familiar with these areas as they are with urban areas or offshore locations. This perceived risk may make it more difficult for companies to embrace rural sourcing as a viable option.

Addressing the Challenges of Rural Sourcing

In order to address the challenges of rural sourcing, companies must be willing to invest in the infrastructure and talent development necessary to make it a viable option.

• Infrastructure

To address the infrastructure challenge, companies can work with local governments and telecommunications companies to improve access to high-speed internet and reliable electricity. This may involve investing in new infrastructure, such as fiber optic networks and renewable energy sources.

In addition, companies can look for ways to reduce their reliance on traditional infrastructure by using cloud-based software and tools that can be accessed remotely. This can help to overcome the limitations of rural infrastructure and make it easier for companies to outsource their business processes to rural areas.

• Talent Attraction and Retention

To address the talent attraction and retention challenges, companies can work with local universities and community colleges to develop training programs that are tailored to the needs of the company. This can help to develop a pool of skilled workers who are well-suited for the company’s IT and BPO needs.

In addition, companies can look for ways to make rural areas more attractive to younger workers. This may involve investing in amenities such as housing, transportation, and entertainment options that are attractive to younger workers.

• Limited Scale

To address the limited-scale challenge, companies can look for ways to partner with other companies to share resources and talent. This may involve forming partnerships with other companies in the same industry or developing strategic partnerships with universities and community colleges to develop a pool of skilled workers that can be shared among multiple companies.

• Perceived Risk

Finally, to address the perceived risk challenge, companies can work to build relationships with local communities and governments to gain a better understanding of the opportunities and challenges of rural sourcing. This may involve hosting job fairs and other events to promote the benefits of rural sourcing and building partnerships with local organizations to support economic development in rural areas.

Examples of Successful Rural Sourcing

Despite the challenges of rural sourcing, there are many examples of companies that have successfully outsourced their business processes to rural areas. One such example is Cognizant, a global IT services company that has established delivery centers in rural areas of the United States, including Iowa, South Dakota, and Texas.

Another example is Infosys, an Indian IT services company that has established delivery centers in rural areas of India, such as Mysore and Mangalore. These delivery centers have helped to provide economic opportunities to rural communities and have enabled Infosys to access a pool of skilled labor at a lower cost than traditional outsourcing destinations.

Conclusion

Rural sourcing is a promising trend that can provide companies with cost savings, access to skilled labor, cultural alignment, and economic development opportunities. However, there are also several challenges that must be addressed in order to make it a viable option for companies.

By investing in infrastructure, talent development, and partnerships with local communities and governments, companies can overcome these challenges and reap the benefits of rural sourcing. As more companies embrace rural sourcing, it has the potential to bridge the gap between rural communities and the global economy, providing economic opportunities and improving the quality of life for residents of rural areas around the world.