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The Rediff Interview/Sriram Raghavan, Co-founder & President, Comat Tec
An amazing story of empowering rural India
February 18, 2008
The new breed of India's best innovators is set to take the world by a storm. Young, intelligent, and ambitious these dynamic entrepreneurs might well conquer the world with their innovative ideas, products and services.
rediff.com brings to you a special series on India's best innovators and entrepreneurs, winners of the latest Nasscom Innovation Award 2007.
A successful social entrepreneur, he has built a remarkable business model that is transforming the lives of millions of people in rural India. As the co-founder of Comat Technologies, leading provider of e-governance solutions, Sriram Raghavan initiated the concept of rural business process outsourcing units and rural business centres.
"Last year, we served nearly 75 lakh (7.5 million) rural customers and currently provide government and business services to over 10 lakh (1 million) citizens per month," says Raghavan, who is also an advisor to the Government of India on strategic initiatives for the rural sector.
He believes that India is a land of young entrepreneurs and it is important to empower the youth. Comat passes on the benefits of information technology to rural India with business centres and BPO projects across the country.
The company has bagged contracts to set up rural business centres in Uttar Pradesh, Uttarakhand, Haryana, Tripura and Sikkim.
One of the firm's most remarkable projects in Karnataka, Bhoomi involved digitization of over 20 million land records benefiting nearly 7 million farmers.
Raghavan takes you through Comat's exciting journey through rural India in an interview with Assistant Editor Manu A B.
What won you Nasscom's prestigious award for innovation this year?
Comat provides easy and affordable access to information-based government and business services in rural communities in India through our Rural Business Centres (RBCs). Rural citizens dealing with the governments do not receive services they are entitled to, and have limited or no choice for financial and educational services.
We have found three innovations to solve these fundamental problems.
Use technology to de-skill complicated tasks: Modelled after the best practices of user-friendly designs, we have created a much simpler interface for operators.
Identify corporate partners who will use the center to deliver services through the center using their own personnel: For e.g., a fertilizer company that markets fertilizers and offers advisory services to farmers.
Identify high revenue activities for the computer platform in kiosks during off-hours: We currently deliver checque truncation services for US banks.
How long did it take to develop the award winning rural business centre? How does it work? How many people are benefited by this?
In Karnataka, nearly 800 RBCs were made operational in six months under the Nemmadi project. Last year, we served nearly 75 lakh rural customers and currently provide government and business services to over 10 lakh citizens per month.
Ever since the start of this project in October 2006, there has been a 30 per cent increase in the demand for government services in Karnataka.
How difficult was the task? What hurdles did you face? How do you ensure connectivity in rural areas?
We faced a few major hurdles like human resource and cash management, working with multiple layers of the government, finding good investors and handling customer expectations.
We have put in place innovative technological mechanisms for tracking employee attendance, grievance management and tracking of cash.
Connectivity is VSAT-based. We have found this to be most reliable so far.
What are your views on innovation in India? How important is innovation for a country like India?
I have come across a lot of innovation across the globe -- both good and bad. Innovations in pubic policy and in ways NGOs (non-governmental organisations) function are encouraging. Unfortunately, there is also innovation in corruption and ways of breaking set processes and protocol.
As the economy progresses and younger minds become more aware, further innovative thinking will be spurred. I am also looking forward to alternate sources where innovation can spring from SMEs, rural citizens and young entrepreneurs, rather than from traditional strongholds like universities.
What are the major rural projects Comat is working on?
We are focussing on starting RBCs in other states. We have tied up with coaching centres to provide CET (Common Entrance Test -- for admissions to engineering and medical colleges) coaching to students in rural Karnataka. Training from Bangalore will be beamed live through satellite using broadband connectivity across Nemmadi centres. CCNA (Cisco Certified Network Associate) training for over 70 students is being carried out at 12 centres.
Medical transcription and English language training are planned to be rolled out shortly. We also plan to introduce other vocational and employability courses in the future.
Among financial services, we plan to facilitate a collection of premiums -- RBC to be a channel providing easy access to existing consumers. RBCs can be a collection centre for remittances and disbursing payments. Issuing agriculture loans to farmers is also in the pipeline.
What is the status of the rural BPO project?
We are currently doing cheque-processing work for Orbograph, a United States-based firm from our centers in and around Mysore. Plans are afoot to provide rural BPO services under medical transcription as well.
Tell us about some of the successful rural projects? How was the experience of the Bhoomi project? How many states has Comat covered so far?
Bhoomi in Karnataka involved digitization of over 20 million land records benefiting nearly 7 million farmers in the state. Computerised records are now available over the counter in all Nemmadi centres for a standard fee.
We now provide nearly 40 different government and business services to rural citizens in Karnataka. Government services include caste, income, birth, death, residence certificates, old age pension, horticulture and sericulture online application, et cetera, bill payment, bus ticket booking, mobile top-up, etc.
Comat has bagged contracts to set up rural business centers in Uttar Pradesh, Uttarakhand, Haryana, Tripura and Sikkim. We are planning to expand our reach to Gujarat, Tamil Nadu, Maharashtra and Madhya Pradesh as well.
What was the inspiration to start this company?
Comat was inspired to be formed by a mentor who returned from the US and encouraged young people to become entrepreneurs. Once the path was set to form an entrepreneurial organisation, the work of doing government projects to help citizens became a cause, a mission and a business.
What kind of hurdles did you face when you started your company? What are the challenges that you face now?
All the usual constraints and roadblocks -- like, capital, market acceptance, and long gestation periods. . . since we worked a lot with the government. We have matured over the years and will learn as we go along.
Could you tell us about your company's growth over the years? What is your staff strength now? Do you plan to hire more people?
Comat has seen a lot of growth over the past two years, financially and in employee strength. Currently, we have nearly 300 employees on-roll and more than 3,000 employees on contract. As we expand into more states, plans are in place to hire a lot more employees.
Most people find finance a major constraint. How was it for you?
It was initially a huge challenge to educate investors about the viability of our business model. Today our strategic investors include industry leaders like Intel and Hughes.
How do you like the role of an entrepreneur? Do you think India needs more entrepreneurs?
India is a land of entrepreneurs. But, the entrepreneurial environment is severely constrained by basic access to capital and a regulated environment. If these are set then many more potential entrepreneurs in hiding will come to flourish.
Could you explain the reasons for your success?
Success is work in progress. It's a journey and not an end. My success is tied to the success of my company.
What would be your advice to budding entrepreneurs in India?
Most young entrepreneurs are facing credit constraint. Therefore it's important for young entrepreneurs to be doing what they do best and to build a support team and concentrate on few things rather than taking on too much.
What do you think about the quality of talent in India? Are you facing a shortage of talented people?
We have been considerably lucky in drawing talented employees. Our attrition rate has always been lesser than the industry average. Through the Nemmadi project we have generated nearly 1600 new jobs in rural areas, of which more than 400 are women and nearly a 100 are differently-abled. Former Karnataka chief minister Kumaraswamy has himself recommended many candidates to us through his Janata Darshan programme.
What are your company's future plans? Where do you see the company five years from now?
Over the next few years we plan to scale to 10,000 telecenters and expand to new regions across India. We also plan to vertically expand service offerings through our centers. We are aiming to establish ourselves as the largest player in the privately run rural telecenter model and to be seen as a successful for-profit social enterprise with an efficient and scalable business model.
What are your views on the Indian IT sector?
The Indian IT sector has evolved through stages. There was a big upswing and then came a plateau, et cetera. I think it is now time for the IT sector to evolve into servicing the Indian consumer. IT companies will begin to move beyond software and hardware and begin to use technology to meet price points of Indian customers.
Indian companies focus more on services than products. How important is a product-based innovation?
We are primarily a service economy and so we always look towards decreasing costs and increasing efficiency. Product-based innovation is important and large scale players should concentrate on this.
Why are Indian firms not as good as Western ones at product innovation? What could be done to address this issue?
It's not right to say Indian companies are not as good as Western ones in terms of any innovation. We must understand that necessity is the mother of all invention. India has always been a labour-rich country and so product-based ideas did not set in. With less manpower, Western companies were compelled to innovate. However, India also now needs to concentrate on product-based breakthroughs to compete with the global market.
Do you think that the industry's boom can be sustained in the wake of a US slowdown?
The US economy is much too resilient, and probably after the elections will see an upsurge. The current slowdown is also not affecting the larger firms very much as it might some of the smaller tier-II and tier-III companies. The Indian IT sector is still much coupled with its US counterparts.