December 2020 - The Bharat Connect

Zoho is leading the pack in moving to Tier – 2 and Tier – 3 cities. What can you learn from them?

Zoho has been running their development and support centers from Tier-2 and Tier-3 cities for many years ago.

They started a development center in Tenkasi in 2011 that develops some of Zoho’s products that they sell across the world. Tenkasi has about 500 Zoho employees. Zoho then established a customer support center in the town of Renigunta in Chittoor District, Andhra Pradesh. 120 Zoho employees work out of Reningunta.

Zoho calls these offices Village Offices.

Zoho and village offices

Zoho, just like any other organization, was forced by the pandemic to move their entire workforce to their homes and hometowns. During this time, Zoho ran an internal survey, and close to 40% of their workforce – around 3500 people – said they would like to work closer to their hometowns.

This sped up their village office move. Currently, Zoho is experimenting with ten villages in Tamil Nadu, where 200 of its engineers – 20 in each village – will collaborate and build software for the world.

Once this is set in motion, Zoho has plans to implement a similar model in two villages in Kerala and one in Andhra Pradesh. They are also looking at taking this model to Mexico (Queretaro), the US (Austin, Texas), and Japan.

We are sure that Zoho will successfully implement this model. This would be an example for anyone looking at setting up a satellite office in the villages and Tier-2 and Tier-3 cities.

What are the advantages of this model?

All along, Tier-I cities have been glorified. Your employees want to stay in their hometowns, and work is an eye-opener for most organizations. I guess that is something that every organization should run as a survey and figure it out.

The most prominent reason organizations were flocking the Tier-1 cities was infrastructure – uninterrupted power supply, Internet, transit connectivity, accessibility of airports; and qualified resources.

Now, most infrastructure challenges are addressed even in remote villages. Most locations in places like Tamil Nadu have accessibility to the airport within 100 Kms.

All of the challenges for which organizations were focusing on Tier-I cities are addressed now in most villages. Hence, the move to Tier-2, Tier-3, and villages would make a lot of sense.

Some of the advantages of moving to villages include:

Look at the cost of infrastructure between Tier-I and the village offices. Organizations would easily hive off 50% of their expenses. What about resources? Their standard of living would go up many notches while reducing their cost of living.
Working from hometowns can help people maintain greater work-life integration. They can meaningfully contribute to their villages’ growth by volunteering in community activities, agriculture, and education. Staying with family and staying closer with friends and relatives would also ensure better mental health.
Increase the disposable income of people in the villages by indirectly helping build the economic ecosystem to support your office and its people. This can also help in reverse migration from cities to villages.

What can we learn from the Zoho model?

Zoho has proved that this model works favorably for them since 2011. They have been successfully building world-class products from a facility in Tenkasi and have been supporting their global customers from a facility in Renigunta.

They have now started ten satellite offices in 10 different villages in Tamil Nadu and have operationalized it successfully.

While they were skeptical about moving to Tier-2 and Tier-3 cities, most other organizations were forced by the pandemic to figure out work-from-home and work-from-hometown options. They continued to provide world-class services and products even from remote locations.

This proves that this model works, and every organization should take efforts to move their needles towards villages. This would help the organizations cut costs, leverage skills available in remote areas, help employees have better work-life integration, and grow the villages.

The growth of this nation lies in the development of its villages. The future of work lies in the village offices.

It is time to think smart and help the village economies prosper. It is in your selfish interests to do so as well.

How do you create your customer experience strategy?

Recently, I called up our service provider, who developed and hosted our website. We have been working with them for the past three years. They didn’t update the site’s SSL certificate, and people couldn’t access the site.

All we wanted them to do was to download the SSL and install it. But, we were told that their system administrator is available only later in the night, and they can get it resolved only after a day.

The website not being accessible was a complete ‘NO’ for us. So, we requested them to get it resolved immediately. The response from them was that it wouldn’t be possible.

So, we took it up, and we did the installation ourselves.

What were the issues here?

Employees who did not understand our needs.
The expectation that we would be willing to wait a day for a simple but critical request
Unresolved issue

What would you do with this kind of experience?

Naturally, we have started evaluating other vendors who can provide this service.

How do you get your customer experience strategy, right?

Customer Experience (CX) is the result of every interaction a customer has with your business, pre-and-post-sale. This can be from the moment they read about you in a blog, their visit to your website, their interaction with your sales, product teams, customer service, and support.

While evaluating your customer experience strategy, you should include all your departments and not just your customer-facing roles.

Some pointers in figuring out your customer experience strategy:

Look at your customer support function and look for metrics like Net Promoter Score, customer satisfaction score, and customer churn rate. If you’re scoring below expectations, this would be a good starting point to dig deeper.
Create a customer journey map. It would outline all the interactions between a customer and your business, including any challenges found along the way.
Once you understand where you ought to improve, share this information with your team and train them to handle the service better.
Map out the different ways your customer would feel about their interactions with you. Always act towards delighting your customers and in their best interests.
Do proactive customer service by enabling your customer success teams to work closely with your customers to prevent issues, enhance adoption and business value.
Ensure that you have self-service tools, as customers prefer to get their basic needs addressed with chatbots and knowledge bases.
Continuously collect feedback from your customers. Never leave a customer without interaction for more than six weeks.
Track the performance of your customer service and support teams regularly.

These are good starting points that would allow you to define your customer experience strategy and vision. With this in place, you can proactively and progressively keep improving the customer experience function for your customers’ benefit and delight.

The next level of call center growth lies in Tier-2 and Tier-3 cities.

India has been the preferred back office of the world for many decades now – skills availability, mature processes, low-cost, and the ability to scale are some reasons. Most large corporations outsource their customer service, support, and experience functions to India.

In the last few years, the low-cost nature of call centers in India has vanished because of the maturing market and high input costs on human resources, infrastructure, and utility infrastructure. This has prompted businesses to move their call center operations to locations like Philippines and Vietnam. The cost structure in the Philippines is 30% lower compared to India.

The Tier-I locations in India shouldered the entire services agenda until about the mid-2010s, which added to the call center’s cost structure. Towards countering competition from countries like the Philippines, the Indian call center industry in the last 5 to 8 years have started looking at Tier-2 and Tier-3 cities to move their workforce. Currently, about 10-15% of the workforce works from Tier-2 and Tier-3 facilities.

National Association of Software and Services Companies (Nasscom) says that 70% to 80% of the call center employees work from home, due to the COVID-19 pandemic. It’s probably the largest work from home project, anywhere in the world.

This means that most people are currently working from Tier-2 and Tier-3 cities, as they have moved to their home towns that are the hinterlands of every state in India.

The COVID-19 forced work from home, and satellite offices strategy would help the industry in the long-term. It would allow organizations to become competitive and help them retain and recruit the right talent due to its flexibility and quality of life.

Work from home

Initially, it was a reactive response that every organization followed when the lockdown was announced by the end of March 2020. Once everyone understood that this isn’t going to end soon, they started putting together processes to make work from home easier for the employees, customers, partners, and other stakeholders.

With almost 80% of the workforce operating from Tier-2 and Tier-3 cities, call centers continued to provide world-class services to their customers. This made them sit up and take notice that they can effectively deliver services from remote locations.

This has prompted several organizations to look at opportunities to move their workforce to Tier-2 and Tier-3 cities. For example, Zoho is experimenting with ten villages in TamilNadu, where 200 of its engineers – 20 in each village – will collaborate and build software for the world. These feeder officers are situated 20-30 kilometers away from their hometowns.

In a recent survey, the company found out that a little over 40 percent of its total employees – around 3,500 people – said they would like to work closer to their hometowns. This would allow people to save more, remain healthy, and maintain a work-life balance. Living close to family and friends is also good for mental health.

Now, every organization, including the call centers, knows that this model is working. It is only a matter of figuring out what percentage of resources will have to be moved to these locations.

The call centers would most likely move between 25 and 40% of their resources to Tier-2 and Tier-3 cities in the next few years.

What are the advantages of moving your call centers to Tier-2 and Tier-3 cities?

Cost savings – 20 to 30% compared to a Tier-1 location, due to lower facility costs and compensations.

Lower attrition – 20 to 25% lower attrition compared to Tier-1 cities. This would result in better service delivery and lower hiring and training costs.

Better standard of living – less traffic congestion, better health, and better quality of life leading to improved living standards

Happier employees – available for the elders in the families who are not very comfortable moving to Tier-1 cities

Location agnostic – you can hire any talent who is right for your organization without having to worry about whether they are willing to relocate to your location. This also brings in diversity and inclusion by moving work to the workforce.

Moving to Tier-2 and Tier-3 cities is not about setting up physical offices at each of the locations. Instead, it would be about setting up satellite offices in those cities, besides letting their employees operate from their homes.

The most significant challenge is the organization’s ability to scale when it comes to technology, to accommodate multiple satellite offices, and work from home resources.

Cloud-ready technology

Most call centers still function using on-premise technology, and they connect to them using VPN from remote workspaces. This would make it prohibitively expensive for call centers to operate.

The easiest way by which they can promote satellite offices and gain all the advantages associated with it is by moving towards cloud infrastructure for their technology needs.

There are available software bundles, which can help migrate your entire call center to the cloud. So, choose an appropriate option, and you are good to go with your migration to Tier-2 and Tier-3 cities.

Conclusion

While the pandemic has created a lot of havoc, it has also pushed organizations to optimize their costs and resources. This has paved the way for moving work and resources to Tier-2 and Tier-3 cities.

This migration, we believe, will be good for the industry in the long run. It would make the industry move towards a truly global workplace, without worrying about real estate costs, lifestyle challenges, and general living standards.