Knowledge Process Outsourcing (KPO)

July 5, 2008

After the success of Business Process Outsourcing (BPO) now companies are considering Knowledge Process Outsourcing (KPO). In BPO noncore business processes are removed from the overall business process value chain, outsourced to low cost destination and finished service integrated back into the value chain. Labor arbitrage is the main reason for companies to outsource their noncore business processes. Generally the success of a BPO project is measured by predefined parameters like time to delivery, quality, cost saving, and productivity are specified in Service Level Agreement (SLA).

KPO is fundamentally different from BPO; in KPO core businesses processes are outsourced to offshore locations where highly educated professionals perform the KPO tasks. KPO is not sending away noncore business processes to offshore locations and make the employees work on core business processes. KPO is sharing the core business processes to professionals located different locations like offshore, onshore, and nearshore locations and performing it in a shared manner. Highly educated professionals found in different parts of the world working in KPO projects collaborate regularly to perform the tasks.

According to Gartner Research group until now India has been a market leader in BPO, enjoys 80% of overall BPO projects that are outsourced to offshore locations. Similarly in KPO market Indian based KPO providers are expected to capture major portion of it. After the success of BPO projects performed in India, now companies in US and UK are looking India for KPO projects. Mostly companies are looking to offshore KPO projects either through their own captive centers like IBM, and Accenture or through offshore partners like Infosys, TCS, and Wipro.

Knowledge Process Outsourcing

Access to specific domain expertise like Pharmacy Research, Medical Services, and R&D Engineering is the main cause for the current and future growth of KPO. However following are the key questions that must be answered:

  • What is a knowledge process?
  • How is it different from a noncore business process?
  • How innovations occur and who owns it?

These are some of the fundamental questions that will be answered in a series of blogs on KPO.

The KPO market is in early stage, slowly companies are started trying KPO and following are some the markets where Indian based KPO companies will play a major role.

Financial Analysis & Research
Software Product Development
Legal Process Outsourcing (LPO)
Engineering Research & Development (R&D)
Medical Services
Creativity & Animation
Education Process Services (EPO)
Higher-value Finance & Accounting
Pharmacy Research & Development (R&D)
Market Research & Business Intelligence
High value Tax Services


Comments

8 Responses to “Knowledge Process Outsourcing (KPO)”

  1. KPO Knowledge Process Outsourcing | Outsourcing Insider on August 26th, 2008 7:34 am

    […] are now considering Knowledge Process Outsourcing (KPO) after the success of Business Process Outsourcing (BPO). According to the UK’s National […]

  2. Impact of US Financial woes on Indian Outsourcing Industry | Outsource Portfolio on September 24th, 2008 12:57 pm

    […] are climbing the outsource value chain from low value commodity outsource services to higher value (KPO) outsources services. In fact, C.K. Prahalad and M.S. Krishnan written a book about the future of […]

  3. Growth of Knowledge Process Outsourcing (KPO) | Outsource Portfolio on December 30th, 2008 7:02 am

    […] BPO vs. KPO BPO is fundamentally different from KPO; in BPO mostly noncore business processes are outsourced to offshore locations. But in KPO core […]

  4. Mario on January 19th, 2009 6:53 pm

    Congratulations for your web page!!

    Together with a group of friends from the City of Monterrey, Nuevo León, México we have begun a KPO project (we began almost 1 year ago). Particularly we are interested in (i) Legal/Collections Call Centers (beginning 20 persons) (ii) Architectural Outsourcing Services (we are working in an AOS Club) and (iii) Recrutiment Process Outsourcing. We have the support of a private capital fund from our city (I am also a partner with the Law Firm Santos-Elizondo–www.santoselizondo.com).

    We will be launching our web page this coming January. Can you provide some comments regarding where and how to begin looking for clients; do you know of a sales agent(s) we could speak with. Our target during 2009 is to close 2 collection call center contracts, begin the relationship at least with 2 architecture firms, and to help 1 company in RPO matters.

  5. sapience on October 6th, 2009 6:46 am

    KPO core businesses processes are outsourced to offshore locations where highly educated professionals perform the KPO tasks.
    KPO is sharing the core business processes to professionals located different locations like offshore, onshore, and nearshore .
    neeraj

    hallucionating sapience

  6. Mickel on April 21st, 2010 5:45 am

    The growth of KPO market is a major growth opportunity for the vendor. There are many reports available in the market which guide companies to take advantage of the full potential of KPOs. It also represents the next step of evolutionary chain in outsourcing market. As the IT sector had resulted in the growth of BPO, so the success of BPO industry has led to the growth of KPO.

  7. Outsourcing Providers Philippines on June 17th, 2010 2:34 am

    Clear, concise, and informative. Thanks for the helpful sharing! KPO is gaining wide acceptance as the benefits for companies that outsource are becoming enormous. Major KPO services include financial research, market research, life sciences research, legal research and analytics. The KPO industry is expected to enjoy rapid growth in the near future.

  8. Sayuj on October 26th, 2010 5:18 am

    The article is simple, easy to understand and informative as well. In addition to the growth in business for BPOs and KPOs, there is significant increase in the quality of work that is being sent to these BPOs and KPOs. At my company ( http://www.sddglobal.com ), the off-shore legal outsourcing (LPO or legal KPO – knowledge process outsourcing) services we provide compare favorably with much of what attorneys produce at high-quality law firms in the West. This type of growth in KPOs also requires involvement of more qualified and trained professionals from various fields. Our services are managed on-site by a reputable American law firm, and supervised by a team of U.S.-licensed attorneys who have been practicing at the top of their fields. This gives our clients both quality assurance and accountability. Also, when corporations and law firms outsource legal services to our company, the work is done by top law graduates, experienced lawyers, and/or former law professors from some of the best companies, law firms and law schools in India.

    Sayuj Banerjee

    http://www.sddglobal.com

    high-end legal outsourcing

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