Knowledge Process Outsourcing – KPO

Narendra Kumar

11 Dec, 2020

In Knowledge Process Outsourcing (KPO) knowledge- and information-related work is carried out by a subsidiary of the same organization or by workers in a different company and this subsidiary may be in the same country or in an offshore location to save costs or other resources. This Knowledge process outsourcing (KPO) sector is concerned with the allocation of high-level tasks in a different geographic location to an outside organization.

In the case when having a shortage of skilled professionals and have the opportunity to hire skilled workers earning lower wages in another location for a lower overall cost, companies resort to knowledge process outsourcing.

Knowledge Process Outsourcing (KPO) consists of long-term jobs for intellectual, analytical and knowledgeable people in industries such as research and development, financial consultancy and services, business and technical analysis and many others.

Knowledge Process Outsourcing (KPO) in the form of outsourcing knowledge-intensive activities such as data-driven and the process of gathering, managing, analyzing and delivering objective insights into businesses.

KPO services are classified into following kinds of services:

• Data Analytics
  

Across industries addressing business problems and domains to empower organizations with actionable insights through cutting-edge data analytics.

• Market Research
  

For accurate answers to the business questions providing research services and strategy consulting.

• Global Reporting and Performance Management
  

To achieve operational excellence and productivity, providing efficient reporting and performance measurement across industries.

• Data Management
  

Efficient solutions for data integration, storage, retrieval and sharing for robust business reporting and analytics as required by various stakeholders.

Achievement of objectives highly depends upon the skills, domain knowledge, and experience of the people carrying out the activity in the knowledge process. It is known as Knowledge Process Outsourcing when this activity gets outsourced.

Mainly component of Business Processing Outsourcing (BPO)^[1], Research Process Outsourcing (RPO) and Analysis Proves Outsourcing (APO) involve in Knowledge Processing Outsourcing (KPO).

KPO provides advanced analytical skills and business expertise rather than process expertise only. Other than the BPO Industry, this industry is handling more amount of highly skilled workers. BPO is about the size, volume and efficiency whereas KPO derives its strength from the depth of knowledge, experience and judgment factor.

In the global outsourcing scenario, it is the evolution of the Indian BPO sector which has given rise to Knowledge Process Outsourcing (KPO). Due to the success of many overseas companies in outsourcing business process operations has encouraged many of the other companies to start to outsource high-end knowledge-related work.

In outsourcing high-end processes to India, underlying expectations are cost savings, operational efficiencies, and access to a highly skilled and talented workforce and improved quality.

This KPO sector has high potential as this KPO sector is not restricted to only Information Technology Enabled Services (ITES) sectors and other sectors such as Legal Processes, Intellectual Property, and Patent related services, Engineering Services, Web Development, Business Research, Legal Research, Clinical Research, Publishing, and Market Research.

The main focus in today’s competitive environment is to concentrate on core specialization and core-competency areas and outsource the rest of the activities. Many companies have realized that by outsourcing activities, it helps in minimizing the cost and efficiencies are improved also the improvement in total business because the focus shifts to growth areas of the business activity.

Knowledge process outsourcing (KPO) describes the outsourcing of core information-related business activities which form an integral part of a company’s value chain. KPO requires advanced analytical and technical skills as well as a high degree of specialist expertise.

KPO can be incorporated into the business. Under this, one can outsource some work to gain expertise on a project. The purpose of outsourcing is to develop a different approach. The purpose of KPO is to increase in specialized knowledge and expertise, additional value creation, the potential for cost reductions, and a shortage of skilled labor.

KPO consists of various tasks in relation to the financial modeling of companies, industry analysis equity research and company and sector research, quantitative analysis, and underwriting support.

Difference between BPO & Knowledge Process Outsourcing (KPO)

Knowledge Process Outsourcing involves the outsourcing of core functions which may or may not give cost benefit to the parent company but surely helps in value addition. As compared to BPOs, in KPO processes which are outsourced are usually more specialized and knowledge-based. Usual activities that are outsourced to KPO’s are related to Research and development, Capital and insurance market services, legal services, biotechnology, animation, and design, etc.

Business Process Outsourcing (BPO) involves the operations of specific business processes. BPO company outsource services such as call center, internet marketing, legal services, business consulting, data entry, bookkeeping, and financial services. BPO includes not only calls but it is an organization that receives outsourcing full-fledged activity for another organization not limited to only calls.