Knowledge process outsourcing (KPO) is a component of the traditional BPOs. This sector emerged to meet the need for outsourcing the information-based processes. This article examines the growth potential of the industry and the need for KPOs.

knowledge process outsourcing

Many developed countries are facing a shortage of specialized professionals to handle the knowledge-based functions in domains such as engineering, finance, research and development, and medicine. This attracts the organization to look for skilled talent in other destinations and this is the prime driver behind the growth of knowledge process outsourcing. The technological advancements in the field of cloud services and big data analytics are expected to fuel the growth further.

By 2025, the KPO market is estimated to touch $124.29 billion and India is emerging as the central hub of the global KPO industry. Genpact, Evalueserve, Ugam solutions, Pangea3, and Customer TechBook are some of the leading KPOs of the country.

What is knowledge process outsourcing?

KPO deals with the outsourcing of business processes that are connected to information. It is a method of outsourcing the activities that involve knowledge to achieve efficiency and save resources and cost.

KPO companies deliver value to the business by providing a skilled workforce with the right knowledge and experience required to handle the information-intensive processes. The common knowledge-based services companies outsource are research and development, learning solutions, business and market research, intellectual property research, data analysis, business and technical analysis, and legal services.

The KPO delivery model

The popular KPO delivery models are captive KPO, third-party KPO, and joint venture KPO.

  • Captive KPO models involve dedicated operation centers set in the areas of high talent and lower costs. These centers work only for the requirements of its parent company.
  • The cost of operating captive centers is high and third-party KPOs are excellent alternatives. Here the projects are outsourced to unaffiliated vendors providing the advantage of flexibility and customization.
  • The joint venture KPO model establishes partnerships with local companies to have control over the local operations.

Different business situations would require different delivery models. In situations where data security and control over operations are important, companies might prefer the captive model. However, those situations where flexibility and economy are prime considerations a third-party KPO model is recommended.

Though most of the KPO companies in India are captive KPOs, as the market grows it is expected that the third-party KPO model would attain a significant share of the industry.

Why do you need KPO?

The question is best answered by examining the benefits of knowledge process outsourcing.

  • Knowledge-based processes require high skill levels which are difficult to maintain in house. Usually, the processes require professionals such as MBAs, lawyers, CAs, doctors, PHDs, etc. Training and hiring talent for these processes involve huge overhead expenses. The dynamic market also requires continuous and rigorous training for professionals. Besides, the required talent might not be available in certain geographies. KPOs have a rich pool of diverse talent that can be leveraged for the project immediately.
  • Outsourcing makes better business sense as the companies can divert the resources for core activities and also save time. This improves organizational productivity.
  • The overhead expenses for talent acquisition and establishing the required infrastructure are reduced considerably. KPOs are cost-effective solutions to executing intellectual tasks like research, analysis, and decision making.
  • The KPO service providers come with proven expertise in their domain. This helps the companies to leverage on the third party expertise and enjoy higher ROI. KPO services cover complex processes such as analysis and reporting. These services enable organizations to make data-driven decisions and arrive at actionable strategies. KPOs also help in data mining and data warehousing.
  • KPOs give flexibility and scalability to the business. Hiring and firing qualified professionals are according to the business cycles is not a sign of a credible organization. With a KPO the companies can leave such worries and utilize the skilled workforce of the service providers.

KPOs provide knowledge expertise rather than process expertise. India with its vast talent pool of doctors, lawyers, CAs, engineers, and analysts has immense potential to position itself as the preferred KPO destination for the world. India also offers substantial cost-saving advantages and a favorable regulatory framework.

SBL is an established KPO company in India with a proven ability to handle the knowledge-oriented processes of domains such as accounting, finance, law, medicine, research, management, and consulting. We provide accurate and cost-effective solutions with tight adherence to SLAs for delivering exceptional value to our clients.

We would be happy to handle your knowledge-based processes. Get in touch with us today.