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Knowledge Process Outsourcing (KPO) is one step ahead of Business Process Outsourcing (BPO). It started emerging in India around the turn of the century, when the global industries realized that apart from software development and technical support, knowledge work could also be outsourced. It involves transfer of business processes to other geographic locations; specialized domain specific knowledge and business expertise of a higher level rather than just process expertise. The following are the areas associated with the KPO sector.
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Animation & Design Advanced Web Applications Business and Technical Analysis Business & Market Research Data Analytics Financial Consultancy and Services Intellectual Property (IP) Research Learning Solutions Legal Services Medical Services Network Management Pharmaceuticals and Biotechnology Research & Development Training & Consultancy Writing & Content Development
Many companies have started outsourcing their high-end processes like Market Research (MR), Equity Research, Engineering Design, Intellectual Property Rights (IPR), Legal Services, Remote Education and Publishing Operations to India after the success of BPOs. These companies outsource their processes to India for:
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Cost savings Operational efficiencies Access to highly skilled workforce Improved quality
A KPO can provide quality work and on- time delivery with uninterrupted services. KPOs are the next big thing in the outsourcing sector. Initially, KPOs focused on data collection, updating financial models, patent searches and basic data mining. But now KPOs have also started focusing on sector insights, equity research, patent analytics, high end data mining, analysis and recommendation. Some of the hot destinations for KPOs other than India are Russia, China, Czech Republic, Ireland and Israel.
Difference between KPOs and BPOs: We can say that KPOs emerged from BPOs. BPO KPO
It provides services like customer care, • KPO provides in-depth knowledge, technical support through voice processes, expertise and analysis on complex areas like tele-marketing, sales, etc. Legal Services, Business & Market Research, etc.
Philippines.so. . understanding of business and analytical bent of mind It involves skill and expertise of • It employees not. By 2010. China. Indian KPO sector will have 71 percent share of the global KPO sector. contributing around 0. In 2003.qualified workers • knowledge workers with excellent educational as it focuses on communication skills background. Ireland. Czech Republic and Israel are also entering the KPO industry.5 % is expected by Indian KPO sector between 2003 and 2010.78 % by 2010. This figure is expected to reach 1. Russia. A CAGR of 49.72 billion revenue was generated by the Indian KPO industry.24 % to the Indian service sector.• • • High end services Knowledge expertise Requires application. USD 0. Low end services Process expertise Pre-defined processes • • • KPO Sector Outlook The share of Indian KPO sector was 56 percent of the global KPO sector in 2003.
000 people and is expected to grow to 250.000 employees by 2010.As estimated. No of Employees: The industry presently employees 25.5% till 2010. the contribution of the 6 main sectors will be as shown above. The BPO industry will grow globally at a CAGR of 26% and the KPO industry will grow globally at a CAGR of 44. Out of the $17 billion in KPO sector by 2010. the BPO exports will be $20 billion and KPO exports will be $12 billion by 2010. as .
• Engineering and R&D: These include finite analysis. etc.estimated by NASSCOM. The Smart Cube. equity research. Office Tiger. Some of the KPOs working in this area are Wipro. etc. negotiations. Some of the KPOs working in this area are Smart Analyst. Atlas Legal. reviewing transactional & litigation documents. actuarial analytics. corporate & market research. research memoranda & due diligence reports. insurance. technical specifications for tenders. value engineering. 3D conversion and modeling. Manthan Services. computational fluid dynamics analysis. etc. Some of the areas and KPOs working in these areas are: . • Inadequate Intellectual Property Rights (IPR) protection regime in India • Billing rates are higher as compared to billing rates in BPOs Threats • • Supportive government policies Many new areas of specialization are being covered making KPO sector spreading its wings • Consideration to quality standards like ISO 900x and Six Sigma • Billing rates are lower as compared to billing rates in other countries Opportunities • • Increasing domain expertise • Non retention of talent More areas of specialization can be added • Expected labour supply gap as jobs grow to KPOs faster than the workforce. But different research companies have different views about the number of employees in this sector. • Financial Services: These include financial data mining. risk assessment. fund management. prosecuting patents. SWOT Analysis Strengths Weaknesses • • • • • skills Large talented pool Quality IT training Low labour costs Success of BPOs Good knowledge of project management • Immoral and unethical practices related to handling of crucial data • Rising wages • The inability to uniformly develop and provide infrastructural requirements as real estate prices are rising in major cities. debt collection and recovery. etc. Pangea3. • Ample opportunities for SMEs Classification The KPO sector can be classified into 8 major segments: • Legal Services: These include drafting contracts. underwriting.
Evalueserve. • Healthcare Services: These include diagnostic.o o Telecom R&D: Qualcomm. etc. Lucent Technologies. Plexion. Ranbaxy. AstraZeneca. General Motors. proofreading. text composition. Nokia. HP. Baan. . data enrichment & warehousing. etc. digitization of content. o Auto/Engineering: Neilsoft. BMC Software. template designing. SAP Labs. • Market Research and Analytics: These include services like writing & editing. OfficeTiger. pre-press work. Quest. formatting client reports. Avesthagen. conversion of findings to knowledge. Google. CRISIL. etc. Some of the KPOs working in this area are marketRx. Some of the KPOs working in this area are Bayer. GlaxoSmithKline. secondary & primary research. Copal Partners. Delphi. Pipal Research. Yahoo. Biocon. Eli Lilly. Some of the KPOs working in this area are Clingene. drug discovery. etc. etc. Software R&D: Phillips. IBM. Dr. Adobe. Whirlpool. Ericsson. • Writing and Content Development: These include services like content delivery. Microsoft. Path Labs. DaimlerChrysler. Alcatel. HIV & allergy. oncology tests. genetic profiling. research & development. etc. • Pharmaceutical and Biotech R&D: These include clinical research. Inductis. Sun MicrosysteAuto/Engineeringms.
GE. KPO provides domain knowledge and business expertise. Pharmacy. content development. India has highly qualified workers in many sectors like Engineering. etc. But KPOs actually started coming up in India in 2000 when many companies like OfficeTiger. From 2000 to 2005. KPO jobs are more challenging than BPO jobs because other than process expertise. require analytical and highly specialized skills. Gartner. KPOs were in their growing stage. which. K-12. teaching." The companies in KPO sector are proving this statement to be wrong. India became a leading destination for KPOs. in turn. R&D.• Education and Training: These include private tutorials. Biotechnology. Current Scenario "Indian companies are good for BPO only. Let us have a look at the current status of the KPO sector in India. India is the hottest destination for KPOs. Scope of KPO Sector KPOs have evolved from BPOs. curriculum design. etc. UK. And during this duration. etc opened their research centers here. Low wages labour BPOs moving up the value chain Single vendor services . KPOs were introduced in india by McKinsey when it first set up a knowledge center in india in 1987. etc. They are showing the world that Indian companies can handle complex work also. India is emerging as a leader in KPO market because of the following reasons: • • • • • Well established IT services and BPO sector Excellent project management skills Highly qualified professionals Proficiency in English Supporting government policies Some challenges which KPO industry is facing are as following: • • • • Expected dearth of domain expert professionals High attrition rates Talent retention Data security and confidentiality Growth drivers of KPO sector: • • • • Shortage of knowledge professionals in countries like USA.
According to NASSCOM. This is possible as India has the potential to provide cost-effective and quality workforce. And it is expected to reach 71% in 2010. the market share of Indian KPO sector in global KPO market was 56%.000 employees. . In 2003. the KPO sector may only reach $5 billion by 2010 and 100. Along with creating job opportunities for talented engineers. thereby further reducing the supply of skilled people to the KPO sector. Supply gap: According to Rocsearch. India is all set to face challenges and become a global KPO leader. Job opportunities in other sectors are also increasing. India will account for USD 12 billion. Continuous growth is expected in KPO sector in the future as new areas are being added to the existing list of areas of specialization. India will be a key player in this sector. the sector is spreading its wings into different directions which will finally lead to the development of India. According to Evalueserve.000 employees instead of projections of $12 billion market and 250. KPO sector is expected to grow at a CAGR of 46 per cent globally. a UK based Research Company. Out of this. KPO sector worldwide is expected to reach USD 17 billion by 2010. which shows a decent growth of the sector in the coming years. doctors. This makes India save more money and generate more revenue. KPO salaries will be 25-50% higher than those in other fields. Billing rates for KPOs are higher as compared to BPOs. Hurdles in Growth Low employability despite high graduate turnout because it requires high level skills.• Talented workforce After the success of BPOs. lawyers and other professionals. MBAs. But billing rates in India are much less than those in UK or US for KPOs. Future Scenario The future of KPOs in India is bright.
12.In the near future. 8. doctors. With introduction of new areas of specializations in the sector. 2. 3. EXL Service WNS GLOBAL SERVICES ACCENTURE APTARA (TECHBOOKS) 1. 9. 10. And India has the capability of fulfilling this need of the KPO sector.Ds in the near future. It helps in getting different perspectives for delivering quality work to the clients. 5. Top Players in KPO Sector S. There will be a strong requirement of engineers. 13. CAs. KPO prefers employees from diverse academic backgrounds. Companies Evalueserve (EVS) McKinsey & Company RocSearch Pangea3 OfficeTiger Copal Partners Gevity Pipal Research Grail Research Inductis. 4. job opportunities have also increased. No. 11. India will experience a higher rate of growth in KPOs as compared to BPOs. research analysts. lawyers. Therefore it has a promising future. 6 7. MBAs. Career Opportunities KPO sector is growing and so are the job opportunities in this sector. KPO sector will heavily contribute to the revenue generation and job creation due to its increasing size. In-depth domain knowledge . scientific researchers and Ph.
etc. So basically. Tech. professionals are taking KPO industry as a longterm career option. far more than what is being paid in the BPO sector. Ed) Chartered Accountants Economists Architects Journalists People with science background have a better chance as they have a flair for mathematics. M. etc ) Doctors ( MBBS) Engineers (B.is a must for working in a KPO. Unlike BPO. client interaction. commitment and positive attitude towards work. Marketing. Skills KPOs are looking for: • • • • • • Analytical skills for analyzing data. domain knowledge. Well-educated. command over English and IT acumen can look forward to a bright career in KPOs. managerial responsibilities and abilities. Some of the preferred professional categories and the qualifications associated with them as per the industry's recruitment trends for entering the KPO sector are: • • • • • • • • • MBAs (HR. One can make full use of his/her educational qualifications in a KPO. To know the qualifications required to enter and survive in a KPO. KPOs are the best place to work if a person has zeal to learn. E. IT.. science and research. Tech) Lawyers (LLB) Teachers (B. B. Employee retention and job insecurity among employees are also major issues. a temporary enumerative option. the key competencies required are: • Domain knowledge . analytical abilities. click on the link. IB. workforce requirement may rise and fall in KPOs as the work is project based. Finance. good performers have tremendous opportunity for growth in salary package. KPO is a quick-money sector and provides long-term jobs as well. analytical and deserving candidates can make handsome money in this sector. People with good educational background. Usage of resources for information research Making presentable reports from raw data Theoretical and conceptualization knowledge Computer proficiency (software and hardware devices) English Speaking On the other hand. Since the number of skilled people is less. Qualifications There is no particular qualification required as such to work in a KPO. knowledgeable.
CEOs and CIOs of various organizations attended the summit. It was held in Singapore on 13th and 14th June. . KPO Asia 2007 discussed: • • • • The challenges and prospects of shifting from BPO to KPO The outsourcing and offshoring options available in Asia. It was first of its kind in KPO industry in the Asia-Pacific region. This was a great opportunity for outsourcing professionals to make others understand the emerging trends and innovations in KPO sector. This is because the organizations are still doing selective outsourcing. But there is a possibility that the Indian knowledge process outsourcing (KPO) market will not be able to touch the projected $ 12 billion by 2010. sponsored this conference. It focused on knowledge services in KPO sector. Malaysia.• • • • Basic interest in the field of work Aptitude for working with data and information Good communication skills Team work KPO Asia 2007 KPO Asia 2007 was a two day event in which the renowned providers of KPO services presented their outsourcing and offshoring skills and solutions. It saved a lot of time and money which would have been wasted in evaluating the KPO service providers otherwise. The projected figure is not easily achievable. More than 200 participants attended this summit. Evaluation of outsourcing and offshoring destinations in Asia (India. Asia's most experienced outsourcing service provider. These people from the industry had raw knowledge of the KPO industry.e. KPO Asia 2007 helped participants in many ways like: • • • • • • • • • Taking leadership positions in KPOs To use the cost effective and wide marketing network in Asia Developing relationships through this network To access the global movers and shakers in outsourcing Increase brand recognition New partnerships and alliances Demonstrate products and solutions to audience Better understanding the KPO market Face-to-face meetings with various industry experts umbers bit too outstretched It was estimated that the KPO industry will have a CAGR of 80%-90% i. $ 12 billion by 2010. Best practices for getting desirable results. Philippines and China) The content displayed in the exhibition was thoroughly researched so that it could attract the right people whom the general public would like to meet. Beyondsoft Group. Singapore.
Also dual outsourcing will increase.this is difficult to find out. companies are outsourcing non core activities like accrual services. Whereas a recent Evalueserve report says that the KPO industry is doing pretty well and will soon achieve the targets set. . treasury operations. equity research. They prefer to do it themselves. i. outsourcing work to captives plus external vendors. credit decision processes.The growth in KPO market is more than the growth in IT/BPO market. etc. It also says that till 2010 KPO industry will start following the vendor model (buy) instead of captive model (make). Reasons being: • Many companies are not comfortable in outsourcing work to third parties. If $ 20 per hour is charged (which is the minimum fee being charged) then only $ 8 billion can be achieved by 2010 but not $ 12 billion. KPOs are growing at a fast rate.e. • There are so many entry barriers for professionals who are experts in KPO segment. But irrespective of the debate. but how fast? .