How Far Can Outsourcing Go?

I notice I mentioned Cognizant in my last blog. Without meaning to start mentioning them every day, I just want to recount a few comments made when I had a chat to Martin Kochman today. Martin is the head of Business Process Outsourcing (BPO) operations for Cognizant in Europe and we had a chat on the phone earlier about some of the changes in the BPO sector.

What was particularly interesting were some of his views on the hard times faced by many companies as we head into recession. Martin remains very positive about the business outlook for the BPO sector as a whole. He said: “I still think that the total size of the market is growing, but we may see a slowing in the rate at which earlier growth targets are met. The fundamentals are still in place for this to be a significant market.”

He added: “Cost reduction will always drive some activity, but the boundaries between what organisations have considered ‘outsourcable’ will continue to be pushed and more is going to come into the realms of outsourced contracts.”

Martin clearly believes that the retained organisation is going to shrink. This implies that as times get harder, companies may even be exploring the outsourcing option even more than usual. In summary, Martin thinks it’s going to be a busy time for companies in IT and BPO services: “The market will grow. On the demand side there is more global recognition of the skills and standards required and so things like Knowledge Process Outsourcing (KPO) are becoming easier to package up and deliver remotely.”

Source from: Markkobayashihillary.computing.co.uk/2008/11/how-far-can-out.html

KPO : Knowledge Process Outsourcing

Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost. Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.

Process transparency is a major barrier to using KPO services Many organizations do not track carefully which decisions are made by whom, and rely so much on informal social processes (and “soft skills”) that it is unclear how much the use of KPO would disrupt existing operations. However, requirements like Sarbanes-Oxley and radical transparency movements like full cost accounting, shareholder activism and eco-labels and moral purchasing require organizations to be more explicit about when and by whom decisions are made. These trends make it easier for outsourcing non-critical jobs to be considered by qualifying the impact of decisions in advance.Furthermore, it becomes easier to evaluate and compare success. A fully developed service economy enables KPO by treating all functions as services. So do more technical trends such as service oriented architecture, enterprise application integration and telework: it is easier to outsource a job if it is already being performed outside the head office. Organizations adopting ISO 9000 and ISO 19011 should also find it much easier to integrate externally provided KPO into their operations and audit them on a fair basis.

As of 2007, most US organizations were hiring foreign professionals under H-1 visas to do jobs in the USA for several years, after which they would return to their home countries as managers to train and supervise others, continuing to report to their former business units.

What is KPO?

It is being claimed that KPO is one step extension of Business Processing Outsourcing (BPO) because BPO Industry is shaping into Knowledge Process Outsourcing because of its favorable advantageous and future scope. But, let us not treat it only a ‘B’ replaced by a ‘K’. In fact, Knowledge process can be defined as high added value processes chain where the achievement of objectives is highly dependent on the skills, domain knowledge and experience of the people carrying out the activity. And when this activity gets outsourced a new business activity emerges, which is generally known as Knowledge Process Outsourcing.

Knowledge Processing Outsourcing (popularly known as a KPO), calls for the application of specialized domain pertinent knowledge of a high level. The KPO typically involves a component of Business Processing Outsourcing (BPO), Research Process Outsourcing (RPO) and Analysis Proves Outsourcing (APO). KPO business entities provide typical domain-based processes, advanced analytical skills and business expertise, rather than just process expertise. KPO Industry is handling more amount of high skilled work other than the BPO Industry. While KPO derives its strength from the depth of knowledge, experience and judgment factor; BPO in contrast is more about size, volume and efficiency.

In fact, it is the evolution and maturity of the Indian BPO sector that has given rise to yet another wave in the global outsourcing scenario: KPO or Knowledge Process Outsourcing. The success achieved by many overseas companies in outsourcing business process operations to India has encouraged many of the said companies to start outsourcing their high-end knowledge work as well. Cost savings, operational efficiencies, availability of and access to a highly skilled and talented workforce and improved quality are all underlying expectations in outsourcing high-end processes to India

The future of KPO has a high potential as it is not restricted to only Information Technology (IT) or Information Technology Enabled Services (ITES) sectors and includes other sectors like Legal Processes, Intellectual Property and Patent related services, Engineering Services, Web Development application, CAD/CAM Applications, Business Research and Analytics, Legal Research, Clinical Research, Publishing, Market Research (Market research KPO ) etc.

In today’s competitive environment, focus is to concentrate on core specialization and core-competency areas and outsource the rest of the activities. Many companies and organizations have come to realize that by outsourcing non core activities, not only cost are minimized and efficiencies improved but the total business improves because the focus shifts to the key growth areas of the business activity.

Scope and Future of KPO

According to a report of National Association of Software and Services Companies (NASSCOM), the Indian chamber of commerce that serves as an interface to the Indian Software industry, Knowledge Process Outsourcing industry (KPO) is expected to reach USD 17 billion by 2010, of which USD 12 billion would be outsourced to India. Another report predicts that India will capture more than 70 percent of the KPO sector by 2010. Apart from India, countries such as Russia, China, the Czech Republic, Ireland, and Israel are also expected to join the KPO industry.

According to a recent study by “Evalueserve, a Gurgaon based outsourcing company having service chart for global world”, the global KPO market is expected to grow at a cumulative annual growth rate (CAGR) of 46 per cent, from $1.2 billion in 2003 to $17 billion in 2010. Compare this with the prediction for the low-end outsourcing services market. This is expected to have a CAGR of 26 per cent, from $ 7.7 billion to $39.8 billion in the same period.

Evalueserve says India provided $3.5 billion of BPO and KPO (but non-IT) services in 2003 and is expected to grow at a CAGR of 36 per cent during 2004 to 2010. Hence, it is likely to earn $30 billion in 2010 by providing these services.

Says country general manager, Kelly Services, Achal Khanna “India still maintains the competitive advantage for providing, the combination of the most cost-effective and high quality manpower- this is India’s strength in the off-shoring business”.

In the future, it is envisaged that KPO has a high potential as it is not restricted only to Information Technology (IT) or Information Technology Enabled Services (ITES) sectors, and includes other sectors like Intellectual Property related services, Business Research and Analytics, Legal Research, Clinical Research, Publishing, Market Research (Market research KPO), etc.

“Over the past year or two, the outsourcing industry has been throwing up jobs for Doctors, Engineers, CAs, Architects,” says Jacob William of the Bangalore-based Outsource2India, which employs 500 people and offers services in the big-buzz, big-bucks area of knowledge process outsourcing. “Unlike the first wave which was more about entering data and answering phone calls, these jobs involve skill and expertise.”

Also, of course, the talent is much more affordable. “Law firms in the US charge an average of $400-450 per hour, and we do the same work for $75 to $100 an hour” says Kamlani” who is an outsourcing provider in the same area.

In the Indian context, KPO salaries could be 25-50 per cent higher than those offered to the same domain experts such as Engineer, Doctor, CA, Lawyer, Architect, Biotechnologist, Economist, Statistician and MBAs, it said.

In its annual publication Strategic Review 2005, Nasscom has said the high-end activity of the BPO industry—the KPO or knowledge process outsourcing could be worth $15.5 billion by 2010.

According to earlier estimates, the BPO industry itself was expected to be about $20bn by 2008, hence a very significant portion of the sector—in excess of 50% is now projected to be knowledge based. This represents significant metamorphosis of call centre sector business to completely different model. Interestingly, Sunil Mehta, Nasscom vice-president research, distances himself from the estimates.

The projections are based on a white paper released by Evalueserve. The paper cites reasons for a possible KPO boom. It says higher savings by outsourcing knowledge based activities combined with the scarcity of specialized talent in developed countries could lead to growth in the KPO sector.
Billing rates for KPO are higher at $30-45 per hour compared to just $10-14 in the BPO business. However, the paper also warns of several challenges like higher quality standards, greater investments and inadequate talent.

The study estimates that while the compounded growth rate of BPO till 2010 would be just 26% KPO is expected to be grow at almost 46%.

Bottlenecks in Future Growth

A study on Knowledge Process Outsourcing (KPO) sector shows a huge supply gap that threatens to cripple its growth. Rocsearch, a UK-based research services company, has gathered evidence suggesting that the KPO market may just about reach a size of $5 billion by 2010, manned by 100,000 people instead of projections of a $12 billion market supported by 250,000 employees.

This accentuates Nasscom’s projections of a shortfall of 500,000 workers in ITES and BPO sectors by 2010.

Assuming an average revenue per person of $55,000 over the next four years, 100,000 knowledge workers point to a $5 billion market. This size, though based on a CAGR of 32%, is still 60% less than the $12 billion potential projected by big KPOs, like Evalueserve, last year.

Rocsearch COO, Ashish Sinha says the sector is restricted by low employability despite high graduate turnout, and competing demand from other sectors as jobs grow faster than the workforce.

For example, all the 2,000-odd IIM and top 10 B-School graduates are employable, while less than half the 84,000 graduates from Tier-II B-Schools would make the grade.

The study sees only 500,000 of the over 3 million workers added to the labour pool in 2005 as employable in global firms and of these, just 2 in every 100 are likely to opt for work in knowledge space.

Regional Advantages and Domains of Expertise

Due to the availability of large numbers of skilled staff working for lower pay rates than in the developed world, a few countries like India and the Philippines are front runners in providing these services. This type of work demands advanced analysis and communication, so specific higher education and language skills are essential. MBAs, Pharmacists, PhDs, engineers, doctors, lawyers, writers, ghostwriters, designers, web designers and other specialists with formal credentials tend to be required.

In India as well as the Philippines, KPO is envisaged as having a high potential[citation needed], not only in the Information Technology (IT) or Information Technology Enabled Services (ITES) sectors; it could include patent and copyright related services, other legal research functions, business intelligence and analytics, clinical research, publishing and supply chain management, all of which require a large number of small decisions, and the final products of which tend to be relatively easy to evaluate for accuracy or effectiveness.

The maturity of the BPO sector in both countries gives it an obvious lead in KPO, essentially an offshoot of BPO. It is the high-end activity of the BPO industry and as of 2007 was estimated to provide substantial growth over the next few years. More complex fields of work that the Indian KPO industry focuses on include intellectual property or patent research, content development, R&D in pharmaceuticals and biotechnology, market research, equity research, data research, database creation, analytical services, financial modeling, design and development in automotive and aerospace industries, animation and simulation, medical content and services, remote education and e-learning, publishing and legal support.

Some practitioners argue that one region likely to suffer extreme job loss due to KPO is the USA. Princeton economist Alan Blinder estimates 40 million white-collar jobs in the US alone could move offshore in a decade or two.

Challenges to Providers

• In addition to the challenges faced by clients, KPO companies themselves have challenges:
• High staff turnover, especially where work is not challenging to the employee’s skills
• High cost of training and tendency to lose the most experienced employees to the clients
• Ensuring the security and confidentiality of information, especially when privacy laws vary from country to country

Market Research

Leaders in the market research industry are slowly seeing the benefits offered by KPO and have begun outsourcing.[citation needed] Comprehensive IT solutions are offered by vendors who provide solutions covering the entire life cycle of a market research project. Smaller firms can also benefit from these solutions as they are cost effective and remain within the budget of smaller organizations.
KPO is claimed to efficiently increase productivity and increase cost savings in the area of market research.[citation needed] Advocates claim that the trend is likely to prove increasingly popular in the global market research industry.

Source from:
http://knol.google.com/k/naidu-sanapala/kpo-knowledge-process-outsourcing/23nfeaobzevcu/2?locale=en#

KPO Firms Don’t Lose Heart Despite Wall Street Woes

The Wall Street collapse will take the most toll on the knowledge process outsourcing (KPO) business in India , according to industry experts, but firms are optimistic that the meltdown will still create opportunities for outsourcing. The filing of bankruptcy by investment bank Lehman Brothers has hit its KPO services provider eClerx Services, hard. The KPO firm earned around 13% of its business from Lehman Brothers.

“Lehman Brothers was one of our top five clients, and their collapse will definitely affect the business in a negative way. But it will be a short-term affect,” commented PD Mundhra, executive director, eClerx Services.

Mundhra also added that the fall of such investment firms are more like to affect KPOs rather than the business process outsourcing firms (BPOs).

“Since investment banks are more likely to work with KPOs. In such a cenario, KPOs are more likely to get affected,” said Mundhra. However, according to an industry analyst, things are not as gloomy as they seem to be.

“The service providers dealing with the investment firm will definitely be affected. But on the other hand, if the company gets taken over by someone else, the same businesses would need to be dealt with.

Hence, the KPO and BPO services will be required as before. Whether the projects stay with the same service provider or go to competition is a different issue,” commented the analyst. “The outsourcing work will stay, only it might go to some other provider,” he added.

eClerx is hopeful that the buyer of the US business of Lehman Brothers will continue with eClerx’s services.

“We are hoping that the buyer of Lehman’s US business will continue with our services. We’ll come to know about the situation in a couple of weeks,” said Mundhra.

Industry experts are also hopeful that during such a financial meltdown, outsourcing assignments are more likely to increase as the companies overseas are keen about cost cutting.

“During such a financial turmoil, companies will be looking at every opportunity to save cost, since this is the time where more and more work should be outsourced,” commented an analyst.

The Future of LPO and KPO in India

There is a difference between LPO and KPO, the latter requires “domain-specific expertise” that few Indian firms possess. The market for ICT-related LPO and KPO services in India is emerging and more is expected from market leaders like Perry4Law..

THE FUTURE of any organisation depends upon the capability of its workforce and to retain such workforce it has to invest considerably. This expenditure may at times increase the cost of production or operating the organisation. Organisations use many types of cost management and cost reduction techniques to minimise their expenses. This practice also applies to the legal industry.

Legal practice is very lucrative and remunerative in developed countries like US, UK and the European Union. There the cost of retaining even entry-level employees is very high. Many well known law firms of these developed countries outsource their back office and clerical work to Legal Process Outsourcing (LPO) companies in India.

According to Praveen Dalal, managing partner of the internationally renowned LPO and techno-legal KPO Perry4Law, “LPO in India is attracting lot of foreign firms and companies to outsource their legal works to India. During the last month alone, Perry4Law received various requests regarding partnerships, LPO assignments, empanelment requests, etc.

We are hopeful of even a larger services contribution when the Knowledge Process Outsourcing (KPO) industry in India would emerge and mature as Perry4Law is world renowned for it techno-legal KPO services.

Clearly, there is a difference between the current LPO assignments and future KPO assignments as the latter requires “domain-specific expertise” that very few firms actually possess in India. Similarly, the market for information and communication technology (ICT)-related LPO and KPO services in India is still emerging and more is expected from market leaders like Perry4Law in the said market.

LPO and KPO assignments are bound to increase owing to developments like the global financial meltdown that has now unnerved the US. More and more corporate houses and investment banks from the US are looking towards the Indian LPO industry for legal advice. In the present globalised world, India is surely heading for a great start.

Source from: Merinews.com

Knowledge Process Outsourcing Represents the Next Generation of Outsourcing Services

KPO is likely to gain traction as business process outsourcing providers conttinue to build financial services-specific expertise.

Knowledge process outsourcing, or KPO — in which service providers take over high-level tasks requiring professional judgment and industry experience — looks to be the next frontier for the outsourcing industry. Many expect financial services companies to lead the way in KPO, and there’s data to support such a view. For example, 45 percent of financial services executives who participated in a recent InformationWeek Analytics survey said they see the industry knowledge of their business process outsourcing (BPO) providers significantly improving. That’s more than any other area of improvement.

Top Five Drivers of Business Process Outsourcing: Financial Services vs. Other Industries

Business Process Outsourcing: Financial Services vs. Other Industries

Another reason is that there’s a notable “strategic minority” of companies, according to the InformationWeek Analytics survey of 372 business technology professionals, including 110 in financial services, that see BPO as a road to competitive advantage, with goals such as transforming processes and increasing revenue, not merely cutting costs and meeting short-term goals. In financial services, that strategic group is about 15 percent (with another 24 percent responding that BPO is “more strategic than tactical”).

Yet the top concerns about BPO revealed by the survey will only be magnified as financial services companies consider KPO, which might be used for capital market functions such as equity research in support of domestic analysts. It takes a high degree of trust to transfer custody of customer data, share tacit knowledge and work as a single team. Yet the No. 1 concern financial services companies have about BPO is data security, according to InformationWeek Analytics, a sibling property of Wall Street & Technology. No. 2 is the difficulty of managing BPO, followed by tension between employees and outsourcers, the difficulty in reversing deals, and reduced flexibility to change processes.

Where’s the Outsourcing Innovation?

There’s also the question of whether outsourcers have the innovation capability needed for KPO. Just 10 percent of financial companies gave providers high marks for innovating process change. Only 16 percent of financial services respondents said they see improvement in vendors assigning quality people for their projects. Companies that aren’t getting bright ideas and top people on everyday projects won’t likely rush vendors up the knowledge stack.

All signs point to companies’ use of BPO continuing to grow. The survey finds 28 percent of companies plan to increase BPO, about four times more than those planning to decrease the use of outsourcing. Yet cost cutting through additional outsourcing only goes so far. Given that outsourcing is mature — with organizations having made significant investments in offshore BPO capabilities — any increase in the amount of outsourcing has to press beyond self-imposed limits and barriers with which companies have become comfortable. Market pressures — including troubles within the financial services industry — may compel companies to push those limits into areas such as KPO.

By Chris Murphy, InformationWeek
August 14, 2008
Source: Wallstreetandtech.com/operations/showArticle.jhtml?articleID=210100188

Web Exclusive | KPO industry to grow globally to $17 bn in 2010

Fielding questions on how KPOs are making inroads in India and how they compare vis-a-vis BPOs, is Anil Kaul, founder & CEO, AbsolutData Research and Analytics, in an interview with Nishu Kakkar

As India becomes a hub for multinationals to set up back-end offices, armed with a young, agile and cheap work force, job opportunities have soared in the IT sector, be it in the already established BPOs, (Business Process Outsourcing) fast emerging KPOs (Knowledge Process Outsourcing) or the niche RPOs (Research Process Outsourcing) and APOs (Analysis Process Outsourcing). Nishu Kakkar meets Anil Kaul, founder & CEO, AbsolutData Management, a company that provides consulting-oriented Advanced Analytics and Market Research services to organizations around the world. Excerpts from a free wheeling chat

Q: The average person is still unsure of what a BPO is and now you have KPOs, RPOs and APOs joining the list. What are their distinguishing features?

A: Basically there are two big categories – BPO and KPO. Processes like RPO and APO falls under the KPO umbrella. Whilst the former is a straightforward process restricted to following instructions, the latter focuses on outsourcing of a particular project to maintain expertise.

In terms of complexity of hierarchy, at the bottom is the BPO which is the simplest. Following that is the KPO family where you deliver a service by applying knowledge relating to multiple levels above the support function.

KPO typically requires advanced skills, judgment, talent and hard-core analysis. It calls for awareness of statistical programming that helps break monotony of BPO processes, as each task here is different from the other. Processes like analytical research requires data, calling for analysis and presentation of the same in a cogent concise manner.

Q: Is it safe to deduce that it is the evolution and maturity of the BPO that has led to the birth of the KPO?

A: Indeed. KPO undoubtedly is a logical progression or an extension of a BPO. There have been numerous ways in which BPOs have helped KPOs grow. The former succeeded in generating a level of confidence about the capability of Indians to take up crucial projects. This made it easier for establishing India as an ideal destination for outsourcing work. It also laid the foundation by installing infrastructure required for delivering services out of India, which KPOs are today benefiting from. However, BPOs are considered as lower-end value adds whilst KPOs are perceived to be higher-end.

Q: Lower wages and overheads – are these chief reasons for India emerging as a foremost outsourcing destination?

A: Attributing India’s cost-effectiveness as the only reason that makes it eligible for being a mega outsourcing destination would not be fair. The significant ‘other dimension’ is that we have a rich pool of intellectual capital.
Source from: Livemint.com

What Differentiates Knowledge Process Outsourcing from BPO

Financial services knowledge process outsourcing (KPO) industry is expected to be worth $5 billion by 2010, a study by KPMG said.

Sharing his views on the report, Pradeep Udhas, Global Partner-in-Charge, Sourcing Advisory, KPMG, has said that the success in offshoring business operations has encouraged many multinationals to start outsourcing key business processes and high-end knowledge work. The KPO phenomenon will have far reaching consequences for the global financial services industry over the next three years.

He feels that there is likely to be a significant shift in the boundaries between ‘outsourceable and ‘non-outsourceable activities; offshoring strategies are expected to embrace new locations and most global banks and insurers are expected to adopt KPO strategies, the study says.

Decisions about outsourcing may be accelerated to preserve and increase competitive advantage; boutique providers will leverage KPO to create new services and offerings and more rigorous regulatory and compliance control will likely be demanded as KPO providers deliver more complex services.

India is expected to remain a preferred location for KPO activity but organisations are expected to look for alternative locations for additional delivery centres, both from customer and service provider perspective.

The study also says that there are a few limitations on the potential growth of the KPO industry over the next three years like skill-set shortage, a declining U.S. dollar and compliance and regulatory pressures.

Some of the key challenges that can emerge in the industry are: maintaining high quality standards, investment in KPO infrastructure, lack of talent pool, requirement of higher level of control, confidentiality and enhanced risk management, it points out.

It says that the KPO industry has indeed come off age. Clients are recognising that process complexities, higher billing rates and skilled resources requirements differentiate KPO from BPO.

Source from: Hindu.com

Outsourcing Wish List

Mumbai, India: At the NASSCOM conference for India’s IT services industry, CIO of Best Buy and CEO if its international operations Robert Willet shared his list of reasons why an organization should outsource and according to him if cost savings are the No.1 reason you feel you should outsource then, you probably should not outsource at all.

His wish list includes –

1. To harness new and better skills and capabilities
2. To implement projects, take on additional, more challenging projects and add skills and capabilities to your forte
3. To reduce risks
4. To leverage specialized, technical skills that your organization may not be able to afford on a full time staff
5. To lower cost

Willet also offered other insights into the IT industry. He believes that projects should be customer centric and not product centric. So the IT team must assess each project from the point of view of whether it is customer centric or not. He says that organizations do not necessarily require retail specialists to improve customer management and relationship.

Willet goes on to say that the one skill that IT companies including his Best Buy need to perfect is the skill to pick up and learn from the ideas and experience of peers, competition and the industry in general. These ideas, advice and experience need to be assessed, learned and put to use.
Source from: Informationweek.com

The New Face of Outsourcing: Knowledge Process Outsourcing

Outsourcing entered the global business scene in the 1980s, and has changed the way it looks, feels and functions since then. Knowledge process outsourcing or KPO refers to the outsourcing of knowledge intensive tasks and functions to experts overseas or outside of your organization. In this age of competition, companies are increasingly turning to specialization for improving cost and time feasibility and increasing efficiency. They focus on core functionalities and outsource the rest. With knowledge intensive areas entering the fray, it allows organization the flexibility and provides the resources for the business growth of the organization.

Quite different from Business Process Outsourcing (BPO), KPO signifies high end value added tasks in which execution depends on skill, expertise, domain knowledge and experience of the experts handling the tasks. KPO usually includes a segment of Business Process Outsourcing (BPO), Research Process Outsourcing (RPO) and Analysis Proves Outsourcing (APO). It deals with highly knowledge intensive tasks and activities and focus is on depth of knowledge, experience and judgment. On the other hand, a BPO deals with improving process efficiency and is focused on single processes, size volume and efficiency.

It can be said that the growth and maturity of the BPO industry led to the significant rise of the KPO industry. The success and substantial results achieved by many organizations in outsourcing operational tasks have led them to outsource high end knowledge and skill intensive tasks. Cost and time feasibility, sound infrastructure, skilled and knowledgeable workforce, and improved quality are some the factors that have worked to the advantage of KPO organizations the world over. KPOs in India benefit from the easy availability of skilled and trained specialists, technologically advanced infrastructure and advanced communications tools that the country wields.

Knowledge process outsourcing calls for the application of skill, knowledge and expertise pertinent to a high level area of specialization. These prerequisites are being discovered and tapped by leading businesses across the globe resulting in the outsourcing of high-end processes to low-wage destinations. Hence Knowledge Process Outsourcing involves offshoring of knowledge intensive business processes that require specialized domain expertise.

Design, accounting, manufacturing and engineering fields are opening up to the idea of overseas experts handling domain knowledge intensive projects. This talent is soon Favorable Destinations for Knowledge process outsourcing.

Due to the availability of highly skilled task force than is indigenously available, sound technical infrastructure and vast domain knowledge and expertise countries such as India and Philippines are leaders in the KPO industry. This type of work demands essential skills, vast domain knowledge and excellent communication skills (as most clients are overseas) hence, higher education degrees are most often prerequisite to getting employed with a KPO. The KPO industry in India, entails architectural KPO, engineering KPO, accounting KPO and has already expanded to KPO consultancy.

Scope of KPO

Architectural and engineering KPOs handle design, CAD and drafting related projects that require architects, technicians, dedicated infrastructure and technology. Architecture KPOs in India have earned their place due to the easy availability of highly qualified architects, designers and draftsmen, skilled technicians in the field of rendering, modeling and designing, dedicated technology, communication tools and advanced infrastructure.

The IT segment has also realized the potential of this avenue of outsourcing. Knowledge process outsourcing is believed to increase productivity and improve efficiency. Manufactures and construction companies are also finding it increasingly beneficial to outsource projects rather than invest in infrastructure, staffing, training and compensation for a skilled work force.

Knowledge Process Outsourcing deals with executing standardized processes ok high end skill level depending on analytical and advanced technical skills. Knowledge process outsourcing involves legal works carried out at law firms like patent document writing, global filing, search, trademark search, trademark registration, prior art searches, legal advise on infringements, invalidation search, freedom of use search, etc.

Areas with significant KPO indluence include:

• Pharmaceuticals
• Integration and management services
• Financial services
• Research and analytics
• Computer aided simulations
• Computer aided design (CAD)
• Engineering design and professional services

Benefits of KPO

The primary benefit of KPOs remains the same i.e cost savings, but it does not end there. KPOs allow the added advantage of leveraging the expertise and experience of seasoned professionals, experts and specialists in their specific areas. Outsourcing your knowledge intensive projects or parts of your projects allow you the time, flexibility and resources to take on more and more challenging projects. Hence knowledge process outsourcing provides you more than traditional cost feasibility.

Recent Trends in the KPO Industry

According to a report by GlobalSourcingNow, the Global Knowledge Process Outsourcing industry is expected to reach USD 17 billion by 2010. A report by Evalueserve predicts that India will capture more than 70 percent of the Knowledge Process Outsourcing sector by 2010. Apart from India, countries such as Russia, China, the Czech Republic, Ireland, and Israel are also expected to join the Knowledge Process Outsourcing industry.

The future of KPOs is not restricted to the ITES sector alone. It spans other sectors like legal research and documentation, business research and analytics, Clinical research, publishing, market research etc.