by Knowledge Process Outsourcing (KPO) means information related business task or knowledge-based processes such as research, analysis, consultancy or any other high-level task are outsourced i.e. done by the workers of another company or allocated to the subsidiary of the same organization.
These subsidiaries can be in different countries or geographical location. This is done in order to save resources and costs. KPO firms can take decisions of businesses on the behalf of the parent companies. KPO is nothing but the subset of Business Process Outsourcing (BPO).
Cost-effectiveness, access to the best talent, focus, better utilization of the resources are the advantages of Knowledge Process Outsourcing (KPO).
List of KPO Companies in India
- Sutherland Global Services
- WNS
- Boston Analytics
- SG Analytic
- Eclerx
- Syntel
- CRISIL
- iGate
- McKc (Mckinsey Knowledge Centre)
- Deloitte
Types of KPO Services
Some common example of KPO outsourcing domains include:
- Financial consultants
- Research and development (R&D)
- Business operations (management consulting)
- Technical analysis
- Investments
- Legal
- Medical & Healthcare
- Data analysis and interpretation
Advantages of KPO
- Cost-effectiveness: One of the biggest advantages of a KPO is obviously the cost advantage. The company does not have to set up any infrastructure or bear any operational or running costs. And it gets effective, expertizes services at a fraction of the cost.
- Access to the best talent: KPO’s provide the company with the best, most knowledgeable and skilled professionals available in the global talent pool. And if the KPO is in a developing country like India or Philippines then the cost of such talent is also relatively low.
- Focus: Outsourcing some of the processes, allows the company to focus on its core functions. The KPO handles the peripheral functions, and the company can better focus on its core functions and improve their efficiency and results.
- Better Utilization of Resources: If the company outsources the process that is not at the core of their business strategy, it can use the resources it saves in better places. Say a company outsources its supply chain management. Then the resources it saves on this can be utilized to streamline the manufacturing process, R&D activities, better marketing etc.
Advantages and Disadvantages of KPO
KPO can help companies reduce operational or production costs by creating new processes or streamlining efficiency. KPO also fills the gap or need for skilled employees in a particular field. KPO also frees up existing staff, including management, to do other work boosting efficiency and productivity.
The flexibility that comes with KPO allows a company to increase or reduce staff easily. For example, if economic conditions worsen, a company can easily reduce its KPO staff to cut costs. Conversely, a company can quickly hire specialized staff to boost profits or revenue. KPO helps a company to be more nimble and adapt to the changes in its industry and competitive landscape.
However, disadvantages do exist with KPO. Privacy of intellectual property and business security can be compromised if classified or proprietary information is lost, copied, or brought to a competitor. Companies have less control over the hiring process of outsourced workers. As a result, a company might not be able to ensure the character of its outsourced employees or the quality of their work.
Implementing KPO can be time and resource intensive to establish a successful operation. Moreover, communication can be a concern and a challenge, due to legal, language, and cultural barriers. Another disadvantage might be that existing employees might feel threatened by the hiring of outsourced workers and feel their jobs are at risk.
