What Is KPO? How Is It Different From BPO?
Definition Of KPO – Its Origins And Value Proposition
Knowledge process outsourcing (KPO) can be defined as a set of services that are focused to perform the core functions related to business activities, which will increase the company’s value. KPO processes involve knowledge related work that requires advanced analytical and technical skills.
KPO helps enterprises meet the customer’s demand for high-quality services, provide operational efficiency and thus add strategic value to the products and services. KPO also enables companies to benefit from customized solutions – reduce design-to-market lead times; manage critical hardware efficiently; provide research on markets, competition, products and services; enhance organizational effectiveness in business administration; and help in dealing with rapidly evolving business scenarios. Legal process outsourcing services (LPO) are also a special type of KPO dealing with legal services. These services involve legal coding, E-Discovery services, E-Brief Hyperlink Services and Logical document determination.
According to India Brand Equity Foundation, companies outsourcing work to a KPO vendor can help save costs up to 32 per cent on revenues.
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Major Segments Of KPO
Data Management, Search and Analytics
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In industries such as FMCG (Fast-moving Consumer Goods), telecom and banking services, information regarding the market, competition, products and services, and customers is crucialto assist clients in gaining a better understanding of their business issues and to develop effective solutions. Key data analytics services provided by KPO firms include customer analysis, supply chain analysis and retail analysis.
Banking, Securities and Insurance
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Remote Education and Publishing
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Market Research and Competitive Intelligence
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Engineering Design
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BPO Vs. KPO – Key Differences
BPO | KPO | |
---|---|---|
Involves | Back office or front office operations - data entry, customer care, finance and accounting, transcription, website services, HR support and payroll processing | Knowledge based - market research, equity research, legal process management, medical content & services and education and publishing |
About | Size and volume and efficiency | Depth of knowledge, experience and judgment |
Services | Low-end | High-end |
Employee qualification | Basic qualification with expertise in process | Skilled employees with expert knowledge |
Based on | Rules | Judgment |
Driven by | Volume | Insights |
Relies on | Cost arbitrage | Knowledge arbitrage |
Process | Pre-defined | Requires application and understanding of business |
Complexity | Less complex | Highly complex |
Coordination | Low | High |
Comparison Between Different Industry Segments
Benefits of KPO/BPO
With the increase in demand for outsourcing services, businesses must be aware of the benefits of outsourcing. Outsourcing business back office, front office and knowledge related processes will provide diverse benefits for businesses such as:
Save costs
With outsourced solutions, cost reduction is possible, as the partnering company takes effort to meet through process improvements with reengineering, and with the use of latest technologies that reduce and bring administrative and other costs under control. Companies can also save on staffing and training.
Focus on core business functions
Better results in non-core areas
Improve operational efficiency
Innovative technology at low cost
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JUAN REYESDigital Brand Manager - SEO, SEM, and ApplicationsPhone: 800-670-2809 ext. 205Direct: 918-398-9684Fax: 972-466-5385
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Jessica SchwartzSolutions Manager - Business Process Optimization DivisionPhone: 800-670-2809 ext. 205Direct: 918-398-9684Fax: 972-466-5385
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Amber DarstSolutions Manager - Practice and Revenue Cycle Management: Healthcare DivisionPhone: 800-670-2809 ext. 205Direct: 918-398-9684Fax: 972-466-5385
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Meghann DrellaCPC: Senior Solutions Manager - Practice and Revenue Cycle Management, Healthcare DivisionDirect: 918-398-9684Fax: 972-466-5385
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Natalie TorneseCPC: Director of Revenue Cycle Management - Healthcare DivisionPhone: 800-670-2809 ext. 205Direct: 918-398-9684Fax: 972-466-5385
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Jan MerrifieldSenior Solutions Manager - Transcription, Medical Record Review, Data ConversionPhone: 800-670-2809 ext. 205Direct: 918-398-9684Fax: 972-466-5385
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Julie ClementsVice President of Operations - St. Paul, MinnesotaPhone: 800-670-2809 ext. 205Direct: 918-398-9684Fax: 972-466-5385
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Loralee KappSolutions Manager - Practice and Revenue Cycle Management - Healthcare DivisionPhone: 800-670-2809 ext. 205Direct: 918-398-9684Fax: 972-466-5385
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KPO Growth
By type, the products can be split into Analytics & Market Research, Engineering & Design, Financial Process Outsourcing, Legal Process Outsourcing, Publishing Outsourcing, Research & Development Outsourcing and Others. By application, the market can be divided into BFSI, Healthcare, IT & Telecom, Manufacturing, Pharmaceutical, Retail and others. Based on region, the report is segmented in to United States, Europe, China, Japan, Southeast Asia, India and Central & South America.
Over The Years BPO May Merge Into KPO
Each industry faces its own challenges. In the KPO industry, the primary challenge is acquiring and retaining professionals in the fields of business, finance, management, law, engineering and medicine. Security risks can also impact KPO in a negative way. KPO companies may have to deal with structured as well as non-structured data from organizations. It is crucial for such companies to have stringent data security measures to prevent any loss of data. As KPO is an extended version of BPO, over time with the expansion of KPO, there are higher chances for BPO to lose its existence. In the near future, many business process outsourcing companies will also be providing KPO services to help any business meet all their requirements quickly and efficiently.
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