Knowledge Process Outsourcing (KPO)
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. This typically involves high-value work carried out by highly skilled staff. “KPO is merely a continuation of BPO, though with rather more business complexity. The defining difference is that KPO is usually focused on knowledge-intensive business processes that require significant domain expertise. The offshore team servicing a KPO contract cannot be easily hired overnight as they will be highly educated and trained, and trusted to take decisions on behalf of the client.
IT outsourcing is strongly focused around technical professionalism, and the migration to business process outsourcing introduces this extra dimension of application professionalism. Ever more complex services, as implied by KPO, demonstrate this very well. The profile of people being hired to serve within KPO service companies are more diverse than just being drawn from technical IT services – these are people with MBAs, and medical, engineering, design or other specialist business skills. KPO delivers higher value to organizations that offshore their domain-based processes, thereby enhancing the traditional cost– quality paradigm of BPO. The central theme of KPO is to create value for the client by providing business expertise rather than process expertise. So, KPO involves a shift from standardized processes to advanced analytical thinking, technical skills and decisive judgment based on experience. 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 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.