What is knowledge process outsourcing (KPO)?

Knowledge process outsourcing (KPO) is the allocation of relatively high-level tasks to an outside organization or a different group (possibly in a different geographic location) within the same organization. KPO is, essentially, high-end business process outsourcing (BPO).

Most low-level BPO jobs provide support for an organization’s core competencies and entry-level prerequisites are simply a command of English (or applicable language) and basic computer skills. KPO jobs, in comparison, are typically integrated with an organization’s core competencies. The jobs involve more complex tasks and may require an advanced degree and/or certification. Examples of KPO include accounting, market and legal research, Web design,Software Development, Digital Marketing and content creation.

KPO and BPO are often conducted through offshore outsourcing as corporations seeking the most value for the least money source projects to countries where wages are lower. Because knowledge process jobs may bring in twice as much money to the economy as BPO, countries such as India are actively promoting development of that industry.

Challenges faced by the KPO Industry today

outsourcing of knowledge processes face more challenges than BPO . What are the challenges faced by  the KPO industry today? Some of them are maintaining higher quality standards, investment in KPO infrastructure, the lack of talent pool, requirement of higher level of control, confidentiality and enhanced risk management. Also,

— Working indifferent time zones:   Working in night shifts for clients based out of US or UK or APAC,  employees have to work in night shifts and this affects their health due to errctic sleep patterns in the long run.

— Poor Infrastructure and Rising Real Estate Prices : Poor infrastructure is posing immense challenges in delivering high quality services to the international clients. Metro cities are slowly getting congested and costs of operations are rising. In such a scenario Tier II cities need to emerge with well-developed infrastructure.

— Concerns over Data Security : According to industry sources, KPO units are privy to information not otherwise available in public domain. At times, clients hesitate to offshore any

sensitive or confidential data to any third-party service provider. A bigger challenge is to convince clients that the quality of off-shoring services provided at low cost is associated with assurances such as confidentiality and NDAs.

— Manpower and Knowledge Issues : A KPO professional requires possession of right skill-sets and domain knowledge. Therefore, access to a large, high-quality skill pool (in diverse fields such as law, patents, economics, management, finance, engineering) is a precondition for successful KPO operations. Monotony emerges as a psychological factor that is also attributed to the increasing attrition rate in KPO units. This is increasingly being observed even in domain areas where highly skilled and qualified professionals are engaged.

— Industry and Business Understanding : A thorough understanding (of the businesses and processes executed within the KPO domain) is required to execute the knowledge-based assignments successfully. The demand-supply gap for quality workers in India is relatively getting enlarged and this poses a big challenge to this sector.

— Stiff Competition from other regions : India faces stiff competition in the outsourcing arena from the Philippines, Russia, China, Poland and Hungary as they are all vying to get the ravaged economic arena back on track.