Actions

Knowledge Process Outsourcing (KPO)

Revision as of 19:05, 23 March 2021 by User (talk | contribs) (Created page with "'''Knowledge Process Outsourcing (KPO)''' is the process of outsourcing knowledge intensive activities that are data driven and encompass the Proces...")
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)

Knowledge Process Outsourcing (KPO) is the process of outsourcing knowledge intensive activities that are data driven and encompass the process of gathering, managing, analyzing and delivering objective insights into businesses. KPO services are broadly classified into four kinds of services:

  • Data Analytics and Insights: Addressing business problems across industries and domains to empower organisations with actionable insights through cutting edge data analytics
  • Market Research/Business Research: Providing research services and strategy consulting for accurate and succinct answers to the most pressing business questions
  • Global Reporting and Performance Management: Providing efficient reporting and performance measurement across industries to achieve operational excellence and productivity
  • Data Management: Efficient solutions for data integration, storage, retrieval and sharing for robust business reporting and analytics as required by various stakeholders

The scope of KPO business includes preparation of accounts, tax returns, computer aided simulation, engineering design and development, financial services, etc.[1]


Reasons for Knowledge Process Outsourcing[2]
Companies utilize KPO when they are looking for specialized knowledge and expertise where that knowledge base or skills cannot be found in-house. However, companies that engage in KPO offshore also typically do so in order to reduce costs by hiring skilled workers earning lower wages in another location instead of hiring one directly as an employee. Ideally, companies look to KPO to simultaneously obtain a highly-skilled workforce at a lower cost. For example, a manufacturer might use raw materials, add value to those materials through various processes, and then sell the result as a final product. The company might look to KPO to determine how to improve efficiency in its production process so that it can deliver maximum value for the lowest possible total cost. The result of KPO might also help the company create a competitive advantage.

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.


Major Segments of Knowledge Process Outsourcing[3]
A wide range of KPO solutions are crucial to meet the requirements of diverse industry segments such as

  • Data Management, Search and Analytics: In industries such as FMCG (Fast-moving Consumer Goods), telecom and banking services, information regarding the market, competition, products and services, and customers is crucial to 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.
  • Engineering Design: Engineering Services Outsourcing (ESO) involves the outsourcing of activities ranging from design to production and maintenance. Diverse industrial sectors that benefit from ESO include automotive, aerospace, hi-tech/telecom, utilities and construction/industrial machinery. KPO firms often perform design works using computer-aided design(CAD) and advanced engineering methods.
  • Remote Education and Publishing: Remote education segment is mostly operated through subcontract, direct and retail services models. Outsourcing publishing and remote education work would help publishing houses, educational institutes, information aggregators, professional societies, government agencies, universities and corporations to save costs.
  • Banking, Securities and Insurance: Research-related activities by the banking, securities and insurance sector fall under the preview of investment research. This research involves financial modeling, preparing the valuation of companies, stock process tracking, detailed company analysis and profiling, and more.
  • Market Research and Competitive Intelligence: Market research services often begin with data collection and data cleaning. High-end research related works handled by KPO vendors include industrial and customer surveys, data analysis through statistical tools and techniques, report and presentation preparation, and more.
  1. What is Knowledge Process Outsourcing (KPO)? HCL
  2. Why Do Companies Utilize Knowledge Process Outsourcing? What are the Advantages and Disadvantages of KPO? Investopedia
  3. What are the Major Segments of Knowledge Process Outsourcing? Managed Outsource Solutions