Skip to main content

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. Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.

It is being claimed that KPO is one step extension of Business Processing Outsourcing (BPO) because BPO Industry is shaping into Knowledge Process Outsourcing because of its favorable advantageous and future scope. But, let us not treat it only a 'B' replaced by a 'K'. In fact, 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.

Source: NYCLONDON

What high-end services can be outsourced to the Indian KPO sector?

Here are some KPO services that can be outsourced to India :

  • Research & Development
  • Business and Technical Analysis
  • Learning Solutions
  • Animation & Design
  • Business & Market Research
  • Pharmaceuticals and Biotechnology
  • Medical Services
  • Writing & Content Development
  • Legal Services
  • Intellectual Property (IP) Research
  • Data Analytics
  • Network Management
  • Training & Consultancy

According to a report of National Association of Software and Services Companies (NASSCOM), the Indian chamber of commerce that serves as an interface to the Indian Software industry, Knowledge Process Outsourcing industry (KPO) is expected to reach USD 17 billion by 2010, of which USD 12 billion would be outsourced to India. Another report predicts that India will capture more than 70 percent of the KPO sector by 2010. Apart from India, countries such as Russia, China, the Czech Republic, Ireland, and Israel are also expected to join the KPO industry.

Challenges to providers

In addition to the challenges faced by clients, KPO companies themselves have challenges:

  • High staff turnover, especially where work is not challenging to the employee's skills
  • High cost of training and tendency to lose the most experienced employees to the clients
  • Ensuring the security and confidentiality of information, especially when privacy laws vary from country to country

Source: NYCLONDON

Creating the climate for success in India

The responsibility of setting up successful KPOs in India ultimately belongs to the India-based business units that can effectively serve the global market. PricewaterhouseCoopers has identified four possible scenarios for the creation of KPO service providers:

  • The well-established IT and BPO companies will move up the value chain and diversify into KPO;
  • Companies currently serving specific vertical markets in India could choose to begin offering their services globally;
  • Multinational companies may form captive units in India whose staff belong to global teams within various functional units; and
  • New companies may be formed by Indians with very specialized skills and international work experience to provide services exclusively to the global market.

Irrespective of how they are formed, these business units should aspire to go all the way to create India-based expertise that produce tangible business benefits for the organizations they support within a short time frame.

They need to able to recruit, train and retain highly talented team members and be effective in moving them up the value chain.

Sources and References:

We like to invite you rate the post . You may also share it with your friends by clicking on the button ShareThis at the end of this post.

If you are working with a KPO, please let us know more about KPO by posting a comment on the blog.

Regards,

Santosh Puthran

Join us

Do you like to be updated in Accountancy ?

Subscribe to Management Accountant by Email
Or
Subscribe in a reader

SAP Store, UK

Visit MA Stores ? You will find something you are looking for ....


You may also like to read

  1. Cultural Web - A big challenge 22-June-08
  2. Activity Based Management - Dispelling the myths Part I - 13-June-08
  3. Activity Based Management - How to collect info 10-June-08
  4. 10 myths about ABC by SSRK 26-Nov-06
  5. Transfer Pricing 29-Dec-06
  6. Throughput Accounting 17-Dec-06
  7. SSRK's Knowledge Repository 03-Dec-06
  8. Stakeholder Analysis 19-May-08
  9. Resistance to Change 26-Apr-08
  10. Strategy Development 05-Apr-08
  11. Strategic Drift 12-Apr-08
  12. How to Share Blog posts with friends 25-May-08
  13. Management Accountant Blog Home

Subscribe to RSS Feeds and be up-to-date

  1. Management Accountant
  2. Accountancy News
  3. My Favorite Blogs that I track
  4. SAP Jobs & Opportunities
Labels:

Comments

Rajendra Patil said…
Santosh

REcently I have been talking to various Big Indian services provider companies and they are interested in starting Management Accounting Outsourcing. I am helping them to start the Activity Based Costing and Management outsourcing.

I would be supporting in conceptualizing the service, buliding the capacity of their team, pre-sales and delivery.

One of the patent offices in Europe is already getting this kind of work done. They are using SAS ABM solution.

I hope more and more of this type of work is outsourced to India.

Rajen Patil
rajendra@appsconsulting.in
+91 98226 19986
24 June 2008 at 15:19:00 BST
SBL BPO Service said…
It will be thankful if u can describe regarding the foreign economy process in the above subject

Regards

SBL - BPO Services
17 October 2008 at 04:57:00 BST
Post a Comment

Popular posts from this blog

Throughput Accounting

Throughput accounting (TA) is an alternative to cost accounting proposed by Eliyahu M. Goldratt. It is not based on Standard Costing or Activity Based Costing (ABC). Throughput Accounting is not costing and it does not allocate costs to products and services. It can be viewed as business intelligence for profit maximization. Conceptually throughput accounting seeks to increase the velocity at which products move through an organization by eliminiating bottlenecks within the organization.


Cost (or Management) accounting is an organization's internal method used to measure efficiency. Since no one outside the organization uses such internal accounts for investment or other decisions, any methods that an organization finds helpful can be used.


Throughput accounting improves profit performance with better management decisions by using measurements that more closely reflect the effect of decisions on three critical monetary variables (throughput, inventory, and operating expense — defin…
Post a Comment
Read more

Learning Curve Theory

Learning Curve Theory is concerned with the idea that when a new job, process or activity commences for the first time it is likely that the workforce involved will not achieve maximum efficiency immediately. Repetition of the task is likely to make the people more confident and knowledgeable and will eventually result in a more efficient and rapid operation. Eventually the learning process will stop after continually repeating the job. As a consequence the time to complete a task will initially decline and then stabilise once efficient working is achieved. The cumulative average time per unit is assumed to decrease by a constant percentage every time that output doubles. Cumulative average time refers to the average time per unit for all units produced so far, from and including the first one made.

Major areas within management accounting where learning curve theory is likely to have consequences and suggest potential limitations of this theory.


Areas of consequence:
A Standard Costing …
1 comment
Read more

Resistence to Change - Approaches of Kotter and Schlesinger

The Six (6) Change Approaches of Kotter and Schlesinger is a model to prevent, decrease or minimize resistance to change in organizations.
According to Kotter and Schlesinger (1979), there are four reasons that certain people are resisting change: Parochial self-interest (some people are concerned with the implication of the change for themselves ad how it may effect their own interests, rather than considering the effects for the success of the business)Misunderstanding(communication problems; inadequate information)Low tolerance to change (certain people are very keen on security and stability in their work)Different assessments of the situation (some employees may disagree on the reasons for the change and on the advantages and disadvantages of the change process) Kotter and Schlesinger set out the following six (6) change approaches to deal with this resistance to change: Education and Communication - Where there is a lack…
1 comment
Read more