The Insider’s Guide to Knowledge Process Outsourcing (KPO)
Business Process Outsourcing(BPO) has a thriving contribution to organizations. BPOs have turned out to be the perfect solution to manage operations for the companies, and why not? After all, BPOs are doing tremendously great since always, and it is growing more day by day.
Until now, you have heard about the BPO and its working approaches, what tasks are covered in it, and so on. Today, we have compiled a guide focused on Knowledge Process Outsourcing (KPO), one of the subsets of BPO, but the services of KPO are poles apart from BPO, which you will get to know in this composition.
This guide will let you learn everything related to KPO and how it is emerging as one of the most crucial factors for organizations. So without any further ado, let’s delve in.
What is Knowledge Process Outsourcing (KPO)?
KPO is an abbreviation for Knowledge Process Outsourcing, and this outsourcing includes highly skilled personnel to transfer or assign knowledge and the process allied to another company. As the term says, Knowledge Process Outsourcing involves excessive knowledge-based and skilled professionals to perform high-level tasks.
In KPO services, the expert needs to work on the research and information related to intellectual property for patent applications, equity, legal, medical, business, market, etc. These type of service providers offer their services, such as information technology, accounting and finance processes, to various different types of clients.
KPO includes the Key Performance Indicators(KPI) model for effectively addressing client needs. These types of projects require a long-term approach with no fixed time limits due to their highly project-based nature of KPI calculation.
Herein, the company hires other outsourcing companies that are supposed to fulfill the requirement of a company; it can be in the same country or outside, but the main objective behind this is to reduce the company’s cost.
It performs a task where high mastery and qualification are required with specialized knowledge, expertise, and a great interpretation power.
Types of Knowledge Process Outsourcing(KPO)
- Financial Consultants
- Research and Development (R&D)
- Business Operations (Management Consulting)
- Technical Analysis
- Investments Research Activities
- Legal Process Outsourcing
- Medical & Healthcare
- Data Analysis and Interpretation
- Corporate Training Services
- Education and Learning Solutions
- Writing and Content Development
Difference Between BPO and KPO
Though KPO is a sub-segment of Business Process Outsourcing, yet the work of both is exceedingly different. BPO services include the work related to human resources, payroll, call center, customer care services, etc. Whereas KPO handles more complex work than that of BPO services. Let’s check on the key differences below.
- BPO can be understood as the outsourcing of non-core activities to the third-party service provider for service to minimize the cost of the company and maximize productivity and proficiency of the company, whereas KPO defines it as the outsourcing of highly skilled personnel for transfer or assignment of knowledge plus process correlated with processing to another company.
- BPO are Human Resources, Customer care, Technical support, Technical solutions, Finance, and accounting services. Services covered by Knowledge Process Outsourcing are Investment research activities, Market research activities, Data analytics, Business research services, Legal process outsourcing.
- BPO is based on rules, and in contrast, KPO is based on the judgment of the personnel.
- BPO doesn’t necessarily require highly qualified employees, but for Knowledge Process Outsourcing, qualification and knowledge are very much compulsory.
- Team working under BPO must have good communication skills while such things are not essential in KPO, here high-comprehension and knowledge is required to understand the complexity of the business.
- As mentioned, BPO focuses on the low-level process, which is less complex, whereas KPO focuses on the high-level process, comparatively more complex.
- In BPO, low coordination and collaboration are needed, whereas, in KPO, excessive coordination and collaboration are required.
- BPO is volume-driven, while Knowledge Process Outsourcing is insights-driven.
- BPO relies on cost arbitrage, and in contrast, as the name suggests, KPO depends on knowledge arbitrage.
- In BPO the process is pre-defined, and on the contrary, Knowledge Process Outsourcing requires application and apprehension of business.
Advantages of Knowledge Process Outsourcing (KPO)
- KPOs save costs and are effective solutions to handle business operations, which cover intellectual tasks, like decision-making.
- Knowledge process outsourcing bridges the vacuum gap in a particular area that emerges due to the inefficient and inadequate staff.
- Instead of examining and evaluating, the operational staff gets indulged with their core competencies. It gives a great boost to business productivity.
- The KPOs offer adaptability to opt-in or out experienced professionals at any point in time, which multiple organizations often take as a challenge to recruit or expel qualified men of expertise at any time.
- Many industries find it like a reward to swiftly adopt the trend and alter the domain for sustaining in the market.
Risks of Knowledge Process Outsourcing
- If you are opting for a KPO, get prepared to take on the risk of submitting confidential data. It can be copied and traded to competitors in the industry, so it has a risk. However, a reliable outsourcing company is safe and secure and does the work based on legal terms.
- As Knowledge Process Outsourcing companies look into staffing, the company loses command over recruitment. Therefore, it fails to map the performance and efficiency of each employee. Subsequently, it can be a bit tricky.
- KPO deals with deriving intelligence, which is a time and energy constraint. Therefore, it may cost an arm and a leg for a specific solution.
- Communication is essential for coordination, which they often avoid due to bilateral and legal challenges, language and cultural barriers.
- Hiring a Knowledge Process Outsourcing company can evolve the feeling of being challenged by the in-house staff.
Conclusion
As you can see, knowledge process outsourcing has many benefits, including this in their business. But as it is often compared with BPO, it is essential to understand the difference between them.
Thus, along with the KPO, we have covered its comparison with BPO so that it can give a clear picture to you.
Both BPOs and KPOs have their perks, giving benefits in several approaches for any company that outsources the operations to a genuine outsourcing firm. You choose which one you choose based on the niche of business you have and what specific jobs you are thinking to outsource. The insightful mind and training required for your objectives will most likely be the deciding feature in your verdict between a Business and Knowledge Process Outsourcing.
Choose Tru Performance for either of the outsourcing services and experience growth in your overall business.
