Outsourcing of routine or peripheral business functions is
in vogue. It implies contracting with the third party service provider, with
respect to operations and responsibilities of business processes. At present,
there is hardly any multinational company which is left untouched from
outsourcing its business operations. Over the time, Business Process Outsourcing
(BPO) has gained ample importance, by providing services related to
marketing, human resources, customer support, technical support, etc.
Knowledge Processing Outsourcing or KPO is a subset of BPO. KPO
involves outsourcing of core functions which may or may not give cost benefit
to the parent company but surely helps in value addition. The processes which
are outsourced to KPOs are usually more specialized and knowledge based as
compared to BPOs. Services included in KPO are related to R&D, Capital and
insurance market services, legal services, biotechnology, animation and design,
etc. are the usual activities that are outsourced to KPOs. LPO or Legal Process
Outsourcing is special type of KPO dealing with legal services.
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BPO
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KPO
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Definition
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BPO
provides services like customer care, technical support through voice
processes, tele-marketing, sales, etc.
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KPO
provides in-depth knowledge, expertise and analysis on complex areas like
Legal Services, Business and Market Research, etc.
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Stands
for
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Business Processing Outsourcing
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Knowledge Processing Outsourcing
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Requires
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Good
communication skills and basic computer knowledge
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Specialized
knowledge
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Services
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Low end services
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High end services
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Process
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Pre-defined
process
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Requires
application and understanding of business
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Employees
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Not so qualified employees
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Skill and expertise of knowledge
employees
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Expertise
in
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Process
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Knowledge
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Relies on
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Cost arbitrage
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Knowledge arbitrage
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Driving force
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Volume driven
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A BPO is capable of handling both
front end and back end operations of an entity. BPO provides an array of
services such as:
- Customer care, i.e. call center, help desk, etc.
- Human resources, i.e. recruitment and selection, training and placement, payroll processing, etc.
- Technical support
- Services related to finance and accounting.
- Website services, i.e. web hosting, etc.
- Transcription
The
spectrum of services provided by KPO includes:
- Investment research services
- Market research services
- Data analytics
- Business research services
- Others: Legal Process Outsourcing, Financial Process Outsourcing, Media Process Outsourcing.
Conclusion
Almost all the transnational companies, today, outsource their non-core activities, just to pay attention to their primary business. Both forms of outsourcing work in a B2B environment where the service provider and buyer of services both are business organizations.One thing must be kept in mind that KPO is nothing but an extended version of BPO. Over the time, it has been observed that with the expansion of KPO, the BPO is losing its existence. Now, the service provider companies provide both BPO and KPO services simultaneously to the organization.