KPO vs BPO: Difference between KPO and BPO

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.

	BPO	KPO
Definition	BPO provides services like customer care, technical support through voice processes, tele-marketing, sales, etc.	KPO provides in-depth knowledge, expertise and analysis on complex areas like Legal Services, Business and Market Research, etc.
Stands for	Business Processing Outsourcing	Knowledge Processing Outsourcing
Requires	Good communication skills and basic computer knowledge	Specialized knowledge
Services	Low end services	High end services
Process	Pre-defined process	Requires application and understanding of business
Employees	Not so qualified employees	Skill and expertise of knowledge employees
Expertise in	Process	Knowledge
Relies on	Cost arbitrage	Knowledge arbitrage
Driving force	Volume driven	Insights driven

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.
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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.