The KPO or Knowledge Process Outsourcing industry has been a major contributing player to the economy in India. Processes like market research, legal services, data analytics, pharmaceutical data processing, content and publishing services are on a regular path to India from offshore companies. The market here is all set to grow exponentially by the year 2015.
Indian KPO Industry
The Indian KPO industry has had an edge over the global industry since its inception. The highly skilled employee base combined with the low cost of every imaginable resource makes for a potent combination. The number of personnel with skill and experience has been on a steady rise, along with the rise in demand for specialized domains such as clinical trial management and legal process outsourcing.
KPO was a by-product of the Business Process Outsourcing wave. The overnight success of the business model sparked a rethink in utilizing the model in various other avenues. Numerous firms started offering high-end knowledge services to offshore companies. Once the Knowledge Process Outsourcing business model caught steam, more and more companies turned to India for all their knowledge service requirements.
KPO industry growth rate in the past
The growth of the industry although astronomical, can be traced back in time. The KPO industry between 2003 and 2004 earned a total revenue of 1.2 billion US dollars. The figure rose to 4.4 billion US dollars between 2006 and 2007. The total number of employees in the knowledge outsourcing business totaled about 34,000 and106, 000 in 2003-2004 and 2006-2007 respectively. A growth rate of 54 percent made the KPO industry gilt edged.
The Business Process Outsourcing industry on the other hand faced a slower rate of growth at only 27 percent. The revenue generated from business outsourcing model was however significantly larger at 15.8 billion US dollars between 2006 and 2007.
Despite the business process outsourcing model gaining ground slower, the knowledge process outsourcing arena has seen a steady growth and will continue to do so according to industry bigwigs.
NASSCOM growth prediction of KPO
The National Association of Software and Service Companies (NASSCOM) predicts that of the growing global KPO industry, India will hold the biggest share of the pie at 70 percent. Assocham predicted that the KPO industry in India is all set to reach dizzying heights by the year 2015.
The 20 billion US dollar industry at present will touch 30 billion US dollars by the end of the year 2015 owing to an increase in knowledge based services.
A quote from an ASSOCHAM study “Current scenario of Indian KPO Industry” validates the expected growth by saying, “The rising demand for professional-based services is expected to drive the growth in the industry. It would be in areas of research for capital and financial markets, legal and editing jobs for international publishing houses, among many others.”
Given that the need for professionals is spread over so many varied domains, the demand for educated professionals in India will also subsequently rise. Professionals in fields such as medicine, engineering, management, legal, accountancy and company secretary services will find an array of jobs beckoning in the KPO industry.
With the sector currently providing employment for nearly 3.5 lakh graduates, the number will nearly double in the coming years. Projected employment for 6-8 lakh people is predicted in this particular genre.
This growth is not however free from competition or problems. India has both in equal measure. Stiff competition in the outsourcing arena has been flowing in from the Philippines, Russia, China, Poland and Hungary as they are all vying to get the ravaged economic arena back on track. The competing countries offer low cost services with the added advantages of distance and location, marketing capabilities and expertise.
Popular KPO services in India
ASSOCHAM secretary was quoted as saying, “It is the kind of shortfall predicted between target and realistic growth which is worrying. If the industry is unable to sustain the momentum, it is quite possible that other alternative destinations will become attractive for clients.”
According to the ASSOCHAM report the popular KPO services Include:
- Equity research
- Intellectual property research
- Medical and legal research
- Business and market research
- Research reports
- Financial research
No prediction and future growth charts can claim to be fool-proof. Predictions by nature are made on a set of assumptions. How the general economic and industry conditions will pan out cannot be cast in stone. Whether the KPO industry will strike out at 30 billion US dollars in 2015 remains to be seen.