Knowledge Process Outsourcing Basics

Knowledge process involves high value work. The objectives are dependent on advanced domain knowledge, highly skilled people’s expertise and experience. When knowledge related and information related processes are outsourced to another location, another company or a subsidiary of the same organization which may be in another country or an offshore location to save cost its is known as “Knowledge Process Out sourcing” or KPO.

For KPO, the transition is different as it is not rule based and rarely requires real time turnaround, it is more based on nature calling for problem solving and requires expert decision making rather than being continuous process.

Process in KPI involve financial analysis, planning, budgeting, industry/completion analysis, product research or cross-sell strategies, order to cash cycle optimization strategies, actuarial services, risk management, investment banking research, pricing analytics and strategies, data analysis and modeling etc.

Some of the factors related to meet SLA (Service Level Agreement) of this industry are as follows:

  1. Accuracy or Quality:  Involves regulation, quality of calls. Vendors have Quality Compliance Analysts to review quality. Accuracy acceptable is 85 to 99.95 percent.
  2. Timeliness, Speed or Resolution : Provides details of average turnaround time, average speed, providing solution in minutes/hours/weeks for projects.
  3. Productivity : This checks on the efficiency, for example, the number of call completed than the number of calls attended.
  4. Customer experience: involves transitioning basic call centre processes to those requiring high level decision making. Ownership of process is with client. Process management, mechanism, methodology, tools and techniques are with vendor. Hence, timely reviewing the processes would offer better productivity to the clients. As vendor gain depth and expertise, they can enter into gain sharing arrangements or even patent processes.

KPO in India

As BPO companies have moved towards acquiring expertise in diverse industry verticals, India will be able to offer services from the lowest end of the value chain to the highest without interruption, i.e. from piecemeal services to End to End Solutions. Indian companies need to diversify to supply-chain services which involve tasks like order management, vendor management, vendor selection, managing suppliers, and after sales forces. KPO also offers IT services like remote server management and remote desktop management and ERP services.

The next decade will witness Indian BPO evolving to offer the widest breadth of services across multiple, but sharply defined, industry niches, from the lowest end of the value chain to the highest without interruption offering complete package. Many companies need to build their vertical expertise right from scratch either internally or through acquisitions. While historical verticals are relatively easier to scale, it is in the newer verticals and services such as insurance, healthcare and analytic that companies will face more challenges. In time India BPO companies may carve a niche in helping clients evolve new sourcing strategies. That’s when BPO will become truly KPO.

 

The KPO Value Matrix
Service Line 2003(in $ Billion) 2010(in $ Billion) CAGR(in percent)
Data search, integration and management 0.3 5 50%
Market research 0.02 0.4 54%
Equity research, actuarial analytics 0.4
Engineering design 0.4 2 29%
Animation and Simulation 0.1 1.4 46%
Medical Content and services 0.3
Remote eduction and Publishing 2
R & D 0.1 1 39%
Biotech andn pharmaceuticals 0.28 3 40%
Total 1.2 15.5 44%

Source: Nasscom

References:

  1. Wikipedia
  2. KPO Experts



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