Forget BPO, It’s Time for KPO!!!

While sipping my second glass of wine with my buddy (Sourin), we got affianced into our discussions of opportunities in India, the Infosys’s, Wipro’s, IBM’s and got into the gamut of Business Process Outsourcing. While going thru these thoughts, Sourin mentioned about K.P.O and since then I have been reading and pondering over this new and upcoming business opportunity.

I have compiled some data and articles on it and would like to share with my blog-readers. Here you go…

The acronym BPO is passé. It's time to move up the value chain for the Indian BPO industry to KPO, a niche, high-value knowledge process outsourcing business. Globally, the KPO pie is estimated to touch $25 billion by 2010. By that time, India would command a 60% market share, with an employee requirement of over 3,00,000 said recent study conducted by Evalueserve.

The KPO landscape is getting increasingly visible in the country with players like WNS, Evalueserve, Thomson Financials, GE Analyticals, Bear Sterns, Goldman Sachs, JP Morgan Chase and Reuters expected to play a dominant role. In addition to this, over a dozen existing BPO firms are gradually migrating into value niches.

Typical users of KPO services are market research agencies, consulting firms, investment banks, financial institutions, legal firms, telecom, engineering/design, automotive companies and corporate planning departments of large enterprises. Foreign small and medium enterprises are also looking at KPO services to cater to their high-value project-specific activities.

"Global companies are looking at ways and means to create intellectual properties for their clients across verticals like healthcare, pharma and life sciences, chemicals, engineering, business and commercial information, research and database services," said Narayanan Ramaswamy director of KPMG.

How is KPO different from BPO?

BPO is entirely rules-based while KPO is purely judgment-based where human discretion plays a dominant role. KPO includes an entire gamut of services like intellectual property, legal and medical researches, R&D, pharma, biotechnology-related researches and process outsourcing, data mining, analytical services like equity research, market research, content and journalistic outsourcing, data cleansing, data validation, data analysis, formation of libraries, indexing, cataloging, creation and updating of databases and directories, to list a few. Services under KPO are still emerging.

"Indians are good at brain works, analytical, logical and arithmetical skills. The growing Indian diaspora has been creating an impression among international community that Indians are good at intellect-driven skills," said Chandu Nair, president, Scope e-Knowledge Centre, a Chennai-based KPO firm.

However, winning KPO deals is not an easy proposition. "It demands intrinsic domain knowledge, a good amount of trust, impeccable track record, long-standing client relationships, deep research skills, strong management capabilities and sound technical know-how," said S. Ramakrishnan, CEO of Marketics, a Bangalore-based KPO firm.