KPO is outsourcing business services related to knowledge, information, and judgment to workers in different countries. India currently provides most KPO services, but the number of KPO companies in the Philippines is growing. KPO has potential for IT, ITES, and other industries. Advantages include cost and time savings, while opponents argue it may lead to job loss and security risks. KPO differs from BPO, which involves standardized routine processes.
KPO, an acronym for Knowledge Processing Outsourcing, is the outsourcing of business services relating to information, knowledge, or judgment, usually to workers who live in a different country. The type of services that KPO companies provide require employees with great communication and analytical skills. The ideal KPO employee is a college graduate, well educated, possessing a high degree of computer literacy and English proficiency.
KPO companies are popping up in countries with large numbers of people who are willing to work for lower wage rates than their counterparts in developed countries. Currently, India provides most of the KPO services, but the number of KPO companies in the Philippines is constantly growing. Countries such as China, Israel, Russia, Ireland and the Czech Republic are also expected to have businesses offering KPO services in the future.
Proponents of the outsourcing trend claim that KPO has great potential for the Information Technology (IT) and Information Technology Services (ITES) industries. They also see KPO companies as a potential source for conducting a wide variety of intellectual research, including clinical, pharmaceutical, banking, legal, sales and marketing. Other industries that can benefit from using a KPO company are those that need multiple designers, animators, database developers, writers and content developers.
There are several advantages to using KPO companies. By outsourcing non-core business activities, organizations will definitely save a lot of money and time. Companies can also gain greater operational efficiencies because they can focus on key growth areas in their industries rather than spending time and manpower on basic research and development.
Opponents of KPO policies argue that if the outsourcing trend continues, many millions of workers in the United States will lose their jobs. Furthermore, companies using offshore KPO companies may risk the security and confidentiality of customer data and information. Companies using KPO services may also find that they cannot receive high quality results when work is done at low-cost companies that hire low-wage employees.
KPO can be considered a cutting-edge activity of the business process outsourcing (BPO) industry. There are several differences between the two, however. Where KPO is about intellectual and analytical processes completed by educated and trained employees, BPO is about standardized routine processes performed by workers with minimal skills. Despite the growth of the KPO market, BPO companies are not yet going extinct. Growth is expected in the areas of basic data entry, data processing, accounting and technical support.
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