Knowledge Process Outsourcing (KPO) - An emerging opportunity

Knowledge Process Outsourcing (KPO) is off-shoring 'knowledge-based' business/activities to locations that offer domain expertise, technical skills, operational efficiencies and cost benefits.

India is considered by far the most attractive KPO destination, due to competitive salaries

The Kelly Services KPO whitepaper released in August 2006 provides insights into current trends in the KPO industry.  It finds that the outsourcing business which started with Business Process Outsourcing (BPO) is now propelling explosive growth in the outsourcing of knowledge process work.

Some of the key findings of the Kelly Services KPO study include:

1. Improved, lower cost communication modes and attitudes towards globalisation are leading to increased outsourcing.
2. Global KPO is projected to be one of the highest growing businesses in the coming decade, with an estimated 45+% growth per annum. 
3. Various industry domains use KPO to improve productivity, and new segments are emerging as companies outsource to focus on core activities.
4. India is expected to achieve a very high growth rate in all the technically advanced segments of the KPO industry, with Data/Market Research and Medical/Pharmaceutical R&D constituting 50+% of KPO business in India. 
5. With such rapid growth in the KPO business, for India to maintain her advantage of a cost-effective and high quality human resource, there is a need for more professionals with relevant training/education to keep pace with the growth.

The KPO segment requires much higher technical/domain skills and business expertise.

With three million graduates per year, India is expected to outperform every other potential off-shore outsourcing destination, including China, for many years to come.

India also has the world’s second largest reservoir of Engineers, Scientists and Managers, and the largest pool of manpower with a high standard of proficiency in English.

It is therefore not surprising that most estimates project that India will corner two thirds of the global KPO business – an impressive $12 billion in the next 5 years - employing over 250,000 people.

Recognising the huge potential for quality manpower in KPO, Kelly Services India has set up a special team trained to fulfil the recruiting needs of this rapidly growing industry segment.

Unlike BPO, where the recruiting process is relatively simple and aims to check voice, accent or data entry & attitudinal skills, the KPO recruiting process has to be much more complex.  It also involves evaluation of domain knowledge, intelligence, analytical & data mining skills, decision making abilities conceptualising skills, verbal and written communication skills, attitude and ability to work in teams and under pressure.

In the Indian context, KPO salaries can be 25-50% higher than those offered to the same domain experts in conventional jobs - including Engineers, Doctors, CAs, Lawyers, Architects, Biotechnologists, Statisticians, MBAs, Economists etc. 

Even so, the roles of the KPO organisation and the recruiting agency are extremely important in convincing professionals to consider this new industry as a suitable career opportunity.  They must take the lead in explaining the nature of the work and future prospects to attract professionals to KPO jobs.

The study also highlights the important role of the government in making India the preferred destination for KPO through creating simple regulations and processes, improving infrastructure and marketing 'Brand India' to promote India's competitive edge in terms of skills, people, technology and processes.

Download a full copy of the whitepaper here.