Becoming a knowledge competitor via
Knowledge Process Outsourcing (KPO)
Jay Venkateswaran, Senior Vice President
Research and Analytics
WNS Global Services
The advantages of implementing knowledge process more rapidly achieve the end-state. KPO has a role to play in
outsourcing (KPO) vary according to the aspiration of the every company – knowledge-novice or knowledge-savvy,
organization. If a company already drives its decisions with regardless of the industry. But how an organization engages
knowledge, KPO can help more efficiently and cost effectively KPO depends on where it falls in the five levels of knowledge
retain competitive advantage. If the organization wants to competition, as illustrated in the following exhibit.
move up the knowledge competition scale, KPO can help
Current state of analytical Organizational knowledge Value derived Research and analytics
readiness capabilities footprint
Level 1 Required
n skills not extant internally Understanding on an ad hoc, Little analytical
Inability to generate Lack
n of organizational will post mortem basis as to why infrastructure
actionable knowledge n only on basic transactional
Focus it happened
functionality
Level 2 Business
n unit / function-centric Understanding of business Analytical resources
Knowledge silos within the knowledge creation and issues which must be embedded in local
organization n of vision to action / compete
Lack addressed to improve functional teams
on knowledge individual business units /
n or no information sharing
Little functions
across business units / functions
Level 3 Desire
n to leverage knowledge driven Ability to capture current Local analytical delivery
Aspire to leverage knowledge from the top conditions attempt to model in place
Efforts underway to integrate /
n understand future trends
better understand internal
knowledge capabilities
Level 4 Centralized
n efforts to understand Ability to anticipate / adapt Central enterprise-wide
Knowledge-driven business business trends holistically to changes in external / analytical structure
Knowledge creation, capture and
n internal environments to
management key driver for people obtain / retain competitive
performance advantage
Level 5 Knowledge
n driven innovation Generate consistent business CXC driven well-
Industry knowledge leader driving business growth value through insights to established analytical
Employees passionate and
n obtain competitive advantage processes embedded in
committed to analytics over competition organization
Source: Adapted from Thomas H. Davenport and Jeanne G. Harris, Competing on Analytics (Boston: Harvard Business School Press, 2007), 36.
To find out where your organization stands on the five levels of knowledge competition scale,
click here http://www.wns.com/kpoquiz
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Becoming a knowledge competitor via
Knowledge Process Outsourcing (KPO)
The graphic below highlights the four starting points from which companies can embark on the road to knowledge competition,
depending on their level of sophistication and the type of market challenges they face.
Paths to knowledge competition
Discrete knowledge Solve peripheral or readily Resource
n constrained
tasks extractable knowledge tasks with Need
n for specialized resources
modest domain knowledge Variable cost model
n
requirements
Low-to-high Start with tasks that acts as building Easy
n to implement and scale
complexity projects blocks for more complex analytics - e.g. nfailure
Low rate
start with MIS, reporting and data analytics Develop client-specific domain knowledge in
n
before forecasting and segmentation service provider
Process thread-based Partner across functions on related Benefits
n of a coordinated, program-based approach
projects knowledge tasks that support a discrete Concentration
n and standardization of analytic
process thread within an organization - activities
e.g. a new product launch Cross-training, knowledge sharing
n
Business imperative- Identify knowledge process that are Razor-sharp
n focus on imperative
based projects critical to driving enterprise-level 360o
n solution
business imperatives - e.g. stopping
share loss to a competitor
Source: WNS
Level 1 and 2 companies, those which sit relatively low on the tasks that support broader analytical capabilities. For
analytical savviness scale, will generally be best served example, it may be appropriate to commence sourcing more
beginning KPO implementation with discrete analytic tasks. investigative forms of knowledge creation such as MIS,
The goal for these organizations is to pick the “low hanging reporting and data analytics. Processes that form the basic
fruit of the knowledge tree”, commencing with a low-risk, knowledge building blocks inside the organization will help
readily extractable analytic task. Because these companies are the sourcing partner build domain expertise unique to the
just embarking on the road to competing with knowledge, company. If there are pain points and bottlenecks in these
starting with a task that is not overly complex and does not processes, the sourcing partner's process skills can remove
require much domain knowledge will increase the likelihood of them. Outsourcing these types of processes also frees up
a successful outcome. internal analytical talent from more mundane tasks, and
enables them to focus on more strategic issues. Naturally,
At these levels, organizations should focus on insights that with the right sourcing, productivity and cost efficiencies will
can be developed without the allocation of many resources, be achieved. As decisions are increasingly driven by
generally without specialized resources, and developed under actionable insights, moving up the complexity chain – to
a variable cost model. Of course, just like exercise, even processes such as forecasting and segmentation – becomes
modest focus will pay rich dividends. Better responses from the logical and anticipated next step
marketing programs, reduced fraud and better forecasting all
have hard dollar benefits. Perhaps more importantly, this is an Initial projects should be easy to implement and scale, and
opportunity to invest in a proof of concept to validate to designed with low potential for failure. Then ramping up the
internal and external stakeholders that knowledge-driven complexity fosters a strong relationship with the KPO
decision making can take competitive positioning to the next provider, giving them the opportunity to develop the company-
level specific domain knowledge that is critical to success as the
projects become more complex.
For Level 3 organizations, those which already conduct more
complex, integrated analytics processes, outsourcing as a Levels 1, 2 and 3 engagements gain most traction when they
proof of concept is still important and stakeholders will be are initially focused on a business challenge. If the problem
closely monitoring the speed of completion and the quality of to be solved is loss of market share or improvement of overall
deliverables. This suggests the right place to begin customer experience by some factor, the analytic solution will
outsourcing knowledge processes is to start with less complex resonate more strongly with stakeholders.
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Becoming a knowledge competitor via
Knowledge Process Outsourcing (KPO)
Level 4 and 5 companies, those which are already analytically decisions. Good examples are pricing analytics, supply chain
savvy, also benefit from implementing KPO as they use it to analytics, forecasting and fraud. Another way is to organize
augment their own resources and leverage the global delivery the program around top-of-mind business objectives driving
footprint of their outsourcing partners. the senior management team. For example, processes and
tasks supporting a drive to cut distribution costs –
As at the other levels, the organization gets all the benefits of supply/demand optimization, fleet utilization, forecasting,
outsourcing – refocus of internal talent, efficiencies, etc. The store lifecycle management, etc. – are well linked and can be
additional benefit KPO uniquely delivers to such companies is supported with a highly specialized skill pool.
the ability to standardize knowledge processes and make them
scalable. In these cases, remaining cutting edge in core areas Whatever the scope of the KPO engagement, it should set the
of expertise is the driver to leverage the KPO delivery model. organization on the path to competing with knowledge – or
Quality with speed, flexibility and lower cost are key benefits. moving up the knowledge savviness scale. KPO is simply an
extension of the company's enterprise, allowing a large
How should Level 4 and 5 companies get started on a KPO complex organization to consistently make smarter, better
program? These organizations have well developed knowledge decisions.
processes, particularly in pockets supporting high-impact
Author's note: This article contains excerpts and out-takes from the WNS thought leadership whitepaper entitled,
“Armed With Knowledge: Gaining competitive advantage through knowledge process outsourcing”
To access the full KPO whitepaper, visit http://wns.com/kpoforcompetitiveadvantage
Please write to us at info@wnsgs.com
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