KPO, also referred to as “Knowledge Services”. It cuts into the traditional “core competencies” of many organizations.
While cost reduction seems to have been the prime motivator of the ITO and BPO waves, “intellectual arbitrage” seems to be the key driver for KPO services.
Knowledge Process Outsourcing (KPO) enables clients to unlock their top-line growth by outsourcing their core work to locations that have a highly skilled and relatively cheap talent pool.
There is a good mix of both third-party and captive structures in the KPO industry at present. KPMG expects hybrid multi-sourcing models of KPO to emerge in the near future. They will likely consist of captive units managing relationships with third-party KPO providers.
Acquiring the necessary skill sets, attracting talent, protecting intellectual property and managing conflicts-of-interest will likely be the major challenges facing the KPO industry over the next three years.
India is currently the leading country providing KPO services. However, other countries have the potential to capture significant KPO market share, by better leveraging the depth and maturity of existing skill sets, and in some cases, their non-English language capabilities.
Various sources of market research predict the KPO industry to be worth anywhere between US$10 billion to US$17 billion by the year 2010.
Examples of KPO services
Equity, Financial, Insurance Research
Market Research and Competitive Intelligence and General Business Research
Data Analytics, Integration and Management
Research and Information Services in HR
Intellectual Property, Paralegal Content and Services