Rod Jones - An Introduction To KPO June 09


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Towards Knowledge Process Outsourcing

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Rod Jones - An Introduction To KPO June 09

  1. 1. LIMPOPO BPO INDABA<br />- 25 June 2009 -<br />Towards Knowledge Process Outsourcing<br />Rod Jones – BPO & Contact Centre Consultant <br />
  2. 2. Towards Knowledge Process Outsourcing<br />What trade, industrial and manpower capabilities should Limpopo posses in order to move up the outsourcing value chain … from BPO to KPO ?<br />
  3. 3. Knowledge Process Outsourcing<br />From Wikipedia,<br />Knowledge process outsourcing(KPO) is a form of outsourcing, in which knowledge-related and information-relatedwork is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost. <br />Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.<br />
  4. 4. Some Key Points<br /><ul><li> A fully developed service economy enables KPO by treating all functions as services.
  5. 5. KPO demands advanced analysis and communication skills so specific higher education and language skills are essential.
  6. 6. KPO is at the high-end of BPO</li></li></ul><li>Examples of KPO<br /><ul><li> Business & Technical Analysis
  7. 7. Research & Development
  8. 8. Learning Solutions
  9. 9. Animation & Design
  10. 10. Business and Market Research
  11. 11. Pharmaceutical & Biotechnology Research
  12. 12. Medical Services
  13. 13. Writing & Content Development
  14. 14. Legal Services
  15. 15. Intellectual Property Research
  16. 16. Data Analytics
  17. 17. Network Management</li></li></ul><li>Key Differences<br />BPO<br />KPO<br /><ul><li>Size (economies of scale)
  18. 18. Volume
  19. 19. Efficiency
  20. 20. Price
  21. 21. Depth of Knowledge
  22. 22. Experience
  23. 23. Judgement </li></ul>&lt;$10-$15 per hour*<br />$30-$40 per hour*<br />* Average India / Philippines <br />
  24. 24.
  25. 25. The Challenges of KPO<br /><ul><li> Maintaining High Levels of Quality
  26. 26. Investment in KPO Infrastructure
  27. 27. Lack of Talent Pool
  28. 28. Higher Levels of Control
  29. 29. Confidentiality
  30. 30. Risk Management
  31. 31. Lack of Infrastructure </li></ul>Getting the contracts ! <br />
  32. 32. The Way Forward<br />Suggestions and Recommendations <br />Developing the BPO/KPO industry in Limpopo<br />
  33. 33. Recommendations<br />Formal Research<br />Understand the metrics and the nature of the existing industry in Limpopo.<br />Conduct a formal Regional Study<br />Develop clear domestic and international development strategies<br />Build a strong Regional Association and/or Professional Body.<br />Form a Public-Private Partnership with Government<br />Prioritise Training and Skills Development<br />Adopt, adapt and regionalise existing internationally recognised training processes and materials.<br />Adopt international training standards and certification<br />Introduce internationally recognised call centre, contact centre and BPO standards<br />Align with ISO developments<br />
  34. 34. Convince government to outsource non core call centre activities to the private sector.<br />Look for ‘Quick Wins’ to develop high-quality government service delivery.<br />The industry (through the Association) must be highly visible and vocal.<br />Build relationships with national and international media.<br />Association (or PPP) must be self-funding from the outset.<br />A sustainable business model.<br />Learn from your neighbours.<br />
  35. 35. Winning at the International Call Centre and BPO/KPO Game<br />Understand Limpopo’s real strengths and weaknesses.<br />Understand the competitive marketspace.<br />Develop a Unique Value Proposition for Limpopo.<br />Engage professionally with international prospects.<br />Professional marketing programme<br />‘World Class’ website<br />Professional sales representation in Europe and US. (Full time executives)<br />
  36. 36. What do International Outsourcers Look For?<br />Long-term competitive advantage through cost-saving.<br /><ul><li>Limpopo MUST be able to guarantee at least 30% to 40% cost saving to UK, European or US outsourcers.</li></ul>The 4 C’s<br /><ul><li>Cultural Fit (Including language and accent)
  37. 37. Operational Competence
  38. 38. Capacity
  39. 39. Credibility</li></ul>Risk Management<br />
  40. 40. 1: COST ADVANTAGE<br />Recognise that international customers are highly sophisticated and accustomed to negotiating complex BPO contracts.<br />Be able to display Total Cost of Ownership and/or ROI models for 3-5 or even 10 years.<br />Be able to relate and compare with other international BPO locations.<br />Consider and have facts relating to:-<br />Transition costs<br />Set-up Costs<br />Grants and subsidies <br />
  41. 41. 1: COST ADVANTAGERECOMMENDATIONS<br />Develop a sophisticated costing model.<br />Calibrate with data from existing regional outsource contracts.<br />Allow for complex “what if” scenarios.<br />Allow for Country vs Country comparisons.<br />Simplified ‘on-line’ version.<br />
  42. 42. The 4 C’s - # 1 Cultural Fit<br />Maintain a close watch on the ‘anti offshore lobby’ in UK, Europe and US.<br />Ensure high quality language and accent skills.<br />Develop ‘Cultural Alignment’ models.<br />Explore unique ‘niche’ opportunities.<br />E.g. Non-Voice BPO processing<br />
  43. 43. 1: COMPETENCERECOMMENDATIONS<br />Align the industry in Limpopo with one or more of the International Call Centre qualification certification and accreditation bodies. <br />Subscribe to and implement extremely high operational standards (e.g SABS or ISO)<br />Rapidly define and implement formal training for all operational levels – particularly Call Centre Management and Supervisory Skills.<br />Implement on-going specialised skills training.<br />Embark on ‘fast track’ Train-the-Trainer programmes to build local competencies.<br />
  44. 44. The 4 C’s - # 3 Credibility<br />Establish a strong PPP-based Industry professional body.<br />Employ highly qualified and experienced management.<br />Import or contract the talent on a strict skills transfer model.<br />Align with respected regional and international organisations and bodies.<br />Use independent international consultancy to carry out competency audits on existing contact centres and BPO Centres in Limpopo.<br />Actively promote positive case studies<br />
  45. 45. The 4 C’s - # 4 Capacity<br />RECOMMENDATIONS <br />Major outsourcers demand:- <br />Low rates of staff turnover.<br />Appropriate labour pool – both unskilled and experienced (Particularly supervisors)<br />Assurances that competition and industry growth will not lead to unrealistic wage escalations.<br />Establish a contact centre, BPO and KPO skills development academy.<br />Implement contact centre and BPO ‘Career Days’ at high schools, universities and colleges.<br />Offer incentives to international clients to ‘cross train’ in Limpopo.<br />
  46. 46. 3: RISK MANAGEMENT<br />Recognise that all serious outsourcers will use sophisticated Risk Assessment Models.<br />Many of these models will have been developed by high-profile international consultants.<br />Pre-empt this reality and develop a credible risk analysis and risk mitigation tool set.<br />Risk description<br />Risk Severity<br />Probability of Risk<br />Controllability of Risk<br />Mitigations<br />
  47. 47. Develop & Deploy <br />International Marketing<br />Develop Regional<br />Value Proposition<br />Refine International<br />BPO / CC Entry Strategies<br />Deploy Regional / <br />Domestic Development Plan<br />Develop Regional Policy <br />& Solution Options<br />Develop Regional BPO and CC<br />Risk Model<br />Develop BPO and CC<br />Costing Model<br />8 - Phase Industry Development Programme<br />Input Source<br />Results Flow<br />Regional Study <br />and Sector Survey<br />
  48. 48. Key Points<br />Research and Industry Knowledge – (Domestic market)<br />Gather International BPO industry knowledge<br />Identify labour pool and training requirements.<br />Establish professional body / association / PPP<br />Establish Training Standards / Materials / Accreditation / Certification<br />Establish operational Standards for call centres and BPO<br />Craft a domestic industry development strategy.<br />Government outsourcing and shared services centre/s<br />Craft an international BPO Value Proposition and development strategy.<br />Ensure Competencies<br />Ensure Capacity<br />Ensure Credibility<br />
  49. 49. So…..<br />Let’s get to work..<br />Knowledge Processing<br />LIMPOPO STYLE !<br />