Knowledge Process Outsourcing (KPO) is a form of Business Process Outsourcing. However, it is not mere business processing, but adds intellectual value to it. . This form of outsourcing requires more decision-making, intensive research, and analyses. A typical KPO necessitates very high levels of critical and reasoning skills coupled with proficiency in the specific field and good language.
KPOs perform a wide array of tasks:
Reasons for the growth of KPO industries:
- Research into Intellectual Property rights involving drafting of applications for patent, licensing and mapping.
- Legal processing service: Research of legal matters, legal support for individual clients and companies and legal counseling are the various tasks that Legal Process Outsourcing companies (LPOs) undertake.
- Financial and Insurance related research, studying market trends
- Business and Sales research: market studies and analyses , client profiling, consumer tastes trends,
- Data management
- Human resource developmental studies
- Engineering services
- Medical research service, health care
- Pharmaceutical sector
- Biotechnology services
- Distance education
- Animation and simulation services
- Writing and content development
The progress of KPO has been rapid for many reasons. As pointed out earlier, a KPO demands high degrees of analytical reasoning, logic and management skills. In America and western European countries, there is a shortage (in relation to the demands) of professionals. Even when they are available, they are very expensive. These are available in countries like India and Philippines. They are also ready to work for much cheaper salaries than their counterparts in the west are. This has been the prime factor for the growths of KPOs .They enhance profits in other ways too. Trained and experienced employees bring with them efficiency and speed in their domain. The quality of work picks up and the work is completed on time. There is no need for the companies to waste their time and energy in in-house management of an unwieldy organization. The risks involved are minimized too.
Guidelines for better risk management:
- Before engaging a service provider, its credentials have to be verified. Due importance should be given to the quantity and quality of experience of the potential vendor. Feedbacks from former customers can be sought to ascertain the quality of service. Establishing the antecedents of the company is vital to ensure that there is honesty and transparency in all its dealings.
- Information regarding the financial condition of the potential server is vital. Find out if the vendor company is certified or not- if it has an ISO and CMM or not.
- Estimation of costs should be realistic and correct. Hidden costs include investments in infrastructure and training to update existing skills, cost of maintenance, and the reduction in profits at the time transition. Then, there are the more apparent costs like those incurred in seeking the services of consultants, legal experts and for licensing. This will go along way in ensuring the success of the partnership.
- The vendor firm should comply with all laws that affect it.
- Good communication skills are indispensable.
- The expectations of the outsourcer and the service provider should match. They should be realistic and achievable.
- Understanding the work ethics and culture of the service providing company especially if it is an off shore one is critical.
- A contingency plan should always be kept in readiness to meet situations that can be otherwise cause disaster.
- Much of the success of the KPO depends on its employees. Apart from being skilled, efficient, cost effective, adaptable, and resourceful, they have to be completely straightforward in their dealings. Safety and confidentiality of data and finances have to be secured.