BPO (Business Process Outsourcing) v's KPO (Knowledge Process Outsourcing) : BPO (def): BPO is commonly defined as the

leveraging of technology or specialist process vendors to provide and manage an organization's critical and/or non-critical enterprise processes and applications. Some of the common tasks in BPO include payroll, call centers and accounting. The main goal of BPO was to let firms concentrate on their "core business" meaning that with these socalled mundane tasks out of their hair, they can focus more on the things that they do best. KPO(def): KPO involves "high-end" tasks being outsourced. These tasks are defined as high-end ones because it requires in-depth analysis and perspective. Some of these tasks include legal work, research and development, web content, design, and many others. points worth to note : 1. KPO industry unlike BPO provides domain based processes and business expertise. 2. KPO is more like a challenge as it demands advanced and expertise skills on part of its employees. 3. BPO on the other hand is more or less like a commodity business which stretches more on information technology and its various sectors. 4. The BPO market is long term in nature as compared to the KPO market. With every passing day the BPO market base is expanding and so is the various processes outsourced through it. 5. BPO undertakes a. Data processing b. Basic data entry c. Setting up of a bank account d. Department Outsourcing e. Provides technical support f. Provides email support to its customers 6. KPO undertakes: a. More granular market and customer segmentation (e.g., the ability to do make retention or acquisition campaigns work at a micro-market level) b. More predictive response modeling and propensity/cross-sell/up sell modeling c. Precision marketing, churn prediction and management, customized products and services in finance, insurance, telecom services d. For retailers, store and shelf space management at neighborhood market level and store level e. Promotional efficiency tracking at micro-market level f. Category/brand performance measurement, tracking and control at micro-market level g. Market mix modeling at lower granularity levels of product, geography and time dimensions h. Precision and dynamic pricing, promotion and product portfolio design and optimization i. Primary, secondary and web-based market research j. Monetization, predictive analysis and portfolio management of intellectual property and patents k. Analytics and optimization algorithm R&D for ISVs in enterprise application areas such as, SCM, SRM, ERP, CRM, MR, BI, BPM

7. BPO will continue to derive higher revenues as compared to the KPO industry. The BPO exports

will be as higher as $20 billion by the end of 2010. By a recent study done by experts the BPO industry is expected to grow globally at a CAGR of over 26 percent by 2010. 8. KPO unlike BPO is not just restricted to information technology. It specializes in various other challenging sectors namely business research, Clinical research, Intellectual property research etc. 9. The KPO exports are estimated to be around $12 billion at the end of 2010. The future of KPO appears to be bright and is expected to achieve a high end of BPO at the end of 2010. The KPO regime looks all set and poised to accept the new challenges of high training cost and a much higher attrition rates. 10. The shorter term contracts will demand high quality work and skills on part of its workers. 11. KPO industry has accepted all these challenges and is all set to leave a mark just like the BPO brigade. Note: Firms that are considering outsourcing should therefore be clear on what kind of outsourcing they really want. If they want to focus on their core business tasks, they should opt for BPO. If they want to have added help on their business then they should consider KPO.

Knowledge Process Outsourcing (KPO) is one step ahead of Business Process Outsourcing (BPO). It started emerging in India around the turn of the century, when the global industries realized that apart from software development and technical support, knowledge work could also be outsourced. It involves transfer of business processes to other geographic locations; specialized domain specific knowledge and business expertise of a higher level rather than just process expertise. The following are the areas associated with the KPO sector. Animation & Design Advanced Web Applications Business and Technical Analysis Business & Market Research Data Analytics Financial Consultancy and Services Intellectual Property (IP) Research Learning Solutions Legal Services Medical Services Network Management Pharmaceuticals and Biotechnology Research & Development Training & Consultancy Writing & Content Development Many companies have started outsourcing their high-end processes like Market Research (MR), Equity Research, Engineering Design, Intellectual Property Rights (IPR), Legal Services, Remote Education and Publishing Operations to India after the success of BPOs. These companies outsource their processes to India for: Cost savings Operational efficiencies Access to highly skilled workforce Improved quality A KPO can provide quality work and on- time delivery with uninterrupted services. KPOs are the next big thing in the outsourcing sector. Initially, KPOs focused on data collection, updating financial models, patent searches and basic data mining. But now KPOs have also started focusing on sector insights, equity research, patent analytics, high end data mining, analysis and recommendation. Some of the hot destinations for KPOs other than India are Russia, China, Czech Republic, Ireland and Israel.

Difference between KPOs and BPOs: We can say that KPOs emerged from BPOs. BPO KPO

*It provides services like customer care, technical support through voice processes, tele-marketing, sales, etc. KPO provides in-depth knowledge, expertise and analysis on complex areas like Legal Services, Business & Market Research, etc.

*Low end services High end services *Process expertise Knowledge expertise *Pre-defined processes Requires application, understanding of business and analytical bent of mind *It employees not- so- qualified workers as it focuses on communication skills It involves skill and expertise of knowledge workers with excellent educational background.
Read more at: http://www.caclubindia.com/forum/difference-between-bpo-and-kpo-81314.asp

THE BASIC ELEMENTS THAT DIFFERENTIATE BPO FROM KPO.

There are a number of notable differences between KPO and BPO. The six elements that separate these two processes are focus, process, specialization, driving force, activities,

and client contacts.

BPO has a process which is much more simple than KPO. While BPO places an emphasis on low level processes, KPO places an emphasis on high level processes such as patent filing, investment research, and legal issues. When it comes to focus, KPO focuses on the application of knowledge rather than processes. The differences in specialization between are primary connected to their domains. Most BPO workers do not need to have a large amount of knowledge in any specific areas. The primary requirements for BPO workers are a high command of the English language and simple computer skills. In contrast, KPO workers are expected to specialize in specific fields. Some examples of fields where KPO workers are expected to have specialized knowledge are financial analysis. These professionals are expected to be qualified as a CA or MBA. When it comes to driving force, again, KPO companies place an greater important on knowledge rather than business processes. This is the exact opposite of BPO companies. The activities of KPOs are different from BPOs as well. Any activity that requires specialized knowledge will be connected to KPO, while BPO will use a rigid structure for handling business procedures. KPO workers can expect to deal with international clients on a regular basis. They will be responsible for communication issues, and direct communication will be essential in situations where complicated tasks must be performed. A number of people have said that there are few differences between KPOs and BPOs. In reality, KPOs are simply one end of the spectrum. The KPO is an extension of the BPO, and allows

businesses and organizations to carry out a large number of processes. There are a number of powerful advantages that can be gained from Knowledge Process Outsourcing. When work is outsourced to other countries, companies in the developed nations can save large amounts of money on the cost of manufacture. A number of studies have indicated that these savings are as much as 40% to 70%. In addition to this, the profits that are created by the use of KPOs are double the revenues that are obtained from BPOs. While BPOs have statistically brought in about $11 per hour, KPOs have been shown to bring in as much as $24 per hour. Perhaps one of the most powerful advantages of Knowledge Process Outsourcing are the advantages it brings to developing countries. By generating revenues from this industry, a country can become more prosperous.