KPO

(KNOWLEDGE PROCESS OUTSOURCING)

The next big opportunity

Meaning of kpo

A form of outsourcing where knowledge and informatio n related work is carried out by a different company or subsidiary within the same organization to save costs or resources. In contrast to manufacturing outsourcing, this usually involves high-value work carried out by highly skilled staff, for example research, development, analysis and consultancy. KPO firms may also make business decisions on behalf of the source company, though these will typically be low-level and easily undone by the source company.

Paradigm shifts taking place in various facets of MBA education.

Earlier
Production and Operations Management

Now
ERP, CRM, SCM and IT enabled manufacturing.

Marketing Management

E-business, E-com, planning web enabled marketing, global international business, B2B and B2C market places and Cyber exchanges etc;
E-HRM, outsourced web based HR management, Distributed HRM etc; Globalized economy, E-enabled financial data bases, IT in markets management etc; ICE or IT Technology components, Networking, Sun and Microsoft and other Technologies, IT management, Knowledge management, Business Intelligence etc.

Human Resources Management Finance Management

Systems Management

THE VALUE CHAIN

CEO

Sr. Executives/MANAGERS

KPO

BPO

CALL CENTRE EXECUTIVE

Difference between KPOs and BPOs:

We can say that KPOs emerged from BPOs.

BPO
It provides services like customer care, technical support through voice processes, tele-marketing, sales, etc. Low end services Process expertise Pre-defined processes It employees not- so- qualified workers as it focuses on communication skills

KPO
KPO provides in-depth knowledge, expertise and analysis on complex areas like Legal Services, Business & Market Research, etc. High end services Knowledge expertise Requires application, understanding of business and analytical bent of mind It involves skill and expertise of knowledge workers with excellent educational background.

The kind of job it entails

content development market research equity research data research database creation analytical services financial modeling design and development in industries remote education publishing and legal support

How it can make India a global player

Large talent pools and favorable government policies together make India the most conducive environment for KPO

Several global players such as McKinsey, Reuters, Harris Interactive and Ipsos among others are already investing in India.
As with the BPO sector, India is cost-effective and provides a vast intellectual talent with expertise in areas such as research and analysis.

These companies outsource their processes to India for: Cost savings Operational efficiencies Access to highly skilled workforce Improved quality

Why KPO ? KPO is a quick-money sector provides long-term career option good performers have tremendous opportunity for growth in salary package, favorable business environment Governments Policy decision encourage this sector Strong requirement of Well-educated, knowledgeable, analytical candidates HISTORY of KPO Sector in INDIA KPOs have evolved from BPOs. KPOs were introduced in India by McKinsey when it first set up a knowledge center in India in 1987. But KPOs actually started coming up in India in 2000 when many companies like OfficeTiger, GE, Gartner, etc opened their research centers here. From 2000 to 2005, KPOs were in their growing stage. And during this duration, India became a

Skills KPOs are looking for:

Analytical skills for analyzing data. Usage of resources for information research Making presentable reports from raw data Theoretical and conceptualization knowledge Computer proficiency (software and hardware devices) English Speaking/writing skills To collate, synthesis, analyze interpret Data and Information To Search for advance information To Generate various scenarios, judgments and decision Making High level of Conceptualization Team Work

The following are the areas associated with the KPO sector.
Business and Technical Analysis Business & Market, Equity Research Data Analytics Financial Consultancy and Services Intellectual Property (IP) Research Learning Solutions Legal Services Database Creation Network Management Financial Modelling Research & Development Training & Consultancy Writing & Content Development

SWOT ANALYSIS
Strengths Large talented pool Quality IT training Low labour costs Success of BPOs Good knowledge of project management skills Supportive government policies Many new areas of specialization are being covered making KPO sector spreading its wings Consideration to quality standards like ISO 900x and Six Sigma Billing rates are lower as compared to billing rates in other countries
Opportunities Increasing domain expertise More areas of specialization can be added to KPOs Ample opportunities for SMEs

Weaknesses Immoral and unethical practices related to handling of crucial data Rising wages The inability to uniformly develop and provide infrastructural requirements as real estate prices are rising in major cities. Inadequate Intellectual Property Rights (IPR) protection regime in India Billing rates are higher as compared to billing rates in BPOs

Threats Non retention of talent Expected labour supply gap as jobs grow faster than the workforce.

KPO OPPURTUNITIES IN THE FOLLOWING SECTORS

RETAIL E-MARKETING BUSINESS & TECHNICAL ANALYSIS LEARNING SOLUTION DATA ANALYTICS INTELLECTUAL PROPERTY RIGHTS INVESTMENT RESEARCH LEGAL & INSURANCE CLAIMS PATENT FILINGS

HIGHEST PAYING KPO FIRMS

Gold mans sachs bangalore Deutsche bank bombay UBS hyderabad SBI capital JP morgan chase bombay Kotak bank bombay ICICI bombay Evalueserve delhi Genpact WNS Copal partners Lehman brothers bombay Lozenge Consultancy Services Patni Computer Systems Hutchison Essar Hector & Streak

Unlike conventional BPO where the focus is on process expertise, in KPO, the focus is on knowledge expertise. KPO involves business processes requiring domain expertise and high-end qualifications such as the MBA and/or the engineering, medical, law, accountant degree or other highly skilled professional qualifications. KPO requires moving away from the simple execution of standardised processes to the implementation of processes that demand advanced analytical and technical skills together with some decision-making.

India, China, Russia, Canada, Israel and the Philippines are some of the major KPO service providers today.
A BPO executive in a developing nation earns about $6,000 a year whereas his KPO counterpart can earn over $8,800 annually a huge 46 per cent difference.

REQUIREMENT FROM AN M.B.A STUDENT

Domain Knowledge, I.T, E.R.P, Business Applications, E-commerce Qualifications : MBAs (HR, IT, Finance, Marketing, IB, etc ) Doctors ( MBBS) Engineers (B. E., B. Tech, M. Tech) Lawyers (LLB) Teachers (B. Ed) Chartered Accountants Economists Architects

So basically, the key competencies required are :

Domain knowledge Basic interest in the field of work Aptitude for working with data and information Good communication skills Team work

Future Scenario

In 2003, the market share of Indian KPO sector in global KPO market was 56%. And it is expected to reach 71% in 2010, which shows a decent growth of the sector in the coming years. According to NASSCOM, KPO sector worldwide is expected to reach USD 17 billion by 2010. Out of this, India will account for USD 12 billion.

Market potential for outsourced non-IT services (2008)

Service Potential (In billion Dollars)
44 33 18 15 15 8 5 1 1 1

HR Service Customer interaction services Data Search, integration and Management Finance and accounting Remote education Other including pharmaceutical and research and development Engineering and design Medical Content and services Legal Content and services Translation, transportation etc.

CLASSIFICATION OF KPO SECTOR

Financial Services : These include financial determining, insurance, risk assessment, equity research, underwriting, fund management, actuarial analytics, debt collection and recovery, corporate & market research, etc. Some of the KPOs working in this area are Smart Analyst, Office Tiger, The Smart Cube. Market Research and Analytics : These include services like writing & editing, secondary & primary research, formatting client reports, conversion of findings to knowledge, etc. Some of the KPOs working in this area are marketRx, Pipal Research, Evalueserve, Inductis, OfficeTiger, Copal Partners, CRISIL, etc.

India is emerging as a leader in KPO market

Well established IT services and BPO sector Excellent project management skills Highly qualified professionals Proficiency in English Supporting government policies

Challenges which KPO industry is facing are as following:

Expected dearth of domain expert professionals High attrition rates Talent retention Data Security and confidentiality

Growth drivers of KPO sector:

Shortage of knowledge professionals in countries like USA, UK, etc. Low wages labour BPOs moving up the value chain Single vendor services Talented workforce

c a r r y o u t t h e w o r k . T h e r e f o r e m a n y c o m p a n i e s o f f e r t h e i r e m p l o y

Why KPOs
In the next 5 years India will employee more than 2.5 lac people 70% of the global KPO business. India has the world's second highest number of engineers, scientists, managers. Also, it has the largest talent pool in IT industry with approximately 50% of them proficient in English.
If you are a fresh graduate and you want a high paying job MBA's, CA's, law graduates etc.with a starting package of 4.2 to 4.8 lacs per annum. Exevo, Evalueserve or Pipal Research, the package can go upto 6 lacs per anum.

Salaries in Indian KPO are 25%-50% higher than in other KPOs around the world.
Salaries are bound to increase later on also as the work outsourced to Indian KPOs is of high quality and of complex nature. It takes a lot of expertise and skills to carry out the work. Therefore many companies offer their employees 6 monthly salary hikes anywhere between 15%-20%. And in the future also, the salaries are going to rise in the Indian KPO sector. This trend will last at least upto next 10-15 years. The reason being India's demography and the young talent pool available here.

Top Players in KPO Sector

S. No.
1. 2. 3. 4.

Companies
Evalueserve (EVS) McKinsey & Company RocSearch Pangea3

5.
6 7.

OfficeTiger
Copal Partners Gevity

8.
9. 10. 11. 12. 13. 14. 15. 16. 17.

Pipal Research
Grail Research Inductis, EXL Service WNS GLOBAL SERVICES ACCENTURE APTARA (TECHBOOKS) 24/7 Customer ICICI OneSource Ugam Solutions Convergys

NEWS FROM THE KPO INDUSTRY

YES Bank setting up a KPO

YES Bank, a famous name in private sector banks, is all set to open up a knowledge processing outsourcing (KPO) unit. It is a stand alone project and it will be named as Project TOPS (technology, operations, payments and services). As estimated by Rana Kapoor, MD and CEO, YES Bank, the unit will start operating in FY 2008-09. Initially it will provide services in banking sector. The pilot project presently is being run at YES Bank's offices at DLF Cyber City in Gurgaon and in Mahalakshmi in Mumbai. Around 500 people are working on the pilot project as of now. Till now applications like audit and compliance are being outsourced to the unit. But later on it will move on to other financial services as well.

India to be preferred location for global KPO industry: KPMG

The financial services sector will account for a major proportion of the KPO industry and its worth will be in excess of $5 billion by 2010.

India top outsourcing hubs, says survey

India remains the most favoured outsourcing destination, according to CyberMedia's Global Services survey on emerging outsourcing destinations in 2007. Even as fears that the rupee appreciation and rising wage costs would blunt its edge, India still boasts of the largest number of cities (6), which figure among the top-50 emerging cities, followed by China (5), Brazil (3), the Philippines (3) and the US (3), among others.

The last word: It would not be very wrong to state that KPO do offer an alternate and fruitful career path for our young minds.
Going by the current statistics, the KPO wave is here to stay and Indians can now benefit much more than before. Knowledge Process Outsourcing May Be The Next Boom Business