36878187 knowledge process outsourcing kpo overview
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What is KPO?
y Knowledge Processing Outsourcing (popularly known as a
KPO), calls for the application of specialized domain pertinent
knowledge of a high level. The KPO typically involves a
component of Business Processing Outsourcing (BPO),
Research Process Outsourcing (RPO) and Analysis Proves
Outsourcing (APO). KPO business entities provide typical
domain-based processes, advanced analytical skills and
business expertise, rather than just process expertise. KPOIndustry is handling more amount of high skilled work other
than the BPO Industry. While KPO derives its strength from the
depth of knowledge, experience and judgment factor; BPO in
contrast is more about size, volume and efficiency.
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y In fact, it is the evolution and maturity of the Indian BPO sector that has
given rise to yet another wave in the global outsourcing scenario: KPO
or Knowledge Process Outsourcing. The success achieved by many
overseas companies in outsourcing business process operations to
India has encouraged many of the said companies to start outsourcing
their high-end knowledge work as well. Cost savings, operationalefficiencies, availability of and access to a highly skilled and talented
workforce and improved quality are all underlying expectations in
outsourcing high-end processes to India
KPO Industry is handling more amount of high skilled work
other than the BPO Industry. While KPO derives its strength
from the depth of knowledge, experience and judgment factor;
BPO in contrast is more about size, volume and efficiency.
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Stabilization
2005-2010
Consolidation
(2002-2004)
Evolution ofKnowledge Services in
India
1997 - GE Capital
Services establishes its
back office operations
Growth
(1999-2001)
Inception
(1996-1998)
1993 IGate Global
Solutions (formerly
Mascot systems)establishes its
offshore center in
Banglore
2000 Third Party market
competition increases
with Mphasis, FreshMind
and Office Tiger opening
their operations
2001 Evalueserve, Irevna
and Netscribes enter as
Third Party providers
Start of knowledge
services
Captive players enter
the Indian market
Large captive players
enter the market
Third Party players
start cropping up
Competition among Third
Party players heat-up
Market consolidation
Collaborations betweenThird Party player
2004 ICRA and Bytes to
Knowledge (B2K)
collaborate to form
Brickwork to offer financial
services
Captive Players to increase
foothold in the Knowledge
Services market.
Market Share of Captive Players
expected to increase to 68% in
the year 2010 from the current
62%
Industry will comprise few large
third party players along with
the captives.
Very few boutique firms likely to
exist on a standalone basis
Independent research for
investment banks and large
businesses to show traction
going ahead
Characteristics:
Examples:
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NEED FOR KPO
1. Accelerate Reengineering Benefits
2. Access to Top Class Capabilities
3. Cash Infusion
4. Free Resources for Other Purposes5. Function Difficult to Manage or
Out of Control
6. Improve Company Focus
7. Make Capital Funds Available8. Reduce Operating Costs
9. Reduce Risk
10. Resources not Available Internally
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Difference between KPO and BPOKPO BPO
Outsourcing of knowledge intensivebusiness process and activities Outsourcing of standard businessprocess
Value, time to market, scale,flexibility are the primary drivers,then cost
Cost is the primary driver
Knowledge creation process is notwell defined
Processes are mostly standardized
Industry is evolving and clients arestill learning
Industry is mature and outsourcingcomponents easily carved out
Clients perceive risk of datasecurity and IP leakage Most of the risk have beenaddressed by infrastructure,processes .
Domain expertise (depth) moreimportant than size
Bigger the better: economies ofscale is a competitive advantage
Finding skilled talent is the biggestchallenge Managing attrition is the biggestchallenge
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The spectrum ofKnowledge Services
Business Research
Economics Research
Company and Industry
Research
Documentation & Library
Services
Investment Research
Corporate Finance
Financial Modeling and Analysis
Investment Banking Support
Market Research
Data Acquisition and Data
Entry
Data Processing
Presentations
InformationManagement
Database Creation
Quantitative/Financial Statement
Analysis
Data/Information Synthesis
Legal Research
Legal, Para-Legal Content and Services
Drafting, Review of Documents and
Contracts Legal Research (Case History)
Sourcing Management
Spend Data Analysis & Supplier intelligence
Low cost country sourcing
Advisory Services
Intellectual Property Research
Patent Drafting and Filing, Patentability Assessment
Overlap Analysis, Competitor IP Landscaping
IP Portfolio Management, IP Licensing &
Commercialization
Analytic Services
Data Warehousing
Data Preparation, ETL services
MIS & Reporting
Business Intelligence
Statistical and econometric Modeling
Optimization modeling and ORsolutions
Technology Research
IT Services
Application development and maintenance Security Internet & E- commerce
Knowledge
Services
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Functions OfKPO
Analyzing data and procure information to produce
meaningful documents.
Researching information database from various sources.
Converting raw un-transcribed technical data into presentable
documents.
Use of high levels of conceptualization and theoretical knowledge.
Proficiency with various advanced software and hardware devices.
Maintaining workflow, meeting deadlines, and applying quality controls.
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Indias Competitive advantage vis--vis other nation
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The service sector accounted for 51% of Indias GDP in 2003
Estimates that the share of service sector is expected to rise to 57% in 2010.
51
57
48
50
52
54
56
58
Market S are
(%)
2003 2010
Year
S are ofservice Sector in india's GDP
Indias Market Trends
Source : Evalueserve
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Key emerging issues for KPO
Contracts
How to define SLAs for KPO process Duration of contracts?
Pricing
How to sustain the value proposition to
the client?
Maintaining healthy P&L
Governance Structures
Onshore offshore mix
Unbundling of roles: Sales/Program
Management/Operations
Service Delivery
How should operations be organized
for better financials and delivery
conforming to client expectations?
Selling & Transition
Best practices for transition?
Strategies for growth ofKPO accounts?
Quality & Risk Management
Business Continuity
Information security & compliance
Inventorize information assets
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Strengths L
arge talented pool Quality IT training Low labour costs Success of BPOs Good knowledge of project managementskills Supportive government policies
Many new areas of specialization arebeing covered making KPO sectorspreading its wings Consideration to quality standards likeISO 900x and Six Sigma Billing rates are lower as compared tobilling rates in other countries
Weaknesses
Immoral and unethical practices relatedto handling of crucial data Rising wagesThe inability to uniformly develop andprovide infrastructural requirements asreal estate prices are rising in majorcities.
Inadequate Intellectual Property Rights(IPR) protection regime in India Billing rates are higher as compared tobilling rates in BPOs
Opportunities Increasing domain expertise More areas of specialization can be
added to KPOs Ample opportunities for SMEs
Threats Non retention of talent Expected labour supply gap as jobs growfaster than the workforce.
KPO Sector SWOT Analysis
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Future Of KPO
y 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 approximately50% of them proficient in English.
y If you are a fresh graduate and you want a high
paying job
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y 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 goup to 6 lacs per annum.
y Salaries in Indian KPO are 25%-50% higher than in other
KPOs around the world.
y And in the future also, the salaries are going to rise in the Indian KPO
sector.
This trend will last at least up to next 10-15 years.
The reason being India's demography and the young talent pool available
here
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