knowledge process outsourcing (kpo) overview
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Knowledge Process Outsourcing (KPO) Overview
KPO is a form of outsourcing, in which knowledge-related and information-related work 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.
KPO’s have evolved from BPO’s.
KPO’s 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.
Some of the hot destinations for KPOs other than India are Russia, China, Czech Republic, Ireland and Israel.
What is a KPO?
NEED FOR KPO
1. Accelerate Reengineering Benefits2. Access to Top Class Capabilities3. Cash Infusion4. Free Resources for Other Purposes5. Function Difficult to Manage or
Out of Control 6. Improve Company Focus7. Make Capital Funds Available8. Reduce Operating Costs9. Reduce Risk10. Resources not Available Internally
Stabilization2005-2010
Consolidation(2002-2004)
Evolution of Knowledge 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 between
Third 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:
Difference between KPO and BPOKPO BPO
Outsourcing of knowledge intensive business process and activities
Outsourcing of standard business process
Value, time to market, scale, flexibility are the primary drivers, then cost
Cost is the primary driver
Knowledge creation process is not well defined
Processes are mostly standardized
Industry is evolving and clients are still learning
Industry is mature and outsourcing components easily carved out
Clients perceive risk of data security and IP leakage
Most of the risk have been addressed by infrastructure, processes .
Domain expertise (depth) more important than size
Bigger the better: economies of scale is a competitive advantage
Finding skilled talent is the biggest challenge
Managing attrition is the biggest challenge
The spectrum of Knowledge ServicesBusiness 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
Information Management 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 OR
solutions
Technology Research
IT Services Application development and maintenance Security Internet & E- commerce
Knowledge Services
Functions Of KPO• 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.
India’s Competitive advantage vis-à-vis other nation
The service sector accounted for 51% of India’s 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 Share (%)
2003 2010
Year
Share of service Sector in india's GDP
India’s Market Trends
Source : Evalueserve
Key emerging issues for KPO
Contracts How to define SLA’s 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 of KPO accounts?
Quality & Risk Management Business Continuity Information security & compliance Inventorize information assets
MARKETING STRATEGY DEVELOPMENT
PRODUCT STRATEGY
VALUE PROPOSITIONQuality Global Coverage
Custom/Cost Effective
Attention to detail in every element of Client interaction
Disciplined project management and communication
Accurate and insightful analysis Extensive research infrastructure
Operation centres in India, Romania, China and Chile
Multi-lingual capabilities (50+)
Research conducted in North America, South America, Asia Pacific and EMEA
Local ‘in-country’ support
24 x 5 coverage
Fraction of traditional cost
100% customised Client projects
Multi-industry experience
Highly scalable
PROMOTIONAL STRATEGY
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
WeaknessesImmoral 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
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 grow faster than the workforce.
KPO Sector SWOT Analysis
PORTER’S GENERIC STRATEGIES
PORTER’S GENERIC STRATEGIES
PORTER’S GENERIC STRATEGIES
Dealing with competition - market leader Expanding total market -1.New users - market penetration, new-market segment, geographical expansion 2.New uses 3.More usage
DEALING WITH COMPETITION
EVALUE SERVE
• Evalueserve is a pioneer in providing Knowledge Process Outsourcing (KPO) services, a term it coined in 2003 and gave the acronym, KPO. Evalueserve’s services include customised Financial and Investment Research, Business Research, Market Research, Intellectual Property, Legal Support Services, Supply Chain Support Services, and Knowledge Technology. Through the Evalueserve Circle of Experts, it also provides access to a global network of domain experts in all major industries such as Financial Services, Telecom/IT/High-tech, Healthcare, Consumer Goods and Retail, Energy and Utilities, Capital Equipment and Media.
FLATWORLD SOLUTIONS
• Flatworld Solutions presents itself as a one-stop shop, offering a broad spectrum of services focused on specialized business process outsourcing solutions in different industry verticals such ashealthcare, logistics, insurance, finance, engineering and mortgage
SERVICES OFFEREDEVALUE SERVE FLATWORLD SOLUTIONS
• Call Center Services• Data Entry Services• Engineering Services• Healthcare Services• Financial Services• Software Development• Photo Editing• Transcription Services• Design Services• Research & Analysis• Web Analytics• Virtual Assistant• Writing Services• Customs Brokerage
Workflow Process: Evalueserve has developed its own proprietary customisable workflow system.
Flatworld Solutions’ Five Stage Outsourcing Process
PROMOTIONAL STRATEGIES
EVALUE SERVE- PROMOTIONEvalueserve is sponsoring IQPC’s Global Patent Congress on 21-22 September 2010 in Copenhagen. Nitin Chaudhary, Manager IP & Legal Services at Evalueserve, will be speaking on ‘Identify opportunity areas for new innovations through examination of existing patent portfolios’:
PLACEMENT STRATEGY-FLATWORLD AND EVALUE SERVE
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