Knowledge Process Outsourcing

Knowledge Process Outsourcing (KPO) is defined by Wikipedia as “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…” Since KPO is an offshore movement of knowledge-intensive business processes, a specialized domain based expertise is required.

Jobs such as data search, research and analytics and editorial services like copy editing, and content creation are suitable for KPO. To obtain the cost and efficiency benefits, an increasing number of engineering and/or architectural firms, insurance companies, publishing companies, media companies, pharmaceutical companies, law firms and legal services providers have opted to outsource their selected business activities.

The fast growth of KPO industry

The unprecedented growth and success of the BPO industry has paved the way for the rise of the KPO industry. With technology’s ability to transfer vast amounts of data across the globe at relatively low cost, the business sector has learned to use this tool to manage their high-end companies at a low cost, yet still efficient and effective.

Universities in the Philippines, China and India produce hundreds of thousands of graduates in the area of medicine, engineering, architecture, business management, law; and KPO providers are giving these highly skilled workers the opportunity to apply their profession to offshore companies. In turn, these high-end offshore companies are able to hire highly skilled workers according to their terms and requirements.

What are the benefits of the KPO?

The entrance of global recession which started in the United States has all the more provided a spring board for the KPO industry. This time, the giant multinational companies have suffered the big blow of the industrial recession which lead to mass lay-off of employees, highly skilled or not. This condition helped many high-end companies realize the benefits of the KPO; and these are:

• The bulk of work loads are directly absorbed by the KPO providers and they assist clients/companies to attain general efficiency and effectiveness.
• KPO partner lessens the burdens of project management, since the client is freed from the responsibility of hiring employees for the new project to be done.
• Highly skilled employees and unattainable projects are accessed by companies on a scale that might be too costly if they do it without the KPO provider.
• KPO firms help companies focus on core competencies which serves as starting point to achieve greater value to clients and greatly improve their business processes.
• Transitions in staffing levels can easily be done during peaks in activity and then to other projects.

What to look for a KPO partner?

• It is suggested that the KPO provider primarily must be high skilled in: “research information; converting raw data into clear and compelling information products and using high levels of conceptualization and theoretical knowledge to create original material.”
• The client and KPO partner must have a common commitment for levels and quality of services.
• The KPO firm must (with great sensitivity and patience), be able to deal with their staff’s reluctance to sharing knowledge so that knowledge exchange will not fall short.
• The KPO provider must have an effective hiring process, training program and indisputable achievement in providing excellent job.
• The partner must posses a powerful in-house team who are able to handle multiple, high-demanding and high-end jobs for the client.

Why choose a KPO partner from the Philippines

Statistics show that Philippines produces approximately 450,000 graduates annually and was able to generate almost 56,000 engineering and IT-related graduates, by which the government expects to grow by 20% by 2012. Likewise, the Professional Regulatory Board record indicate that the country has over 2 million licensed professionals in 2006 including over 70,000 engineers, 16,000 architects, 100,000 accountants, 95,000 physicians and more than 40,000 medical technologists.