KPO (Knowledge Process Outsourcing)

KPO is the outsourcing of core, knowledge-based work of the organization and information related business activities to the third-party service provider in consideration of some amount.

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Generally, the knowledge-based work is technical which may need specialized skills and the team or person needs to be analytical in their approach.

India is considered the key hub for KPOs together with Ukraine, China, Israel, Russia, and Ireland. In fact, it is proclaimed that 70% of the KPO work is outsourced to Indian companies only. A very clear reason behind this is the availability of talented doctors, engineers, website and graphic designers, etc. at a very reasonable cost.

KPO in Detail

Before you start digging deep into the KPO services and its processes, here is the perfect breakdown of Knowledge process outsourcing.

KPO is the distribution of relatively higher level of tasks, to a different group or an organization in a different location. These may include jobs for analytical people within industries like financial consultancy and services, research and development, business and technical analysis and many others.

Since both Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) are grounding their feet in the industry, it is important to know in detail about both of them. Here is the difference between BPO and KPO.

BPO is basically the outsourcing of work to some third party service provider in order to save money while KPO is a subset of BPO only. KPO include more knowledge-based and specialized work. In addition to this, there are many reasons that a company may choose KPO services over BPO.

Why Choose Knowledge Process Outsourcing

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When companies are seeking to have specialized knowledge and proficiency, when they have a chance to lessen the costs by hiring skilled workers, when they have lack of skilled professionals, etc. they choose to work with KPOs. Or companies choose KPOs when they feel that they need to improve their value chain.

Companies nowadays look forward to taking raw material and add value to that material through different processes and eventually sell it as a final product. Companies also look forward to the ways so that they can perk up the efficiency in their production process and deliver the maximum value for the product. IT Outsourcing information related to business processes is one of the best ways to do that.

Companies also choose to use KPO services whey they see it is beneficial to them in an account of time, finance and manpower. Rather than creating a division for doing some specific work they choose to outsource the same as it is somewhere more beneficial to them.

Whenever you see that cost of any skilled work is more, the organizations, in this case, choose to outsource the same. And because they get the same work done even more effectively, with better quality and more skill sets, they choose KPOs.

To elaborate:

A company wants to have service and excise tax division in order to handle its excise and service tax returns, dealings, official legal works and related legal compliances about the same.

Advantages and Disadvantages of Knowledge Process Outsourcing

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KPO is actually great for the businesses looking forward to decreasing the costs of their products and operations. It is under the situation when there is the shortage of skilled employee in a specific field or you are looking forward to freeing up human capital in order to do some other work.

KPO is difficult for some reasons. Security can be classified; compromised or proprietary information can be lost in the end. It may be a bit difficult to preserve talent in outsources positions. Companies can actually not guarantee the character of their employees or even the quality of their work. It can be resource-intensive to set up a successful KPO operation. Communication at the same time can be a challenge because of legal, cultural and language barriers.

Businesses now are experiencing an enhanced growth in the volume of data, With short decision cycles, stiff competition, and less time to market, companies are now looking forward to making data-driven decisions, Both structured as well as non-structured data from organization-wide systems and from external sources like businesses and market. Organizations are now shaking hands with the specialized analytics and research vendors who can actually help them to build successful business strategies while offering then data-driven insights which will help in analyzing the current business environment when predicting trends.

Major Knowledge Process Outsourcing Services

  • Customer Analytics
  • Supply chain analytics
  • Marketing analytics
  • Patient care analytics
  • Operations analytics
  • Market/business research
  • Brand analysis
  • Market segmentation studies
  • Competitive intelligence
  • Industry analysis
  • Market sizing and survey programming
  • Outsourcing to KPO

The hiring company needs to pay a monthly or annual payment and rest of the work are taken care of by KPO. This may include maintaining and managing legal documents, work of filing, and more. The work is conducted offshore too at the place of KPO. The company is required to send proper data for the KPO to their work efficiently.

Company Cost

  • Companies need to hire at least 3 to 4 qualified technical staff out of which one needs to be the division manager.
  • Offer efficient space to the team for performing their tasks
  • An increase in the workload of Human Resource (HR)
  • Enhancement in reporting of the division


BPO is when you contract for specific tasks like customer service and HR to some third party service provider. This allows the companies to focus on their core competencies. And Knowledge process outsourcing (KPO) can be defined as outsourcing of high end business functions in a company. This allow both core and non core activities.

What is KPO Job Profile?

KPO accounts to the outsourcing of core information related business activities. These may be very important. KPOs also assist in designing an integral part of the value chain of a company. KPO need technical and advanced analytical skills too for a higher degree of specialist expertise.

Since BPO pays attention only on communication skills, KPOs focus on technical qualifications and skills too.

KPO Jobs

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KPOs are really good for MBAs, CFAs, and CAs. And then for finance people, it is also a good place to work in.

No matter you work for a financial KPO or you get it outsourced from some company, in both the scenarios it will be in demand.

The key reason behind is three of these degrees are linked to technical skills and finance which are collected from these studies assisting you further in financial KPO.

Let us talk about each professional degree of financial KPOs in detail:

From CA’s perspective

When it comes to a CA’s degree, it is valuable to from both the sides, i.e., getting a job in KPO and getting outsourced in KPO.

If you have specialization and are in practice in the particular field, then you can think of getting some work outsourced from knowledge process outsourcing. And even if you are fresher KPOs pay you a handsome amount.

The best thing is you always have the choice of switching once you have worked or practiced with KPO. By this time you would have earned enough experience for yourself. So, it can always be counted as a good place for your development.

From MBA’s perspective

MBA degree offers you a complete insight into all the aspects of business administration. Be it with finance, product development or in human resource, you enjoy a perfect space in KPOs. Since you possess knowledge form all the fields you can be easily included in KPOs.

Most of the crowd hired in KPOs has MBA background.

You can also expect to work in financial KPO in case you have an MBA degree. And with this, you will certainly earn more specialization in finance.

From CFA’s Perspective

CFA is Chartered Financial Analyst having specialization in derivatives analysation and financial securities. They are also expert in arranging the data while creating MIS reports. Such type of skills is mostly acceptable in financial KPOs.

If you simply compare all the three degrees, you will see that these people are mostly engaged in all the workings of financial KPO if it is on their payroll or as a partner to them.

How is working in KPO beneficial?

If there are risks associated with it, there are benefits as well. When a company outsources its tasks to any KPO, they compare the risk and benefits of that specific function. And if a company finds more benefits than risks, it is outsourced. Here are a few major benefits of outsourcing the work to KPO listed below:

Professional Assistance

Most of the work performed by KPOs is technical. There are a lot of professionals associated with a single work. The organizations get the work done by a person having specialization in that particular stream. Thereby it increases the effectiveness and the quality of work.

Cost Friendly

Most of the work associated with KPO is done at a lower price if compared to the cost of the organization. This would have incurred if the same work had been carried in the organization only.

Organizations also get a huge advantage of the time zone. KPO sometimes work in different time zones so that the company can make use of whole 24 hours.

KPO – Demand for Every Business Today

Since KPO is the value process service where skills, information, expertise, and experience of a person are used to the fullest, it is the best place to attain the goals of a business. When companies hire third parties for such services, a new business activity is generated which is called Knowledge Process Outsourcing (KPO). Today most of the companies are switching from BPO To KPO companies in order to set a benchmark. This move is actually assisting them in leveling up their business process outsourcing as well.
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What is KPO (Knowledge Krocess Outsourcing)? BPO and KPO difference.
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What is KPO (Knowledge Krocess Outsourcing)? BPO and KPO difference.
KPO is the outsourcing of core, knowledge-based work of the organization and information related business activities to the third-party service provider in consideration of some amount. Generally, the knowledge-based work is technical which may need specialized skills and the team or person needs to be analytical in their approach. Read more...
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SITO: Software & IT Outsourcing
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