Knowledge+Process+Outsourcing

7/28/2019 Knowledge+Process+Outsourcing

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KPO (KNOWLEDGE PROCESS OUTSOURCING )

The next big

opportunity


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Meaning of kpo

A form of outsourcing where knowledge and information related work is carried out by adifferent company or subsidiary within thesame organization to save costs or resources . In

contrast to manufacturing outsourcing, this usuallyinvolves high-value work carried out by highlyskilled staff , forexample research , development , analysis andconsultancy. KPO firms may alsomake business decisions on behalf of the source

company, though these will typically be low-level andeasily undone by the source company.
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Paradigm shifts taking place in various facets of MBA education .

Earlier NowProduction and OperationsManagement

ERP, CRM, SCM and IT enabledmanufacturing.

Marketing Management E-business, E-com, planningweb enabled marketing, globalinternational business, B2Band B2C market places andCyber exchanges etc;

Human ResourcesManagement

E-HRM, outsourced web basedHR management, DistributedHRM etc;

Finance Management Globalized economy, E-enabledfinancial data bases, IT in

markets management etc;Systems Management ICE or IT Technology

components, Networking, Sunand Microsoft and otherTechnologies, IT management,Knowledge management,Business Intelligence etc.


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THE VALUE CHAIN

CEO

Sr. Executives/MANAGERS

KPO

BPO

CALL CENTRE EXECUTIVE


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BPO KPO It provides services like customer care, technical support throughvoice processes, tele-marketing,sales, etc.

Low end servicesProcess expertisePre-defined processes

It employees not- so- qualifiedworkers as it focuses oncommunication skills

KPO provides in-depthknowledge, expertise andanalysis on complex areas likeLegal Services, Business &Market Research, etc.

High end servicesKnowledge expertiseRequires application,

understanding of business andanalytical bent of mindIt involves skill and expertise of knowledge workers withexcellent educational

background.

Difference between KPOs and BPOs: We can say that KPOs emerged from BPOs .


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The kind of job it entails

content developmentmarket researchequity researchdata researchdatabase creationanalytical servicesfinancial modelingdesign and development in industriesremote educationpublishing and legal support


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How it can make India a global player

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

Several global players such as McKinsey, Reuters, Harris Interactiveand 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 andanalysis.

These companies outsource their processes to India for:

Cost savingsOperational efficienciesAccess to highly skilled workforceImproved quality


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Why KPO ?KPO is a quick-money sector provides long-term career optiongood performers have tremendous opportunity for growth insalary package,favorable business environmentGovernments Policy decision encourage this sector Strong requirement of Well-educated, knowledgeable,

analytical candidates

HISTORY of KPO Sector in INDIAKPOs have evolved from BPOs.KPOs were introduced in India by McKinsey when it first setup a knowledge center in India in 1987.But KPOs actually started coming up in India in 2000 whenmany companies like OfficeTiger, GE, Gartner, etc openedtheir research centers here. From 2000 to 2005, KPOs were intheir growing stage. And during this duration, India became a


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Skills KPOs are looking for:

Analytical skills for analyzing data.

Usage of resources for information researchMaking presentable reports from raw dataTheoretical and conceptualization knowledgeComputer proficiency (software and hardware devices)English Speaking/writing skills

To collate, synthesis, analyze interpret Data and InformationTo Search for advance informationTo Generate various scenarios, judgments and decision MakingHigh level of ConceptualizationTeam Work


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The following are the areas associated with the KPO sector .

Business and Technical Analysis

Business & Market, Equity ResearchData AnalyticsFinancial Consultancy and ServicesIntellectual Property (IP) ResearchLearning SolutionsLegal ServicesDatabase CreationNetwork ManagementFinancial Modelling

Research & DevelopmentTraining & ConsultancyWriting & Content Development


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StrengthsLarge talented poolQuality IT trainingLow labour costsSuccess of BPOsGood knowledge of project

management skillsSupportive government policiesMany new areas of specialization are

being covered making KPO sector spreading its wingsConsideration to quality standards

like ISO 900x and Six SigmaBilling rates are lower as compared to

billing rates in other countries

Weaknesses Immoral and unethical practicesrelated to handling of crucial data Rising wages The inability to uniformly develop andprovide infrastructural requirements asreal estate prices are rising in major cities. Inadequate Intellectual Property

Rights (IPR) protection regime in India Billing rates are higher as comparedto billing rates in BPOs

OpportunitiesIncreasing domain expertiseMore areas of specialization can be

added to KPOs Ample opportunities for SMEs

ThreatsNon retention of talentExpected labour supply gap as jobs

grow faster than the workforce.

SWOT ANALYSIS


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HIGHEST PAYING KPO FIRMSGold mans sachs bangaloreDeutsche bank bombay

UBS hyderabadSBI capitalJP morgan chase bombayKotak bank bombayICICI bombayEvalueserve delhiGenpactWNSCopal partnersLehman brothers bombayLozenge Consultancy ServicesPatni Computer SystemsHutchison Essar

Hector & Streak


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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 standardisedprocesses 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 whereashis KPO counterpart can earn over $8,800 annually a huge 46 per centdifference .


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REQUIREMENT FROM AN M.B.A STUDENTDomain 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 AccountantsEconomistsArchitects

So basically, the key competencies required are :

Domain knowledgeBasic interest in the field of workAptitude for working with data and informationGood communication skillsTeam work


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In 2003, the market share of Indian KPO sector in global KPO marketwas 56%. And it is expected to reach 71% in 2010, which shows adecent 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.

Future Scenario


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Market potential for outsourced non-ITservices (2008)

Service Potential (In billion Dollars)

HR Service 44Customer interaction services 33Data Search, integration andManagement 18Finance and accounting 15Remote education 15Other including pharmaceutical andresearch and development 8Engineering and design 5Medical Content and services 1Legal Content and services 1Translation, transportation etc. 1


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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 toknowledge, etc. Some of the KPOs working in this area are marketRx, Pipal Research,Evalueserve, Inductis, OfficeTiger, Copal Partners, CRISIL, etc.

CLASSIFICATION OF KPO SECTOR


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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 servicesTalented workforce

c


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carry out the

work . Theref ore

many companies

of f er their em

ploy

In the next 5 years India will employee more than 2.5 lac people70% 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.

If you are a fresh graduate and you want a high paying jobMBA'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 IndianKPOs 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 hikesanywhere 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.

Why KPOs


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Top PlayersinKPOSector

S. No. Companies 1. Evalueserve (EVS)

2. McKinsey & Company

3. RocSearch4. Pangea3

5. OfficeTiger

6 Copal Partners

7. Gevity

8. Pipal Research

9. Grail Research

10. Inductis, EXL Service

11. WNS GLOBAL SERVICES

12. ACCENTURE13. APTARA (TECHBOOKS)

14. 24/7 Customer

15. ICICI OneSource

16. Ugam Solutions

17. Convergys


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NEWS FROM THE KPO INDUSTRY

YES Bank setting up a KPOYES Bank, a famous name in private sector banks, is all set to open up aknowledge processing outsourcing (KPO) unit. It is a stand alone project andit will be named as Project TOPS (technology, operations, payments andservices). As estimated by Rana Kapoor, MD and CEO, YES Bank, the unitwill start operating in FY 2008-09. Initially it will provide services inbanking sector. The pilot project presently is being run at YES Bank's

offices at DLF Cyber City in Gurgaon and in Mahalakshmi in Mumbai. Around500 people are working on the pilot project as of now. Till now applicationslike audit and compliance are being outsourced to the unit. But later on itwill move on to other financial services as well.

India to be preferred location for globalKPO industry: KPMG The financial services sector will account for amajor proportion of the KPO industry and itsworth will be in excess of $5 billion by 2010.


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India top outsourcing hubs, says survey

India remains the most favoured outsourcing destination,according to CyberMedia's Global Services survey onemerging outsourcing destinations in 2007.

Even as fears that the rupee appreciation and rising wagecosts 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) andthe US (3),among others.


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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 benefitmuch more than before.

Knowledge Process Outsourcing May BeThe Next Boom Business

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Knowledge+Process+Outsourcing