Knowledge Process Outsourcing (KPO) - What is it and How Does It Work?

Knowledge process outsourcing (KPO) is the practice of contracting out the performance of key, information-related business functions. Work is contracted out to people who usually have professional degrees and extensive experience in a particular field, which is known as KPO.

Workers from a separate business or a division of same organization may do the information-related tasks for the corporation as a whole. The subsidiary may be located in the same nation as the parent company or in an offsite account in order to save money or other resources.

Key Points Briefly

  • Knowing how to outsource knowledge-based work to competent subject matter specialists is known as knowledge process outsourcing (KPO).

  • Companies tun to to KPO services to save costs and also when their own organisations lack the specific expertise to handle the task.

  • Business and firms look at KPO as a cost cutting solution that could potentially save time and provide them with the best possible solution for their investment.

Knowledge Process Outsourcing: What You Need to Know

This is the process of outsourcing specific tasks and knowledge based process to an offshore company to fulfill their own tasks. These tasks are generally given to an outside party that could have a reputation in the particular field of sales, AI etc. KPO is extremely popular trend in the business industry.

People often get confused between Business process outsourcing (BPO) and KPO services. The former is more directly related to outsourcing of manual work while KPO is a more technical activity that requires a knowledge expert of that domain like AI (artificial intelligence).

For example, let us consider a company located in Alabama, United States of America and to save costs it has decided to offshore its data analytical activity to a company in Bangalore that has garnered good reputation.

This is KPO services and how it works around the world. It may be the case that this could be assigned locally within the same state.

KPO Services Come in a Variety of Forms

The following are some typical examples of KPO outsourcing domains −

  • Investing in research and development (R&D)

  • Operations in the business world (management consulting)

  • Analysis of the technical aspects

  • Investments

  • Legal

  • Medical & Health-Care Services

  • Analyzing and interpreting information

KPO Has Both Advantages and Disadvantages

KPO services have many advantages and therefore are being deployed worldwide. The biggest advantage is affordable service and exceptional technical knowledge for an organisation and thereby saving time.

There are drawbacks to this useful service as well as it involves manpower, additional cost and there will be constant management that the top executives will have to control. Moreover, there could be delays in the project that could potentially cost the company lot more financial loss.

One has to be mindful of these advantages and disadvantages before signing the agreement of KPO and hiring the services.

Updated on: 05-Aug-2021


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