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What is a Knowledge Process Outsourcing? | Company Vakil

Knowledge process outsourcing (KPO) states the outsourcing of the core information-related business activities which are competitively necessary or form an essential part of a company’s value chain. KPO needs advanced analytical and technical skills as well as a high degree of specialist expertise.

Reasons behind KPO include an enhance in specialized knowledge and expertise, additional value creation, the potential for price reductions, and a lack of skilled labour. Regions which are particularly famous in Knowledge Process Outsourcing include the following countries: India, Sri Lanka, and Eastern Europe, especially Poland, Romania, and the Baltic States.
KPO is a continuance of Business process outsourcing, yet with rather more of business complexity. In order to be successful in Knowledge process outsourcing, a lot of guidance is required from inter-organizational system.


The developing competition has brought about a shorter time to market cycles, and clients are getting to be further demanding regarding quality. This has forced the firms to give operational proficiency and increase the rate of their products and services. The customer can launch an item faster and get to the market right away. A company can decrease the complexities included in overseeing and continuously constructing information in an extensive pool of human resources.


KPO services include in itself all kinds of research and information gathering, for e.g. intellectual property research for patent applications; equity research, business and market research, legal and medical services; training, consultancy, and research and development in fields like pharmaceuticals and biotechnology; and animation and design, etc.

Risks and benefits

Benefits of KPO

  • Cost reduction,
  • Shortage of skilled employees,
  • Provides many graduates at very low cost,
  • High-end services are provided at a lower cost to decrease, unemployment and benefit their economy and
  • Provides flexibility in the fields of HRM & time management.

Risks of KPO

  • Security- Classified information of the company can be lost,
  • Key talent preservation,
  • The character of the employee along with the quality of the work cannot be guaranteed,
  • KPO is time-consuming and cannot offer a quick fix to the company seeking urgent results,
  • Lack of communication among partners due to various reasons like legal, language and cultural barriers can lead to complications.

KPO in India

India contains a large number of post-graduates, PhDs and MBAs who are occupied in KPO. The Indian National Association of Software and Service Companies (NASSCOM) is estimated the total market size of the KPO division in India in 2006 to be $1.5 billion. The year previous to 2005, it was $1.3 billion, with Evalueserve predicting that by 2010 it might be some $10 to $15 billion. The Indian government was predicting that by the year 2010 India would have 15% of the worldwide KPO market. But due to the global financial crisis, together with domestic economic problems such as the IPO of Reliance Power in 2009, caused people to re-evaluate these predictions, incurring doubts that India’s IT, BPO, and KPO sectors — which by then, collective, were $8.4 billion in export revenues — would be greatly affected by these factors. The international KPO industry is expected to reach about US $17 billion by 2015, of which US $12 billion will be outsourced to India. Furthermore, the Indian KPO area is likewise expected that it will utilize more than 2, 50,000 KPO experts by 2015.

KPO services are classified into following types of services:

Data Analytics

Across industries addressing business trouble and domains to empower organizations with actionable insights through cutting-edge data analytics.

Market Research

For exact answers to the business questions providing research services and strategy consulting.

Global Reporting and Performance Management

To attain operational excellence and productivity, providing competent reporting and performance measurement across industries.

Data Management

Competent solutions for data integration, storage, retrieval and sharing for robust business reporting and analytics as obligatory by various stakeholders.

Achievement of objectives greatly depends upon the skills, domain knowledge, and experience of the people engaged in the activity in the knowledge process. It’s called Knowledge Process Outsourcing when this activity gets outsourced.

Mostly component of Business Processing Outsourcing (BPO), Research Process Outsourcing (RPO) and Analysis Proves Outsourcing (APO) engage in Knowledge Processing Outsourcing (KPO).

KPO provides advanced analytical skills and business expertise than process expertise only. Other than the BPO Industry, this industry is handling the extra amount of highly skilled workers. BPO is concerning size, volume, and efficiency whereas KPO derives its power from the depth of knowledge, experience and judgment aspect.

In international outsourcing scenario, it is the development of the Indian BPO sector which has given rise to the Knowledge Process Outsourcing (KPO). Due to the achievement of many overseas companies in outsourcing business process operations has encouraged many other companies to commence outsourcing high-end knowledge related work.

In outsourcing high-end processes to India, primary expectations are cost savings, operational efficiencies, and access to a highly accomplished and talented workforce and enhanced quality.

This KPO sector has great potential as this KPO sector is not limited to only Information Technology Enabled Services (ITES) sectors and other sectors like Legal Processes, Intellectual Property and Patent related services, Engineering Services, Web Development, Business Research, Legal Research, Clinical Research, Publishing, as well as Market Research.

The main spotlight in today’s competitive environment is to concentrate on core specialism and core-competency areas and outsource the rest of the activities. Several companies have realized that by outsourcing activities, it helps in reducing the cost and efficiencies are improved also the improvement in total business because the focus shifts to growth areas of business activity.

Knowledge process outsourcing (KPO) states the outsourcing of core information-related business activities which form an essential part of a company’s value chain. Knowledge process outsourcing needs advanced analytical and technical skills along with a high degree of specialist expertise.

KPO can be included in businesses. Under this, one could outsource some work to gain expertise on a project. The purpose of outsourcing is to develop a unique approach. The purpose of KPO is to augment in specialized knowledge and expertise, additional value creation, the potential for cost reductions, and a lack of skilled labour.

KPO consist of different tasks like the financial modelling of companies, industry analysis equity research and company and sector research, quantitative analysis, and underwriting support.

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