Prospect of Indian KPO Industry – KPMG Research

Recently, I came across an interesting research report on Knowledge process Outsourcing (KPO) from KPMG. The report focused on different aspects in Knowledge Process Outsourcing. Broadly, the report delved on the following points:

• Emergence of KPO industry especially financial services KPO
• Comparison of KPO with ITO and BPO industry
• Viability of KPO industry in different countries
• Teething problems faced by Indian KPO industry

The report also profiles few emerging KPO firms that participated in the survey.

Prominent findings of the research are as follows:

• Knowledge Process Outsourcing (KPO) enables clients to unlock their top-line growth by outsourcing their core work to locations that have a highly skilled and relatively cheap talent pool.
• KPO is about “intellectual arbitrage”. This differentiates KPO from BPO, both of which emphasize cost arbitrage. KPO is characterized by niche offerings, highly skilled staff and a relatively small scale. It cuts into the traditional “core competencies” of many organizations.
• Knowledge processes are fundamentally different from business processes, with clear differences in process complexity, skill sets and scalability.
• There is a good mix of both third-party and captive structures in the KPO industry at present.
• Organizations with experience in outsourcing IT and business processes will likely have a shorter learning curve when entering into KPO.
• Decisions about outsourcing may be accelerated to preserve and increase competitive advantage.
• The KPO industry’s staff qualifications and skill-set requirements are significantly different from those of the BPO industry. This requires KPO providers to develop specialized recruitment and retention strategies.
• The location selection for KPO should take into account the nature of knowledge process work, skill sets, and supporting educational and certification organizations which are expected to produce a supply of talent in the selected location.
• India is currently the leading country providing KPO services. However, other countries have the potential to capture significant KPO market share, by better leveraging the depth and maturity of existing skill sets, and in some cases, their non-English language capabilities.
• Within the KPO industry, legal and compliance departments are currently under resourced and inadequately empowered. This has implications for managing insider trading, conflicts-of-interest, intellectual property and professional indemnity liabilities.

If interested in reading further, you can download the detailed report (1.5MB) from here or www.in.kpmg.com.

A link to report on “Scope of Financial research in India” can also be found here.

Lastly, if you want more information on Indian KPO industry, the job prospects and different companies in this sector, you can have a look at www.kprofessionals.com