What is KPO Industry? (Plus Benefits of Outsourcing Your Business Solutions)

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With the rise of technology and digital transformation, businesses opt to hire third-party vendors to improve their business functions. Because of this, business process outsourcing (BPO) has become one of the world’s largest industries. The BPO industry helps companies globalize their business processes while increasing productivity.

The success of BPO has paved the way for a new outsourcing concept—knowledge processing outsourcing (KPO). If you’re not yet familiar with the KPO industry and how you can benefit from it, you’re on the right page. In this article, we’ll discuss everything you need to know about the industry. But first, let’s talk about how KPO is different from BPO.

What is the Difference Between BPO and KPO Industry?

BPO is a way of outsourcing business services and operations to third-party vendors. They can operate in the same country or in other parts of the world. BPO firms provide solutions in a wide range of industries such as IT, human resources, and quality assurance, to name a few. These services ensure that the business processes of their clients run smoothly. Most of these BPO jobs have been booming in countries like India, China, and the Philippines.

The KPO industry, on the other hand, focuses on outsourcing knowledge-based tasks and resources such as data analytics, research, and digital marketing, among others. These services strengthen, innovate, and improve the businesses of their clients. Businesspeople leverage the KPO industry to help them make effective business decisions, grow their audience, and improve their brand.

Reasons Companies Outsource Core Information

The KPO industry has helped enhance the potential and improve the sales of its partner organizations. This type of outsourcing has changed how the market works by using knowledge and skills as its core services. Here are some of the benefits that businesses will gain from outsourcing.

A group of professionals in the KPO industry

1. Skilled Professionals

KPO resources, such as virtual assistants, specialize in one or more fields. The most common skills among KPO specialists are social media management and content creation. Outsourcing partners are responsible for finding the best professionals with the skills to meet your business needs. Because of this, businesses can focus on managing their companies.

2. Time Efficiency

KPO companies help business owners outsource expert professionals to save time for onboarding and training. Hence, they can work on pending tasks and projects straight away. A KPO firm is helpful for companies that have too many pending tasks and need resources in the shortest amount of time.

3. Flexible Rates

There are different pricing models that companies can avail of. It can be based on the scale of operation, the scope of work, and project duration. Thus, it’s best to ask for a free quote to know if the rates meet your budget and needs. Here are some of the most popular outsourcing price models for your reference.


This model works best for short projects, regardless of the deliverables. Clients will be charged for their actual consumption of services within a period of time.


This pricing model is for clients who prefer giving out incentives or perks to service providers who have reached their quota or delivered great work.


Clients will only have to pay for the final output, regardless of the duration of work or the number of outputs.

The examples above are just some of the most popular payment models out there. When it comes to outsourcing, clients and the outsourcing partner can come up with a flexible rate that would be beneficial for both parties.

4. Reduced Cost

Another benefit of outsourcing is its ability to minimize costs. By outsourcing to third-party companies, business managers can cut down on costs such as rent of office spaces, utilities, and taxes. In fact, 59% of businesses outsource to save money.

5. Increased Productivity

When your in-house staff can focus on their core responsibilities, they can be more efficient and productive. This can be achieved when you outsource some of your business functions.

Top Services Under KPO Industry 

Now that you have an idea about the perks of outsourcing knowledge-based functions, let’s dig into KPO services. Here are the top KPO solutions you can hire.

Medical field showing work on KPO industry

Medical and Healthcare

With continuous technological innovation, many clinics and other health facilities hire third-party service providers that can provide medical and healthcare assistance, such as a medical answering support team.

Data Analysis and Interpretation

Research, data gathering, analysis, and interpretation require time and expertise. With KPO, you can let the professionals work on tasks related to data management.

Marketing and Communication

Online presence is vital to growing your business, especially in this digital age. That said, if you want to increase your sales and improve your brand reputation, outsourcing marketing and communication is a great move for your company.

Software Development

As technology continues to evolve, the demand for software development skyrockets. Regardless of whether your business is IT-centered or not, hiring third-party vendors that offer services in information technology, software engineering, and AI data solutions can give your production the boost it needs.

Animation and Design

Another service businesses outsource to KPO companies is animation and design. This includes engineering design services such as CAD and 3D modeling services.

Creative Services

Promoting your business or organization is easy when you have marketing assets such as company logos, newsletters, and brochures, to name a few. Fortunately, the KPO industry includes creative services such as graphic design and video production.

Challenges Faced by the KPO Industry

Just like BPO, the KPO industry deals with hurdles. With the volume of companies that depend on KPO to improve their business functions, outsourcing knowledge processes becomes challenging. Here are some of the common issues that KPO vendors encounter.

  • Different time zones
  • Lack of expert professionals
  • Data security and confidentiality
  • Risk management
  • Project control and monitoring
  • Infrastructure and real estate price hikes
A group of professionals working for KPO industry

Hire Dedicated Offshore Team in the Philippines

With KPO being one of the hottest industries in the world today, there’s a long list of countries to outsource from, with the Philippines at the forefront. Many international businesses choose to partner with outsourcing companies from the Philippines. This is because Filipinos are known for their fluency in English. Most of all, they have impressive work ethics. No wonder the KPO industry in the Philippines is growing steadily.

More importantly, statistics backs up the Philippines as the hub in the world for outsourcing. According to Nexford University, in 2019, approximately 1.3 million Filipinos worked for more than 1,000 KPO firms. This number is expected to grow by up to 10% every year.

As mentioned earlier, there are many benefits businesses can gain from partnering with KPO firms. It’s also imperative for companies to keep up with the latest trends and discover new ways to innovate and grow their businesses. If you want to expand your operation, market, and brand, outsourcing in the Philippines should be at the top of your next business goal.

Look no further; Outsource-Philippines offers high-quality KPO services at a reasonable price. Focus on your role and let us do the daunting tasks. Together, with our KPO specialists, let’s improve your business functions and strive for success.