Many have already heard about business process outsourcing (BPO), especially with its big economy hit a few years before. A lot of individuals and businesses have resorted to integrating this business solution to their strategies, which in turn have served companies and nations across the globe.
But how about knowledge process outsourcing (KPO)? Those who are familiar with BPO may have read a thing or two about KPO. Since there would be instances wherein knowledge process outsourcing is relevant to BPO and in today’s digital age, let us get to know more about KPO, how it differs from business process outsourcing, and how it can help your business and the industry you are in.
What is Knowledge Process Outsourcing?
Knowledge process outsourcing (KPO), from the words itself, refers to the process of outsourcing knowledge services to benefit a business. Closely related to BPO, KPO is often classified as one of BPO’s subsets or one of its processes. From the word ‘outsourcing’, KPO involves hiring and getting services from an individual or contractor to perform information- and knowledge-related processes. Various advanced tasks about specialized knowledge or business solutions given to an organization are outsourced from a different location.
How does this work? KPO usually involves workers from an offshore location who have advanced degrees and expertise about knowledge, information, data and analytics services. At most times, KPO firms provide services to other companies by giving them business solutions rooted in knowledge processes. Because of this, KPO service providers should be able to answer the needs of the said companies and should have a pool of qualified and professional personnel heavily with an extensive background.
BPO vs KPO: Key Differences Between the Two Outsourcing Solutions
Since business process outsourcing and knowledge process outsourcing are often mentioned together, let’s discuss what makes them different from each other.
KPO falls under BPO. It is just one part of the services and processes being done through business process outsourcing. The main difference is that BPO is mainly about outsourcing labor, operation, or services, which are provided to a third party to cut down costs.
BPO is all about developing and implementing process while KPO is more specialized. It is also worth mentioning that KPO involves more specialized, analytical, and knowledge-based work, and not just administrative and other operational tasks of a company. Knowledge process outsourcing is often more complex and heavily data-driven.
Taking note of these, the main difference between KPO and BPO are the services they cover. Although there are differences between the two, outsourcing companies always make sure that their team are more than equipped to provide the services needed by a business, whatever it may be.
What are the Types of KPO Services?
Various KPO services are available in the industry today. To have a more in-depth understanding and learning of the types of KPO services, check out the infographic below. With the continuous innovation and development in this digital age, it is possible that this list will continue to get longer and more extensive.
As you can see, there are a lot of KPO services in the market. That is why hiring the right people for it is very crucial to the business.
Pros and Cons of KPO
Why do businesses invest in and require KPO services for their companies? This is due to the fact that these processes are data-driven and are considered as a foundation of a company’s value chain. Information KPOs process is important in creating valuable products and services that will help businesses drive success.
But what are the “whys and why nots” of companies when considering knowledge process outsourcing? Below is a quick rundown on the pros and cons of knowledge process outsourcing.
Pros of KPO
- Cost-efficient – KPO helps streamline efficiency in the workplace. Operational and production costs are cut down because new and improved processes are developed, thanks to knowledge process outsourcing. Aside from that, KPO also helps in the staffing sector of a company. Through outsourcing, they can get their knowledge-based tasks done without having to pay and maintain full-time in-house staff.
- More productivity – Since processes are more streamlined and efficient, KPOs would bring more productivity to a business. KPO helps identify focal points on what needs to be done. As a result, this greatly helps the decision-making process of the team. Aside from that, experts and professionals specializing in a certain task would be doing the job through KPO; thus, improved results are expected as well as more tasks are being accomplished properly.
- Innovative – KPOs will help businesses follow the trends of innovation and digitization. Because of the subject experts and professionals handling these tasks, innovating is already deemed achievable.
- Flexible – Outsourcing personnel for data-driven and knowledge tasks would allow businesses to be more flexible. Changes and its consequences that could hinder business growth can also be avoided because of knowledge process outsourcing.
- More focus on core business functions – Because there is now a team in charge of developing business solutions based on data and analytics, management and the company would now be able to focus more on other core business functions. This arrangement would help businesses to grow and reach their business goals effectively.
Cons of KPO
- Security – KPO is not safe from a threat of security risks. A company’s data, property, and resources that are considered confidential can be exposed to an outsider of the company.
- Less authority over the team – Since the team being handled is outsourced, the business may face challenges when it comes to gaining authority. Because there is another employer involved, management may not be able to have full control over their personnel.
- Subpar quality of services – The lack of oversight alone is enough to deter a business from availing of KPO services offered by another organization. This is due to the tendency of such companies to provide services that are of inferior quality.
- Communication concern – Difficult communication may be experienced due to linguistic and cultural mismatch. Relying heavily on technology to communicate may also cause other communication problems to arise.
- Cultural differences – If the business is a foreign entity and they have outsourced from a different country, there may be cultural incompatibilities, communication and language barriers, and cultural differences.
The Benefits and Risks of Knowledge Process Outsourcing
KPO firms can provide services that are beneficial to a business or company. If done right, it provides advantages that can help the businesses achieve their business goals. However, choosing a wrong and incompatible KPO firm may impose risks on a business. Confidential information may be given to the wrong hands. This just proves that choosing the right and trustworthy team is the way to go when engaging in knowledge process outsourcing.
Watch this video below to know more about the benefits and risks of KPO:
Best Practices for a Successful Knowledge Process Outsourcing
Here are some tips to ensure that your KPO journey starts right and stays on track.
- Understand and optimize your processes. Aside from learning the ups and downs of knowledge management, you should also make sure that your business will be able to apply the needed changes and innovation.
- Develop a rationale of KPO. Understand and determine why you need to outsource. With this, you will be able to develop and implement businesses strategy and have a smooth KPO experience.
- Choose carefully. Having the right people on your team is key. Make sure that you are equipped with the KPO firm that best suits your business needs.
- Study your competitors. Keep your eye on your competitors and how they utilize knowledge process outsourcing.
- Determine and set terms and management style with your chosen KPO firm. Having an agreement on all aspects with your KPO provider is important. It is also recommended that you involve a legal team for these matters.
- Monitor and analyze. Stay updated with your team and their outputs. One of the rationales for utilizing knowledge process outsourcing is having a solution that is data-driven and backed by facts. Monitor and analyze these strategies and implement, innovate, and maintain them.
- Sustain. Be future-ready. Establish early on that the involvement of knowledge management and KPO will be included in the future plans of your business.
Frequently Asked Questions About KPO
- What is KPO? – Knowledge process outsourcing involves hiring an external team, usually offshore, to perform knowledge management processes for a business or company. The goal of KPO is to have access to data-driven analytics and strategy that will be beneficial for your business.
- Does my company need KPO? – The short answer is a resounding ‘yes’ — with the pool of talent and the cost savings you’ll enjoy, KPO will definitely help you reach your business goals.
- How is this different from BPO? – KPO is just one of the complex components of BPO. Business process outsourcing encompasses everything about the operational processes of a company while KPO is more knowledge-focused.
- Is KPO safe? – Yes, it is. Nonetheless, it’s important to make sure that you have the right personnel and team to outsource.
- How do I protect my company from the risks of KPO? – Monitor your outsourced team. Aside from that, make sure that agreements are done beforehand and are being implemented correctly.
- I want to try KPO. Where do I start? – Finding the right team for your needs is the first step. Let us help you with that!
Hire Outsource-Philippines for Your KPO Services Needs Today!
If you are ready to dive right into knowledge process outsourcing for your company, you have come to the right place! With Outsource Philippines, you get the outsourcing services you need — and more. We have an extensive pool of advanced and specialized professionals that will help you achieve what your business needs. What are you waiting for? Contact us today!