Knowledge Process Outsourcing, or KPO, is the latest wave to hit the
Outsourcing business in India. A booming
sector with tremendous potential, the KPO sector in India employs around 25,000
people currently.
But experts say that KPO is set to be worth a $14 billion business employing 250,000 people in India by 2010.
Find out more about KPO, which is likely to surpass BPO (business process outsourcing) in India.
What is KPO?
KPO is
Knowledge Process Outsourcing. It involves outsourcing for high-end knowledge work. This includes
research and work on intellectual property, equity and finance, analytics, market research and data management, et cetera.
Why is India the preferred KPO destination?
India has a growing population of educated people capable of handling high-end knowledge-based work and research. With a huge talent pool, India could emerge as a global KPO hub as the sector requires specialised knowledge in respective verticals.
With the mushrooming of engineering and technical institutes in India, there will no shortage of skilled manpower in India. A Confederation of Indian Industry study states that India's transition from a BPO destination to a KPO destination is imminent.
Apart from India, countries such as Russia, China, the Czech Republic, Ireland and Israel are also expected to bag a lucrative pie of the KPO industry.
The cost advantage: More and more companies are turning to India for offshoring KPO work as quality work gets done at cheaper rates. India also offers significant cost advantages as much as 40 to 50 per cent in the areas of research and clinical trials
What are KPO's focus areas? Areas with significant
potential for KPO include pharmaceuticals, biotechnology, data search, integration and management services, financial services, research and analytics, technology research, computer-aided simulation and engineering design and professional services, such as business research and legal services.
Offshoring research and development in pharmaceuticals and biotechnology also holds great potential for KPO.
More foreign firms head for India Law firms such as Patent Metrix, Cantor-Colburn and Schwegman, Lundberg, and Woessner & Kluth have already set up offices in India. Offshoring R&D in pharmaceuticals and biotechnology also has enormous potential for KPO.
Pharma majors Astra Zeneca and GlaxoSmithKline have set up drug discovery centres at low-cost destinations to boost their research and development activities. Even for R&D in software and chip design, major telecom and IT companies opt for India.
Motorola, Intel, IBM, Cisco, Texas Instruments, Nokia and Philips have set up offshore design centres in India.
Challenges that face KPO Like the BPO sector, KPO also faces attrition, as it is difficult for companies to retain talented and trained people. With higher pay packages and perks, people change jobs very frequently. Many people are still reluctant to join as they feel it is an unstable career.
Many are unaware of the potential of this sector and the scope of future prospects. There is a lot of scope for teachers as this sector offers a good pay package. The sector also requires higher level of control, confidentiality and enhanced risk management.
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