Knowledge Process Outsourcing

The World Bank Institute offers a formal definition of a knowledge economy as one that creates, disseminates, and uses knowledge to enhance its growth and development. Knowledge process outsourcing (KPO), though being in its nascent stages has started to compete with its much older sibling business process outsourcing (BPO). KPOs rely heavily on the use of knowledge technologies such as knowledge engineering and knowledge management to produce economic benefits.

Sectors in which KPOs operate

Some of the various sectors that are included in KPO are illustrated in the following figure.



There are a few KPOs that are operating from India, however only a few such as S.G Analytics work in the area of Financial Services and Market Research and Analytics. The research areas of such KPOs include (but is not limited to)

• Equity research
• Sector research
• Thematic research
• Fund analysis
• M&A support
• Investor proposals
  

Challenges faced by the KPO industry:

In spite of the current economic slowdown, the market of the above research areas is expected to grow to about $10 billion by 2014. This eye-opener was first brought to public notice in the following blog post . The presentation gives an idea of recruitment challenges of the KPOs. I am glad that one of the key players in this industry has made this available

Pune as the most suitable destination for a KPO in India:

An article in rediff.com , gives some of the few reasons why India offers the highest potential for Knowledge Process Outsourcing (KPO).

• India enjoys unique advantages in having a large pool of English-speaking professionals.
  
• The Indian Diaspora are a rich source of domain expertise and can be motivated to help transfer knowledge and expertise to India and nurture a new generation of India-based thought leaders.
• The entrepreneurial and energetic business community in India has the capacity to step up to this challenge.
  

The above facts have been supported by the former president of India, Dr. A P J Abdul Kalam, in his book titled India 2020: A Vision for the New Millennium.

As pointed out by S G Analytics, the advantages of being a KPO in Pune include:

• Access to fresh talent: Termed as Oxford of the East more than 70 educational institutions (colleges and universities), 50,000 students and 3,000 MBAs graduating each year!
  
• Access to experienced and senior talent - Industrial zone with more than 30 large companies (>2000 staff) and more than 2000 SMEs. Outsourcing hub of India (IT services companies, BPO's KPO's)
  
• Access to sector research and language capabilities - Research institutions such as NCL (National Chemical Laboratory), NIV (National Institute of Virology), IUCAA (Indian equivalent of CERN) and C-DAC (Centre for development of advanced computing).
  
• Language capabilities - More than 200 certified German, 70 certified French and 50 certified Japanese translators graduating each year.