KPO

(KNOWLEDGE PROCESS OUTSOURCING)

The next big

opportunity
Presented By
Sanjeev Prasad
Akhilesh Mishra
Paradigm shifts taking place in various facets of MBA education.
Earlier Now
Production and Operations ERP, CRM, SCM and IT enabled
Management manufacturing.
Marketing Management E-business, E-com, planning
web enabled marketing, global
international business, B2B
and B2C market places and
Cyber exchanges etc;
Human Resources E-HRM, outsourced web based
Management HR management, Distributed
HRM etc;
Finance Management Globalized economy, E-enabled
financial data bases, IT in
markets management etc;
Systems Management ICE or IT Technology
components, Networking, Sun
and Microsoft and other
Technologies, IT management,
Knowledge management,
Business Intelligence etc.
 THE VALUE CHAIN
CEO

Sr. Executives/MANAGERS

KPO

BPO

CALL CENTRE EXECUTIVE

 Difference between KPOs and BPOs:
We can say that KPOs emerged from BPOs.

BPO KPO
It provides services like customer KPO provides in-depth
care, technical support through knowledge, expertise and
voice processes, tele-marketing, analysis on complex areas like
sales, etc. Legal Services, Business &
Market Research, etc.
•Low end services •High end services

•Process expertise •Knowledge expertise

•Pre-defined processes •Requires application,

•It employees not- so- qualified understanding of business and

workers as it focuses on analytical bent of mind
communication skills It involves skill and expertise of
knowledge workers with
excellent educational
background.
The kind of job it entails

content development
market research
equity research
data research
database creation
analytical services
financial modeling
design and development in industries
remote education
publishing and legal support
How it can make India a global player

Large talent pools and favorable government policies together make

India the most conducive environment for KPO

Several global players such as McKinsey, Reuters, Harris Interactive

and Ipsos among others are already investing in India.

As with the BPO sector, India is cost-effective and provides a vast

intellectual talent with expertise in areas such as research and
analysis.

These companies outsource their processes to India for:

Cost savings
Operational efficiencies
Access to highly skilled workforce
Improved quality
Why KPO ?
KPO is a quick-money sector
provides long-term career option
good performers have tremendous opportunity for growth in
salary package,
favorable business environment
Governments Policy decision encourage this sector
Strong requirement of Well-educated, knowledgeable,
analytical candidates

HISTORY of KPO Sector in INDIA

KPOs have evolved from BPOs.
KPOs were introduced in India by McKinsey when it first set
up a knowledge center in India in 1987.
But KPOs actually started coming up in India in 2000 when
many companies like OfficeTiger, GE, Gartner, etc opened
their research centers here. From 2000 to 2005, KPOs were in
their growing stage. And during this duration, India became a
Skills KPOs are looking for:
Analytical skills for analyzing data.
Usage of resources for information research
Making presentable reports from raw data
Theoretical and conceptualization knowledge
Computer proficiency (software and hardware devices)
English Speaking/writing skills
To collate, synthesis, analyze interpret Data and Information
To Search for advance information
To Generate various scenarios, judgments and decision Making
High level of Conceptualization
Team Work
The following are the areas associated with the KPO sector.

Business and Technical Analysis

Business & Market, Equity Research
Data Analytics
Financial Consultancy and Services
Intellectual Property (IP) Research
Learning Solutions
Legal Services
Database Creation
Network Management
Financial Modelling
Research & Development
Training & Consultancy
Writing & Content Development
SWOT ANALYSIS
Strengths Weaknesses
•Large talented pool • Immoral and unethical practices
•Quality IT training related to handling of crucial data
•Low labour costs • Rising wages
•Success of BPOs • The inability to uniformly develop and
•Good knowledge of project provide infrastructural requirements as
management skills real estate prices are rising in major
•Supportive government policies cities.
•Many new areas of specialization are • Inadequate Intellectual Property
being covered making KPO sector Rights (IPR) protection regime in India
spreading its wings • Billing rates are higher as compared
•Consideration to quality standards like to billing rates in BPOs
ISO 900x and Six Sigma
•Billing rates are lower as compared to

billing rates in other countries

Opportunities Threats
•Increasing domain expertise •Non retention of talent
•More areas of specialization can be •Expected labour supply gap as jobs

added to KPOs grow faster than the workforce.

•Ample opportunities for SMEs
KPO OPPURTUNITIES IN THE FOLLOWING SECTORS

RETAIL
E-MARKETING
BUSINESS & TECHNICAL
ANALYSIS
LEARNING SOLUTION
DATA ANALYTICS
INTELLECTUAL PROPERTY RIGHTS
INVESTMENT RESEARCH
LEGAL & INSURANCE CLAIMS
 HIGHEST PAYING KPO FIRMS
Gold mans sachs bangalore
Deutsche bank bombay
UBS hyderabad
SBI capital
JP morgan chase bombay
Kotak bank bombay
ICICI bombay
Evalueserve delhi
Genpact
WNS
Copal partners
Lehman brothers bombay
Lozenge Consultancy Services
Patni Computer Systems
Hutchison Essar
Hector & Streak
Unlike conventional BPO where the focus is on process expertise, in KPO,
the focus is on knowledge expertise.

KPO involves business processes requiring domain expertise and high-end

qualifications such as the MBA and/or the engineering, medical, law,
accountant degree or other highly skilled professional qualifications.

KPO requires moving away from the simple execution of standardised

processes to the implementation of processes that demand advanced
analytical and technical skills together with some decision-making.

India, China, Russia, Canada, Israel and the Philippines are some of
the major KPO service providers today.

A BPO executive in a developing nation earns about $6,000 a year whereas

his KPO counterpart can earn over $8,800 annually– a huge 46 per cent
difference.
REQUIREMENT FROM AN M.B.A STUDENT
Domain Knowledge, I.T, E.R.P, Business Applications, E-commerce

Qualifications :
MBAs (HR, IT, Finance, Marketing, IB, etc )
Doctors ( MBBS)
Engineers (B. E., B. Tech, M. Tech)
Lawyers (LLB)
Teachers (B. Ed)
Chartered Accountants
Economists
Architects

So basically, the key competencies required are :

Domain knowledge
Basic interest in the field of work
Aptitude for working with data and information
Good communication skills
Team work
 Future Scenario

In 2003, the market share of Indian KPO sector in global KPO market
was 56%. And it is expected to reach 71% in 2010, which shows a
decent growth of the sector in the coming years.

According to NASSCOM,
KPO sector worldwide is expected to reach USD 17 billion by 2010.
Out of this, India will account for USD 12 billion.
 Market potential for outsourced non-IT
services (2008)

Service Potential (In billion Dollars)

HR Service 44
Customer interaction services 33
Data Search, integration and
Management 18
Finance and accounting 15
Remote education 15
Other including pharmaceutical and
research and development 8
Engineering and design 5
Medical Content and services 1
Legal Content and services 1
Translation, transportation etc. 1
 CLASSIFICATION OF KPO SECTOR

Financial Services : These include financial determining, insurance, risk assessment,

equity research, underwriting, fund management, actuarial analytics,
debt collection and recovery, corporate & market research, etc.
Some of the KPOs working in this area are Smart Analyst, Office Tiger, The Smart Cube.

Market Research and Analytics : These include services like writing & editing,
secondary & primary research, formatting client reports, conversion of findings to
knowledge, etc. Some of the KPOs working in this area are marketRx, Pipal Research,
Evalueserve, Inductis, OfficeTiger, Copal Partners, CRISIL, etc.
 India is emerging as a leader in KPO market
•Well established IT services and BPO sector
•Excellent project management skills
•Highly qualified professionals
•Proficiency in English
•Supporting government policies

Challenges which KPO industry is facing are as following:

•Expected dearth of domain expert professionals
•High attrition rates
•Talent retention
•Data Security and confidentiality

Growth drivers of KPO sector:

Shortage of knowledge professionals in countries like USA, UK, etc.
Low wages labour
BPOs moving up the value chain
Single vendor services
Talented workforce
y

o
u
t
Why KPO’s
t
h
In the next 5 years India will employee more than 2.5 lac people
e

w
70% of the global KPO business.
o
r
India has the world's second highest number of engineers, scientists, managers.
k
. Also, it has the largest talent pool in IT industry with approximately
T
h 50% of them proficient in English.
e
r
e

If you are a fresh graduate and you want a high paying job
f
o
r
e
MBA's, CA's, law graduates etc.with a starting package of 4.2 to 4.8 lacs per
m
a
n
annum.
y

c
Exevo, Evalueserve or Pipal Research, the package can go upto 6 lacs per anum.
o
m
p
a
n
Salaries in Indian KPO are 25%-50% higher than in other KPOs around the world.
i
e
s

o Salaries are bound to increase later on also as the work outsourced to Indian
f
f
e
KPOs is of high quality and of complex nature. It takes a lot of expertise and
r

t
skills to carry out the work.
h
e Therefore many companies offer their employees 6 monthly salary hikes
i
r anywhere between 15%-20%.
e
m
p
l
o
And in the future also, the salaries are going to rise in the Indian KPO sector.
This trend will last at least upto next 10-15 years.
y
e
e
s
The reason being India's demography and the young talent pool available here.
6

m
 S. No. Companies
Top Players 1. Evalueserve (EVS)
in 2. McKinsey & Company
3. RocSearch
KPO 4. Pangea3
Sector 5. OfficeTiger
6 Copal Partners
7. Gevity
8. Pipal Research
9. Grail Research
10. Inductis, EXL Service
11. WNS GLOBAL SERVICES
12. ACCENTURE
13. APTARA (TECHBOOKS)
14. 24/7 Customer
15. ICICI OneSource
16. Ugam Solutions
17. Convergys
NEWS FROM THE KPO INDUSTRY

YES Bank setting up a KPO

•

YES Bank, a famous name in private sector banks, is all set to open up a
knowledge processing outsourcing (KPO) unit. It is a stand alone project and
it will be named as Project TOPS (technology, operations, payments and
services). As estimated by Rana Kapoor, MD and CEO, YES Bank, the unit
will start operating in FY 2008-09. Initially it will provide services in
banking sector. The pilot project presently is being run at YES Bank's
offices at DLF Cyber City in Gurgaon and in Mahalakshmi in Mumbai. Around
500 people are working on the pilot project as of now. Till now applications
like audit and compliance are being outsourced to the unit. But later on it
will move on to other financial services as well.

India to be preferred location for global

KPO industry: KPMG
The financial services sector will account for a
major proportion of the KPO industry and its
worth will be in excess of $5 billion by 2010.
India top outsourcing hubs, says survey

India remains the most favoured outsourcing destination,

according to CyberMedia's Global Services survey on
emerging outsourcing destinations in 2007.

Even as fears that the rupee appreciation and rising wage

costs would blunt its edge,
India still boasts of the largest number of cities (6),
which figure among the top-50 emerging cities,
followed by China (5), Brazil (3), the Philippines (3) and
the US (3),
among others.
 The last word:
It would not be very wrong to state that KPO
do offer an alternate and fruitful career
path for our young minds.

Going by the current statistics, the KPO wave

is here to stay and Indians can now benefit
much more than before.

“Knowledge Process Outsourcing May Be

The Next Boom Business”