'KPO Industry will Grow Despite Downturn'

Knowledge Processing Outsourcing (KPO), over which India holds the sway with a potential $12 billion market by 2010, is expected to grow despite global recession and the country could maintain its leadership in the KPO sector with stable government policies.

"India has competitive people costs which is sustainable at least for the next seven to ten years. There is an established ITES (Information Technology Enabled Services) sector with good management, plus a reasonable sized talent-pool of human expertise in many areas. All this coupled with fairly stable government policies could help India in its quest to maintain leadership in the KPO sector by a wide margin," Chandu Nair, President and Director of Scope e-Knowledge Center, a leading KPO company, told PTI.

According to an earlier estimate of National Association of Software and Service companies (Nasscom), the apex business association, the KPO sector is expected to be worth $17 billion by 2010 of which $12 billion would be outsourced to India.

"Despite the recession in the US and UK/Europe, NASSCOM still feels that IT/BPO sector would grow in the FY 2008-09. There has been an impact on certain companies, especially those with clients predominantly in certain sectors - financial services - or high exposure to clients which have gone bankrupt," he said.

Seeking to differentiate KPO and BPO, Nair said BPO is essentially process or rules based while KPO is more expertise or judgment based.

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An Attractive KPO Destination

The Cebu province in Philippines is all set to become Knowledge Process Outsourcing (KPO) hub. The Business Process Association of the Philippines' (BPAP) former Chairman Bong Borja pointed out that in order to convert Southern Philippines into a MBA hub, Cebu is on the move to attract this high-level outsourcing service.

Borja, currently the Chief Executive Officer of call center giant Aegis People Support, said that although the BPO voice service promises immense potentiality, the KPO market is anticipated to greatly add to the employment generation as well as the investment revenue of the province.

KPO is the upward shift of BPO in the value chain. Old BPO companies that used to provide basic backend or customer care support are moving up this value chain. In addition to providing expertise in the processes themselves, it also involves low level business decisions. The fundamental theme of KPO is to create value for the client by providing business skill rather than process expertise. So KPO involves a shift from uniform processes to advanced analytical thinking, technical skills and decisive judgment based on experience. “These are the very expensive or high-paying type of outsourcing. I believe we have the talents and raw ingredients to attract the KPO market,” Borja said.

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Can KPO be a long-term career?

If you are a student of IIM , IIT or a professional in any specialised field (such as a CA, doctor, engineer or a lawyer) or even a doctorate in any field, would you consider joining the Knowledge Process Outsourcing (KPO) industry as a viable career option? Think carefully.

“I had never planned to join a KPO,” says research analyst Arul Thareja. “After completing my internship with Bharat Petroleum , I shifted to marketing and went on to work as brand manager with Maruti Suzuki and later Panasonic. I decided to explore the KPO sector about two years ago and have not regretted the decision.”

Thareja, a chemical engineer opted for a career in marketing after completing his MBA , and now works with EMR Technologies. He says, “As the work is knowledge intensive and requires a significant domain expertise, I find it exciting and challenging. Of course the pay is also good.”

“It is a growing industry and the promotions are also faster in this sector,” feels Sanjay Narang, a chartered accountant. “I worked for two years in the MIS division of a firm before shifting to a KPO. I am in a better post today than many of my former colleagues and friends,” says he. Today he is a manager operations, commercial mortgages.

According to a study carried out by Baring Private Equity Partners (India) Limited, a venture capital financing firm, the size of the KPO industry, the high-end services entailed in business process outsourcing (BPO) activities, has the potential to touch $16 bn by 2010 globally.

As per Nasscom estimates, the KPO industry is expected to grow by 45 per cent by 2010. Out of the $16 bn, which the KPO industry is likely to earn around $12 billion would be outsourced from India.

So is working in a KPO truly a better option in today’s times? “It depends on your personal priorities in life,” says TK Kurien, CEO, Wipro BPO. “We have about 30 per cent attrition at the end of a year. The KPO functions are usually specialised so one gets restricted to catering for niche segment. In the long run, one has to make a decision whether he is looking for a horizontal skill building or a vertical growth.”

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Training in technical language must for KPO services

MUMBAI: Move over BPO, knowledge process outsourcing (KPO) is the latest buzzword these days. Here, fluency in communication, especially written communication, becomes imperative as employees are essentially using judgement to interpret data in areas like research; or case law in the field of legal outsourcing. “With no clear definition of right or wrong, the manner in which a sentence is constructed, the nature of language used may play a critical role in overall perceptions of quality of service delivered,” he says.

Written communication skills have thus become an integral part of daily work, as well as a necessary ingredient to working in geographically-dispersed teams. In the legal arena, for instance, almost half the work in US litigation is written advocacy, says Abhay ‘Rocky’ Dhir, president of Atlas Legal Research, a US-based legal process outsourcing (LPO) firm with offices in Chennai and Bangalore. “And often, what we write will appear verbatim in front of a US judge. In KPO, knowledge is not something you verbalise. Everything is being passed in a written format,” he adds. Same is the case for firms like Thomson West, a global publishing house with a pilot office in India that prepares summaries of unpublished US court decisions.

In high-end medical services, offshoring areas of growth include diagnostic services, telemedicine, telepathology and testing services like genetic profiling, oncology tests, HIV and allergy tests. “Training is believed to a key enabler of process accuracy, for which new employees are typically trained for a period of nine months in areas such as listening skills, medical language and other basic transcription skills,” notes a PwC study on the KPO industry. E-learning and healthcare knowledge management are currently untapped avenues, which will focus more on writing skills.

Training in technical language is considered an essential part of KPO services, since the industry recruits both professionally-trained and mainstream graduates who, often under the guidance of US-trained experts, undertake specialised high-end work.

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