The advent of KPO (Knowledge Process Outsourcing) occurred when global corporations realized that apart from software development, IT support, and low-end business processes, high-end research related works could also be outsourced to a destination that has a basic infrastructure, and a pool of skilled manpower to meet expectations of the companies.

Certainly, India is one of those few countries that meet all these basic criteria and has a potential to offer a profitable and scalable research based service model to corporations that are looking to improve their bottom line.

India is all set to capture 70 percent of the $17-billion global KPO market, translating to a market size of $12 billion. For global corporations looking to move their higher-end research like IP research, equity research, market research, analytical services, engineering design, legal services, remote education and publishing, India is one of the preferred destinations.

KPO or Knowledge Process Outsourcing is one step ahead of BPO (Business Process Outsourcing) that involves the transfer of business processes requiring specialized domain-specific knowledge and business expertise of a higher level (rather than just process expertise) to other geographic locations.

Growth drivers/Strengths that make India a preferred KPO destination

  • Large talented pools  KPO Industries
  • Proficiency in the English language
  • Highly qualified and trained professionals in the field of IT, Engineering, Pharma, Law, and Finance
  • Indian KPOs are willing to outsource their knowledge at a very prohibitive price
  • Dearth of knowledge professionals in countries like USA and UK
  • Well established IT services and BPO sectors  KPO Industries
  • Excellent project management skills
  • Supporting regulatory policies
  • Consideration of quality standards like ISO 900x and Six Sigma

Despite the fact that India is poised to become a knowledge process outsourcing hub there are some threats those should be addressed by the Indian KPO industry at the earliest, failing which could lead to a situation where other countries may get benefitted.

Below are some of the threats that the Indian KPO industries can encounter in upcoming years.

  • High attrition rate  KPO Industries
  • Huge demand-supply gap in the industry
  • High cost of training  KPO Industries
  • Ensuring the security and confidentiality of information, especially when privacy laws vary from country to country
  • Emergence of other low-wage countries in the scene
  • Appreciation of Indian rupee, especially when compared to the US dollar, is gradually making Indian KPO companies less competitive

Word of Caution

Undoubtedly, Indian KPO industry is increasing at an unprecedented rate and there is immense potential in the domain, still, there are many other things that can hamper its overall growth in upcoming years. Experts believe that due to rapid economic, technological, and socio-cultural growth India may lose its low-cost advantage and other countries may enter into the scenario. The best way to address this issue is by creating an indigenous KPO industry.

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