Knowledge process outsourcing
From Wikipedia, the free encyclopedia
Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost. Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.
Process transparency is a major barrier to using KPO services.[clarification needed] Many organizations do not track carefully which decisions are made by whom, and rely so much on informal social processes (and "soft skills") that it is unclear how much the use of KPO would disrupt existing operations. However, requirements like Sarbanes-Oxley and radical transparency movements like full cost accounting, shareholder activism and eco-labels and moral purchasing require organizations to be more explicit about when and by whom decisions are made. These trends make it easier for outsourcing non-critical jobs to be considered by qualifying the impact of decisions in advance.[clarification needed] Furthermore, it becomes easier to evaluate and compare success. A fully developed service economy enables KPO by treating all functions as services.[clarification needed] So do more technical trends such as service oriented architecture, enterprise application integration and telework: it is easier to outsource a job if it is already being performed outside the head office. Organizations adopting ISO 9000 and ISO 19011 should also find it much easier to integrate externally provided KPO into their operations and audit them on a fair basis.
As of 2007, most US organizations were hiring foreign professionals under H-1 visas to do jobs in the USA for several years, after which they would return to their home countries as managers to train and supervise others, continuing to report to their former business units.
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[edit] Challenges to providers
In addition to the challenges faced by clients, KPO companies themselves have challenges:
- High staff turnover, especially where work is not challenging to the employee's skills
- High cost of training and tendency to lose the most experienced employees to the clients
- Ensuring the security and confidentiality of information, especially when privacy laws vary from country to country
[edit] Market researching
Leaders in the market research industry are slowly seeing the benefits offered by KPO and have begun outsourcing.[citation needed] Comprehensive IT solutions are offered by vendors who provide solutions covering the entire life cycle of a market research project. Smaller firms can also benefit from these solutions as they are cost effective and remain within the budget of smaller organizations.
KPO is claimed to efficiently increase productivity and increase cost savings in the area of market research.[citation needed] Advocates claim that the trend is likely to prove increasingly popular in the global market research industry.
[edit] See also
[edit] References
[edit] External links
- Trading Labor on Wall Street: Examining India’s KPO Space by Frank Yazdi
- Why India can be global knowledge economy leader by Kandathil K Jacob (rediff.com)
- Outsourcing becoming knowledge outsourcing (PhysOrg.com)
