Knowledge Process Outsourcing (KPO) Overview

What is a
 KPO is a form of outsourcing, in which knowledge-related and information-
KPO?
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.

 KPO’s have evolved from BPO’s.

 KPO’s 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.

 Some of the hot destinations for KPOs other than India are Russia, China,
Czech Republic, Ireland and Israel.
 NEED FOR KPO
1. Accelerate Reengineering Benefits
2. Access to Top Class Capabilities
3. Cash Infusion
4. Free Resources for Other Purposes
5. Function Difficult to Manage or
Out of Control
6. Improve Company Focus
7. Make Capital Funds Available
8. Reduce Operating Costs
9. Reduce Risk
10. Resources not Available Internally
 Evolution of Knowledge Services in India
Inception Growth Consolidation Stabilization
(1996-1998) (1999-2001) (2002-2004) 2005-2010

Characteristics:
• Captive Players to increase
• Start of knowledge • Large captive players • Competition among Third
Party players heat-up foothold in the Knowledge
services enter the market Services market.
• Captive players enter • Third Party players • Market consolidation
• Collaborations between
the Indian market start cropping up • Market Share of Captive Players
Third Party player expected to increase to 68% in
the year 2010 from the current
Examples: 62%

• 1997 - GE Capital • 2001 –Evalueserve, Irevna • Industry will comprise few large
• 1993 - iGate Global
Services establishes its and Netscribes enter as third party players along with
Solutions (formerly Third Party providers the captives.
Mascot systems) back office operations
• Very few boutique firms likely to
establishes its exist on a standalone basis
• 2000 – Third Party market • 2004 – ICRA and Bytes to
offshore center in
competition increases Knowledge (B2K)
Banglore • Independent research for
with Mphasis, FreshMind collaborate to form
and Office Tiger opening Brickwork to offer financial investment banks and large
their operations services businesses to show traction
going ahead
 Difference between KPO and BPO
KPO BPO

Outsourcing of knowledge intensive Outsourcing of standard business

business process and activities process
Value, time to market, scale, Cost is the primary driver
flexibility are the primary drivers,
then cost
Knowledge creation process is not Processes are mostly standardized
well defined
Industry is evolving and clients are Industry is mature and outsourcing
still learning components easily carved out
Clients perceive risk of data Most of the risk have been
security and IP leakage addressed by infrastructure,
processes .
Domain expertise (depth) more Bigger the better: economies of
important than size scale is a competitive advantage
 The spectrum of Knowledge Services
Business Research
Investment Research
 Economics Research
Technology Research  Company and Industry  Corporate Finance
Research  Financial Modeling and Analysis
 IT Services  Documentation & Library
 Application development and maintenance  Investment Banking Support
Services
 Security
 Internet & E- commerce
Market Research
 Data Acquisition and Data Entry
Legal Research  Data Processing
 Presentations
 Legal, Para-Legal Content and Services Knowledge
 Drafting, Review of Documents and
Contracts Services Analytic Services
 Legal Research (Case History)  Data Warehousing
 Data Preparation, ETL services
 MIS & Reporting
 Business Intelligence
Sourcing Management  Statistical and econometric Modeling
 Optimization modeling and OR
 Spend Data Analysis & Supplier intelligence solutions
 Low cost country sourcing
 Advisory Services

Intellectual Property Research Information Management

 Database Creation
 Patent Drafting and Filing, Patentability Assessment
 Quantitative/Financial Statement
 Overlap Analysis, Competitor IP Landscaping
Analysis
 IP Portfolio Management, IP Licensing &
 Data/Information Synthesis
Commercialization
 Functions Of KPO
• Analyzing data and procure information to produce
meaningful documents.

• Researching information database from various sources.

• Converting raw un-transcribed technical data into presentable

documents.

• Use of high levels of conceptualization and theoretical knowledge.

• Proficiency with various advanced software and hardware devices.

• Maintaining workflow, meeting deadlines, and applying quality controls.

India’s Competitive advantage vis-à-vis other nation
 India’s Market Trends
 The service sector accounted for 51% of India’s GDP in 2003
 Estimates that the share of service sector is expected to rise to 57% in 2010.

Share of service Sector in india's GDP

57
58
56
Market Share 54 51
(%) 52
50
48
2003 2010
Year

Source : Evalueserve
 Key emerging issues for KPO
Selling & Transition Pricing
 Best practices for transition?  How to sustain the value proposition to
 Strategies for growth of KPO accounts? the client?
 Maintaining healthy P&L

Service Delivery Contracts

 How should operations be organized  How to define SLA’s for KPO process
for better financials and delivery  Duration of contracts?
conforming to client expectations?

Governance Structures Quality & Risk Management

 Onshore offshore mix  Business Continuity
 Unbundling of roles: Sales/Program  Information security & compliance
Management/Operations  Inventorize information assets
MARKETING STRATEGY
DEVELOPMENT
PRODUCT STRATEGY
 VALUE PROPOSITION
Custom/Cost
Quality Global Coverage
Effective

 Operation centres in
India, Romania, China
and Chile
 Fraction of traditional
 Attention to detail in every  Multi-lingual capabilities
cost
element of Client interaction (50+)
 100% customised Client
 Disciplined project management  Research conducted in
projects
and communication North America, South
 Multi-industry
 Accurate and insightful analysis America, Asia Pacific
experience
 Extensive research infrastructure and EMEA
 Highly scalable
 Local ‘in-country’
support
 24 x 5 coverage
PROMOTIONAL STRATEGY
 KPO Sector SWOT Analysis

Strengths Weaknesses
 Large talented pool Immoral and unethical practices related
 Quality IT training to handling of crucial data
 Low labour costs  Rising wages
 Success of BPOs The inability to uniformly develop and
 Good knowledge of project management provide infrastructural requirements as
skills real estate prices are rising in major cities.
 Supportive government policies  Inadequate Intellectual Property Rights
 Many new areas of specialization are (IPR) protection regime in India
being covered making KPO sector spreading  Billing rates are higher as compared to
its wings billing rates in BPOs
 Consideration to quality standards like
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 grow
added to KPOs faster than the workforce.
PORTER’S GENERIC STRATEGIES
PORTER’S GENERIC STRATEGIES
PORTER’S GENERIC STRATEGIES
Dealing with competition - market
leader
Expanding total market -
1.New users - market penetration, new-
market
segment, geographical expansion
2.New uses
3.More usage
DEALING WITH
COMPETITION
 EVALUE SERVE FLATWORLD SOLUTIONS
•  Flatworld Solutions presents itself as a
• Evalueserve is a pioneer in providing  one-stop shop, offering a broad spectrum
Knowledge Process Outsourcing (KPO)  of services focused on
services, a term it coined in 2003 and gave specialized business process outsourcing
the acronym, KPO. Evalueserve’s services solutions in different industry verticals
include customised  such ashealthcare, logistics, insurance,
Financial and Investment Research,  finance, engineering and mortgage
Business Research, Market Research, 
Intellectual Property, 
Legal Support Services, Supply Chain
Support Services, and 
Knowledge Technology. Through the 
Evalueserve Circle of Experts, it also
provides access to a global network of
domain experts in all major industries
such as Financial Services,
Telecom/IT/High-tech, Healthcare,
Consumer Goods and Retail, Energy and
Utilities, Capital Equipment and Media.
 SERVICES OFFERED
EVALUE SERVE FLATWORLD SOLUTIONS
• Call Center Services
• Data Entry Services
• Engineering Services
• Healthcare Services
• Financial Services
• Software Development
• Photo Editing
• Transcription Services
• Design Services
• Research & Analysis
• Web  Analytics
• Virtual Assistant
• Writing Services
• Customs  Brokerage
Workflow Process:
Evalueserve has developed its own proprietary customisable workflow
system.
Flatworld Solutions’ Five Stage Outsourcing Process
PROMOTIONAL STRATEGIES
 EVALUE SERVE- PROMOTION
Evalueserve is sponsoring IQPC’s Global Patent Congress on 21-22
September 2010 in Copenhagen. Nitin Chaudhary, Manager IP & Legal
Services at Evalueserve, will be speaking on ‘Identify opportunity areas for
new innovations through examination of existing patent portfolios’:
PLACEMENT STRATEGY-FLATWORLD
AND EVALUE SERVE