KPO (Knowledge Process Outsourcing) is a word rarely used and many believe it is the same as BPO (Business Process Outsourcing). KPO is a subset of BPO meaning KPO handles the knowledge business processes out of all the business processes any company has.

Outsourcing work through BPO (Business Process Outsourcing) and KPO (Knowledge Process Outsourcing) definitely helps companies to cut down on their operating costs and concentrate more on their other core business activities.

What is the buzz about KPO? Let’s understand about the differences

Difference between KPO and BPO – Nature of work

The work handled by KPO relates to research and analytics which is complex when compared to the services offered by BPO which are relatively simple in nature. These include credit card processing, marketing, insurance policy underwriting, securities processing, etc.  KPO offers services which include content development and publishing, legal transcription, portfolio pricing, product engineering, equity research, portfolio pricing, marketing analytics etc.

Difference between KPO and BPO – Salary Levels

KPO has a higher income generating capacity – in fact, almost double that of BPO’s.  Since income generation is high on the list of business priorities, outsourcing of KPO related services is touching new highs.

Difference between KPO and BPO – Skill Set

Because of the specific expertise required for KPO outsourcing, only people with degrees such as CFA, MBA, medical, engineering etc. are hired for such work. With regard to BPO, as it involves dealing in standard business procedures, hands-on learning is sufficient. The basic requirements are computer proficiency and good communication skills.

Difference between KPO and BPO – Challenges

KPO faces challenges with regard to hiring people with requisite skills. This sector also needs to be wary of data theft, regulatory loopholes prevalent in different countries, and intellectual property issues. BPO has to battle problems such as rise in wages, attrition rate etc.

As can be seen from the above points, KPO and BPO service providers are entirely different in the type of work they handle. While the former adds business value to outsourcing directly, the latter concentrates on sweetening the business value indirectly.