As the growth of Knowledge Process Outsourcing (KPO) continues, distinguishing it from Business Process Outsourcing (BPO) becomes more important. Though in essence both have the same objective, which is to improve your processes in a cost effective manner, there are fundamental differences between the two.
So what is BPO, and when would it be used?
At a basic level, BPO is outsourcing an element of a business to a third party to encourage cost savings and improve current or potential processes. These will not be core processes, so outsourcing allows the company to concentrate on what it does best. BPO also encourages capacity management; when processes require extensive resources, outsourcing avoids the need to make such adjustments internally. As outsourcing professionals it is important to be flexible to client needs; scaling up and down to meet a client’s demands should be straightforward and speedy.
And KPO…
It could be considered an extension of BPO yet it requires a much more skill driven process and very much has its own identity. The key with KPO is to leverage knowledge or expertise, which by its very nature makes it a more value driven endeavour than BPO. By incorporating the above characteristics, the desired outcome should lead to improved quality of the overall process.
The Process
In terms of strategy, implementing a KPO project is much more complex than that of a BPO project. This is often down to the fact it is less transactional. Unlike BPO, KPO is a core element of a business, which will, in turn, lead to a more complex solution need. This may be better explained by looking at the skills and characteristics required of each…
The staff required for BPO are often entry level to semi-skilled, as the process is often rules based. They focus on particular tasks and pre-arranged processes which can be rather repetitive. Coordination and collaboration for that reason become less relevant, much unlike KPO.
As the work with KPO will require a more judgment-based approach the staff generally need to be professionals in that area with reliable experience. It is this need of expertise that financially sets KPO apart from BPO. The end vision is generally target driven, which is where seamless collaboration and coordination lends itself to KPO.
In Practice
BPO presents itself in a variety of ways; it may be data mining, keying or document digitisation. KPO alternatively might look at database management or more specifically medical claim management. This would require staff that understand the medical profession, who can make a judgement based on the information presented to them, analysing each claim based on the medical information supplied. If the required task was actually medical appointment setting this would then be BPO. The staff wouldn’t require a strong medical background or any such qualifications, just the ability to log appointments.
DDC Outsourcing Solutions have successfully tailored projects for both KPO and BPO needs, if you would like to read more and see specific examples why not check out our case studies here http://www.ddcos.com/case-studies/.
Hopefully, this article has helped you better understand your companies needs and if we can in any way help further please don’t hesitate to contact us and begin your outsourcing journey.
