Firstly, let’s understand BPO and work our way through to defining KPO.
BPO or Business Process Outsourcing is engaging with an external company to carry out dedicated business activities for you. In short, BPO is contracting out your process orientated tasks to a third party, also commonly referred to as outsourcing or offshoring.
Manufacturing and customer service mostly dominate the BPO industry. Apple, for example, outsources thousands of manufacturing roles to China, Korea, Taiwan and Mongolia.
BPO extends to other industries as well. Accounting, web design and development, finance, marketing, ICT, engineering and architecture are just some of the industries outsourcing is also able to cater to.
Now, the connection from BPO to KPO.
One of the biggest advantages of utilising offshore staff is that it frees up time from process-based activities. This enables onshore staff to focus on core business activity, enabling strong growth and increased momentum.
Mark’s Story
Mark is a founder of a small recruitment firm in Australia, he helps his clients source the best candidates for positions they have available.
Mark is juggling the responsibility as Director with the crucial task of creating a website with a back-end supported database. This development will reduce the in-house workload by almost 80% when job seekers are able to simply submit their resumes via the website instead of directly to Mark’s email.
In addition to the multiple roles Mark is already juggling within the business. He is asked by a potential client (a big one), to deliver a report on the boost in revenue and manpower. They would likely see if they were in fact to partner with Mark’s firm. Unfortunately, with a full plate already Mark wasn’t able to gather all the data he needed for the presentation. He was only able to deliver a simple summary with general statistics.
No surprises, the “Whale” moved on to find another recruitment firm. Mark did get his website up and running but lost another potential client in the process.
SO WHAT IF…
Leveraging his time would have been the game changer for Mark. If Mark had engaged with an offshore developer for his website enhancements he would have had the time to dedicate to creating a comprehensive report that would have landed his biggest client to date. The website would have been designed, developed and monitored by a full stack developer. He would’ve able to do that with reduced rate compared to using a local provider. Mark’s talents would have been focused on business growth rather than task and process-based activity.
And yes this is only an example but is a story we’ve heard time and again from clients who wished they’d only taken the leap into the world of BPO sooner.
Now, let’s talk KPO
Investopedia defined Knowledge Process Outsourcing as “the outsourcing of core, information-related business activities.” In general, KPO is much like BPO, it’s all about contracting out work to another company. However, KPO deals or hands out high or senior-level tasks or positions. They require experienced, senior level staff dedicated to the role or profession.
So, if BPO helps businesses better focus on their core activities, KPO allows business owners to outsource some of their core activities enabling time to focus on growth.
KPO job scopes are extensive and require more attention to source the best employees for these select positions.
Philippines & KPO
The Philippines right now is still a haven for BPO companies to set up shop. But, increasingly more and more businesses are transitioning their entire operation from BPO to a KPO framework.Why? Because they’re realising the immense talent within the workforce available and the potential for growth in the outsourcing arena.