To distinguish between KPO and BPO, it would be better to first have a small brief about what these two terms means.
KPO, abbreviation of Knowledge Process Outsourcing, in literal terms means outsourcing a process which requires processing knowledge in one form or another. Supposing your processes cannot be easily automated, in other words, you require people to think and be proactive on your behalf, rather than simply following a checklist of activities? You will need a much more sophisticated firm to help you, one with a highly skilled team of people, acting upon and processing information of all kinds in order to deliver successful outcomes to you. Such a third party firm processing information for creation/formatting and/or dissemination of information for you is known as Knowledge Processing Outsourcing ('KPO').
BPO stands for Business Process Outsourcing,which means getting a business process implemented using the channel of outsourcing. Let's say you are running a business which requires various different processes to be implemented in order to accomplish different tasks crucial to your business model. As your business expands, more and more new processes are introduced - and implementing such processes calls for increased manpower, resources, administration, HR activities etc., adding the burden of both administration and cost to you. An alternative must be found; one which enables you to manage these burdens by outsourcing them to a third-party firm who is equipped to implement the solutions to them (i.e. to manage your processes). This is called Business Process Outsourcing ('BPO').
Knowing the literal meaning anyone would say, If I am a business and have knowledge that needs to be processed it's my business process so what exactly is the difference in these two terms?
The answer is KPO is an advanced from of BPO. To further explain it I will use this example, say there is a company which organizes conferences for various different industry sectors. This business always would want its database of contacts to grow and should be updated for details of contact that might have moved, another thing which this company would want to have as a process i.e. calling the contacts they have in there database to inform about the new events being produced to generate participations.
Now if this business decides to outsource both these process, then the first process will fall under KPO and the second one will fall under BPO. The second one actually does not require any research or special intellect to be implemented it will have a simple checklist with a pitch script. Whereas the first process will fall under KPO because it can not be implemented by following a checklist rather it need intelligence and understanding of the industry to be able to research and verify the details of the contacts.
Following points can be used to distinguish between these two terms:
-a) KPO requires more of intelligence and level of skills, whereas for a BPO it is not mandatory.
b) A checklist can not be the basis of implementing a knowledge based process.
c) New and unpredictable scenarios can occur while implementing a Knowledge based process.
KPO will be the next big boom after BPO and reason for this could be that KPO not just restricts itself to information technology but also looks at other sectors like business research, data acquisition, Clinical research etc.
Future of KPO is bright and in next 5-7 years is will be on higher end then BPO. The KPO regime is all set to accept challenges of high training cost and a much higher attrition rates. But industry is accepting all challenges with the objective to set mark like BPO has done
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