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What is Knowledge Process Outsourcing (KPO)? Meaning, Advantages and Disadvantages

October 09, 2021

KPO ( Knowledge Process Outsourcing) is related to outsourcing to third-party service providers. 

KPO is the sub-segment of ( Business Process Outsourcing ) BPO, in which the outsource service provider is rented not only for its capacity to do a particular business process or function but also to implement expertise around it. 

Understanding KPO is the allocation of approximately high-level jobs,  to any outside organization or a different group normally in a different geographic location. KPO ( Knowledge Process Outsourcing ) is a subset of BPO. KPO covers outsourcing of core functions which may or may not give value advantage to the parent company but surely assists in value addition. The processes which are outsourced to KPO are normally more functional and knowledge-based as compared to BPO’s.

KPO: The outsourcing of core information related to business activities that are competitively essential or form an essential part of a company’s value chain is good.

What is KPO?  

KPO is a kind of outsourcing, in which knowledge-related work is provided by workers in different organizations or by subsidiaries of the same organization. Which may be in the same country or in an off-share location to save expense. 
KPO needs superior logical and professional skills as well as a high degree of specialist expertise. KPO provides both core and no core activities. 

Definition KPO ( Knowledge Process Outsourcing ) 

“KPO is the allocation of relatively high-level tasks to an outside organization or a different group within the same organization.”
What is KPO? Meaning, Advantages and Disadvantages

KPO has high-end service. KPO relies on arbitrage. KPO is all about Depth of knowledge, experience, and judgment. KPO is complicated because it needs knowledge expertise and professional workers. KPO focus on high-level process. 

Advantages of KPO ( Knowledge process outsourcing ) 

  • The first advantage of KPO is that cost reduction is possible as clients get professional services at a low price. Save cost
  • The other advantage of KPO is that business organizations can rent experienced employees from KPO service providers. 
  • The other advantage of KPO is that the high-end services are given at a cheaper cost to reduce unemployment and benefit their economy. 
  • Provides versatility in terms of HRM ( Human resource management )  and time management. 
  • Focus on core business function
  • Innovative technology at low cost

Disadvantages of KPO ( knowledge process outsourcing )

  • The first disadvantage of KPO is the security of the organization is questioned.
  • The second disadvantage of KPO is time-consuming and cannot give a quick fix to the company seeking immediate results. 
  • Decline in communication due to language barrier. 
  • The role of the employee and the spirit of the work cannot be guaranteed.
  • Lack of communication between partners due to legal, language, and cultural boundaries can lead to difficulties. 

KPO Examples 

  1. Research and Development (R&D)
  2. Data analysis and interpretation.
  3. Investments
  4. financial consultants
and lot. 
 

 For more information 

FAQ on KPO 
1. What is KPO?
Answer: KPO is a kind of outsourcing, in which knowledge-related work is provided by workers in different organizations or by subsidiaries of the same organization.
2. Why there is a lack of communication in KPO?
Answer: There is a Lack of communication in KPO between partners due to legal, language, and cultural boundaries can lead to difficulties.