KPO In India

Knowledge Process Outsourcing (KPO) involves the transfer of knowledgeintensive business processes that require significant domain expertise, to other geographic locations. For global corporations looking to move their higher-end research like market research and equity research, analytical based services, engineering design, IPR, legal services, remote education and publishing, India is currently the location of choice. A number of global organizations have opted for the captive KPO route, instead of relying on third-party KPOs, to protect their IPRs and patented material. These include JPMorgan Chase, Merrill Lynch and McKinsey. Several pharmaceutical companies have set up captive drug-discovery centres in India.

The KPO market

The global KPO industry stands at US$ 1.2 billion today. According to the Global Sourcing Now report, this is expected to grow at a CAGR of around 45% and will touch the US$17 billion mark by 2010. India is well positioned to capture 70% of this market, translating to a market size of U$12 billion. The NASSCOM (National Association of Software and Service Companies) estimates the KPO market to grow by gargantuan proportions to US$ 15.5 billion by 2010. The number of Indian KPO professionals is set to leap from 25,000 to 250,000 employees by 2010. Unlike the benchmarked NASSCOM ranking of Top BPOs, there is no listing of the KPO companies. Another impediment is the fact that a number of KPO companies in India shy away from disclosing their revenues. What we have instead is a mixed bag of parameters like revenues, number of em-ployees and market leadership in certain sectors. We have not included big firms like Wipro, Infosys or HCL which have large BPO outfits but whose KPO efforts have been relatively minimal. 1. Genpact: Formerly GECIS, Genpact had revenues of US$ 493 million in 2005. The relatively small KPO unit is a complementary arm to its main BPO business. Genpacts KPO specializes in competitive intelligence, campaign management, program tracking, customer relationship management, customer value mapping, research, database generation, and others. The KPO has staff strength of 1200 people, of which more than 90% has advanced degrees.

2. Evalueserve: Based in Gurgaon, it has 650 people engaged in market research and business intelligence. Nearly 45% of the companys revenues come from math related projects. Evalueserve has a research firm called Global Sourcing Now, which specialises in high-quality research reports. 3. Ugam Solutions: Ugam Solutions entered the area of market research analytics in 2001, much before the term KPO was coined. Their business involves the study of consumer minds, their behaviour and habits, for evolving a basis for business development initiatives of global companies. It has now grown to a 400-member organization. 4. WNS: A Mumbai-based BPO, WNS has just started its KPO division for market research with 300 people. It operates in the knowledge services business segment and offers high-end services such as market, investment and business research. 5. 24/7 Customer: This BPO was listed in the Leaders category of IAOPs (International Association of Outsourcing Professionals) Global 100 list. Its KPO focuses on customer analytics, where it studies consumer behaviour and analyses data pertaining to related activities such as campaigns and marketing activities. 6. ICICI OneSource: Acquiring a US-based research firm, Pipal in 2004, ICICI OneSource offers high-end customised business research and collections, analytics and information services. It had revenues of US$ 42 million in 2003-04. 7. EXL Service: This BPO acquired Inductis, a leading strategy and analytics company serving the financial services and insurance industries, in June 2006 to form an independent subsidiary. Inductis had revenues of US$ 20 million in 2005. The new entity will focus on consulting, research and analytics. 8. Copal Partners: Founded in 2001, Copal Partners provides company and sector research to its clients, which include Wall Street investment banks, hedge funds, private equity firms and private and public corporations. It was formed by professionals from McKinsey & Co., Citigroup, and GE Capital. In 2005, it entered into an agreement with Reuters to provide financial institutions with customized company research and sector analysis. With revenues of US$ 6 million, it plans to expand to 400 employees by the end of 2006. 9. Pangea3: Based in Mumbai, Pangea3 provides services areas such as patent research, analysis and prosecution support; document review, litigation and due diligence; contract drafting management and

administration; legal research and business information research. With an employee strength of 100, its revenues are expected to be US$ 2.5 million this year. 10. TechBooks: This is a leading KPO in publishing and services publishing houses such as Cambridge University Press, Blackwell, Hall, Pearson and Tata Mc-Graw Hill in providing electronic content services and solutions. It plans to get into e-learning services with broad application in the corporate, government and education markets.
What makes India a preferred destination for KPO (Knowledge Process Outsourcing? The Indian workforce is highly literate and they are well-versed with English language, thanks to Indian educational system. Every year India is producing hundreds and thousands of English speaking, trained professionals in the fields of IT, Engineering, Education, Law, Science, Finance, Architecture and other competitive fields. The Indian advantage primarily lies in the educational and technical qualifications of its workforce. A survey conducted in 2002 by NASSCOM (National Association of Software and Service Companies) showed that an Indian ITES-BPO center in banking and financial service sector, performs better than US and UK based BPO centers in various categories like the total number of transaction, total number of correct transactions, total customer satisfaction, number of transaction per hour and the average speed of answers. It has also showed in the survey that 45 percent of Indian KPO service providers have the highest quality certification like Six Sigma (A rigorous and disciplined methodology that utilizes data and statistical analysis to measure and improve a company's operational performance, practices, and systems. Six Sigma identifies and prevents defects in manufacturing and service-related processes.). BPO or KPO in India are getting more quality conscious and they are frequently improving to have standards that of internationally accepted. They are in the process of highly acclaimed quality management standards from International Organization for Standardization (ISO) such as ISO 9002, ISO 9001, ISO 9001:2000, ISO 9001:2001 and from the CMM framework to the new CMMI framework.

Popular KPO (Knowledge Process Outsourcing) Areas The large professional class available in many developing countries like India has created trained workers in all the modern fields of industry and business. These include law, pharmaceuticals, biotechnology, data analysis and management services, financial services, technology research, computer-aided simulation and engineering design, and other professional services. Some of the popular KPO areas are described below. Major companies and firms using KPO Major corporations and business firms are already using KPO services to enhance their business. These include some of the leading blue chip companies of the U.S. Search Engine Optimization (SEO) Our SEO branch, IMTECHCorp.com primarily focuses on search engine marketing business. The Marketing methods we employ are Organic SEO, Direct Site promotions, Affiliate Internet Marketing, PPC Search engines, Site Membership mailings etc... though at the current moment 90% of our promotions are Organic SEO.

Legal Services Writing legal briefs and memos need not mean hiring costly professionals as the same quality documentation can be done with a KPO firm based in India . And the work gets done in pennies. What started out as transcription work in India has now moved on to areas like patents, drafting, legal research, writing software licensing agreements, etc. Accounting Services From simple book keeping to auditing, KPO firms can provide trained professionals who offer cheaper services with standard quality. Journalism and Content Development English speaking trained writers from a KPO firm are good candidates to help newspapers and journals with their editing and copy writing work. This sector has recently seen a good growth with the rise of content development firms. Architectural and Engineering Services A large pool of trained draftsmen can provide expert CAD/CAM services to clients. Other Key KPO Areas The areas of KPO services are as vast as the field of business and industry. These include programming, software development, english language services, content development, web site design and promotion, etc.
Benefits of KPO Standardized technical education is now widely available to all in the developing countries. This trained manpower is also accessible at very low cost as well. It therefore makes sense to utilize their services. Outsourcing to KPO firms can provide the following benefits:

Valuable cost savings that can be utilized elsewhere. Standard operational efficiency. Trained professionals at work. Savings in time and management energy for maintaining in house services. Increase in profits. Option to recruit a larger work force without raising costs.

KPO Skills Defined The following skills form the basis of knowledge-based firms and their workforce.

Analyzing data and information to produce meaningful documents. Researching information from various sources. Converting raw technical data into presentable documents. Use of high levels of conceptualization and theoretical knowledge.

Proficiency with various advanced software and hardware devices. Maintaining workflow, meeting deadlines, and applying quality controls.

What KPO can deliver to you? KPOAsia.com work in close association with the client and provide services that are predefined in terms of quality and standard of work. With a good firm you get the following:

Good quality work. Lower costs. On time delivery of services. Uninterrupted services. Adaptability to changes in required quality.

The growth and future of Knowledge Process Offshoring industry a study by Evalueserve
Saratoga, California, July 16, 2007: An Evalueserve report released today predicts that the Knowledge Process Offshoring world-wide is expected to grow to US $ 16.7 billion in revenue by 2010-2011 implying an annual growth rate of 39 percent and it will employ approximately 350,000 professionals by March 2011. Furthermore, the Knowledge Process Offshoring industry in India is expected to grow to US $11.2 billion in revenue by 2010-2011 and will employ approximately 255,000 professionals by March 2011. The report titled Indias Knowledge Process Outsourcing (KPO) Sector: Origin, Current State, and Future Directions by Alok Aggarwal, Chairman, Evalueserve is an updated version of a similar report done by Evalueserve in July 2004, and analyzes the changes the KPO sector has seen during the last three years and what it is likely to see during the next four. According to Dr. Aggarwal, The main reasons for this huge growth in the KPO sector is the vast pool of educated and experienced professionals in countries like India, China, Russia, Poland, the Philippines, Hungary and many republics from the erstwhile Soviet Union. Evalueserve sees these countries to eventually emerge as strong contenders in the KPO business. In fact, in the near future, KPO is likely to be driven by factors like breadth and depth of coverage, domain expertise, location advantage (e.g., nearshoring and language capabilities), sales and marketing capabilities, data compliance with respect to regulatory standards (especially those defined by the United States, Canada and the European Union) and the management of business risks. Therefore it is quite likely that companies both with their own captives and those using third party vendors may use a hub and spoke model in which a provider in India may constitute the center whereas other units in the world may provide appropriate spokes. According to Evalueserves research, the KPO industry in India had only 9,000 billable professionals in India that generated revenue of US $ 260 million during 2000-01 and this number has already grown to 75,400 by 2006-07. These billable professionals generated US $ 3.05 billion, thereby growing annually at 51 percent in US Dollars and 43 percent in terms of billable professionals over the past six years; this growth is pretty much in line with the predictions that Evalueserve had made in July 2004. The current forecasts by Evalueserve for the KPO industry for the next four years (of $11.2 billion in revenue and employing an average of 255,000 professionals during 2010-11) imply a cumulative annual growth rate of 38 percent in revenue and 36 percent in the number of billable professionals. However, some of the following assumptions have been made while creating these forecasts; if these assumptions do not hold, and in particular, if the attrition is not controlled properly then this growth within the KPO industry may be stymied even further, which may be able to generate no more than US $9.9 billion in revenue (and employ no more than 225, 00 professionals) during 2010-11: The lack of availability of highly educated professionals (e.g., MBAs, Chartered Accountants, Medical Doctors and Architects) in India and other low-wage countries may affect the growth of the KPO sector. Small and Medium Enterprises (SMEs) are likely to be the major growth drivers for the KPO sector.

According to Evalueserve, out of the 10 million SMEs in US and Europe, about 10 percent (i.e., approximately 1 million) can benefit from KPO services due to reduced complexity, ability to compete effectively with small and large competitors, shorter time to market, higher flexibility, overall lower costs and potentially higher quality for the same costs. The appreciation of Indian Rupee especially when compared to the US Dollar is gradually making Indian KPO companies less competitive. Finally, because of attrition and rising costs in India, companies with their captive centers in India are also beginning to outsource some of their work with third party vendors that can provide complementary skills and also handle spikes in the workload. During the next 4-5 years, this trend is likely to accelerate, which would imply that these companies would move from a fixed cost model to a variable cost model and hence start working with several vendors in several low-cost countries and which would also imply that these companies will gradually move from having their captive units to third party vendors providing them these services. The Evalueserve report also delves deeper into a few sub-sectors within the KPO industry that are expected to do well e.g., banking, finance, securities and insurance research; data mining and analytics; and contract research organizations & biotech services and some that are still in a nascent stage, e.g., legal and paralegal support services; remote logistic services and procurement support services; and network optimization & analytics services.