Most executive- and agent-level employees working in the BPO sector might not be very familiar with the term ‘KPO’. And while many entrepreneurs from fresh startups may have an idea about it, the proper implementation of knowledge process outsourcing may still be elusive.
So, with that notion, it is important for us to draw a clear line of distinction between the two and when and how to implement either of them based on the requirement. And even though it is easy for startups to outsource to a BPO company in the Philippines or any other country, KPOs require a little more research and knowledge of your business goals.
With that said, let’s talk in-depth about the various aspects of the BPO and KPO industries and how they differ from each other.
What is BPO?
The availability of information about the BPO industry is abundant. BPO generally refers to outsourcing non-primary processes of any business. Outsourcing businesses are hired to take care of specific processes that play second fiddle to the core operation.
For example, eCommerce businesses outsource their customer support, complaint handling, return and refund processes, etc. However, the core process for the eCommerce industry is to manufacture or source products and sell them on digital platforms. So, the customer communication process is the second operation for them.
What is KPO?
KPO, or knowledge process outsourcing, is a part of the larger BPO group. However, it generally refers to value addition. Through KPO, businesses can outsource their core functions, though it may or may not have any cost-benefit.
Knowledge process outsourcing is a more expert-based operation. So, the agents hired to fulfill such roles are highly skilled with industry knowledge in the specific division in order to provide the best solutions.
To elaborate, KPO requires in-depth knowledge of the expertise, analytical skills, and expertise. It is definitely a more specialized wing of the BPO industry with such requirements. An agent working in a KPO may need to carry out tasks like market and research, business research activities, and data analytics.
Here is some trivia. Just the way KPO is a subset of BPO, LPO (legal process outsourcing) is a subset of KPO.
BPO vs. KPO: The Difference
Let’s start off this section with a standard distinction line:
“Every KPO company is a BPO, but every BPO company is not a KPO.”
- The first and foremost difference between any global or regional-based, like Cebu call center services, and a KPO is the outsourcing peripheral. At the same time, BPO is more focused on streamlining the secondary process. The main aim behind this is to boost the efficiency of such operations while also minimizing the costs. On the other hand, knowledge process outsourcing is all about outsourcing information and knowledge process to any third-party service provider.
- The most common processes that are outsourced to a BPO are HR, customer support, pre-sale support, data entry, etc. On the other hand, since the KPO industry is a more expertise-oriented operations outsourcing, the service portfolio includes analytics, research support, legal support, etc.
- Another very important distinction between BPO and KPO is that the former is driven by rules that have already been established. Therefore, the agents have to perform on a specific track. However, the KPO industry works on a completely different philosophy. It is more of an open track for the experts and can be molded based on their expertise and sound judgment.
- Every time a BPO company in the Philippines, or India, hires agents, the eligibility for the candidates isn’t very strict. The agents should have good communication, empathy, and a sense of dedication to work. However, hiring experts for the KPO businesses means the potential applicants should have specific and high qualifications and in-depth expertise.
- BPO operations are mostly volume-driven. A number of calls, customers, satisfaction rate, etc., are some of the most important parameters that drive a BPO. However, the KPO industry does not follow this pattern. Instead, they are mostly insights-driven, especially with market research.
Finishing Up
The BPO and KPO industries are poles apart from each other, though the latter is a part of the former. And since the KPO industry is expertise and quality-focused, it is not as widely used or outsourced. On the other hand, a majority of the sectors use the services of a BPO, like eCommerce, banking and financial services, and even telecom and utility.
So, unless your business needs specialized market research services, you are better off outsourcing your business operations to a BPO company. The kind of value they add to your business with efficiency and cost-cutting is irreplaceable
