I have been asked several times to explain the difference between Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO), probably because I use the terms freely and KPO has emerged as a solid service option amongst global offshore outsourcing firms.
KPO could be considered as a subset of BPO since they both pertain to outsourcing business processes. Yet there are significant differences between BPO and KPO, typically in the areas of client motivation, type of process, skill requirements and work characteristics. I have attempted to capture the differences in the table below:
|Unit cost reductions
Focus on core business
Time to value/ability to scale
Reduce time to market
|Skills and work characteristics||Entry level to semi skilled
Collaboration – low/medium
Coordination – low/medium
|Professional or domain expert
Collaboration – high
Coordination – high
|Common processes (sample)||Accounting/bookkeeping
Medical appointment setting
Medical claim management
Clearly, these are generalizations and there can be many exceptions. In fact, at times positions can be a blend of Business Process Outsourcing and Knowledge Process Outsourcing. But I think, in many cases, these descriptions are directionally correct.
I hope this provides some clarity around the differences between these two forms of outsourcing and would welcome upgrades and comments.