Knowledge Process Outsourcing (KPO) involves the transfer of knowledge

intensive 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.

For years now there has been a myth doing the rounds that Indian companies can only shell out
“software techies”. But this myth of course has now shattered. People are now opening up to the
reality – which is, Indian companies are capable of doing almost anything! India has a large
knowledge pool, which is filled to the brim with talented and experienced knowledge workers
from various sectors like Medicine, Pharmacy, Biotechnology, Engineering, Law, Paralegal
Content, Education & Training, Analytics, Research & Development, Design & Animation, and
even Intelligence services.

This talent is now being tapped into by many of the leading International business firms from all
over the world, which has resulted in the outsourcing of high-end business processes to low-
wage destinations
. Thus, Knowledge Process Outsourcing is the act of offshoring knowledge intensive processes
to low wage destinations with specialized domain expertise.

The Future of the Indian KPO Industry

Surveys have shown that the global KPO industry is expected to reach nearly 17 billion dollars
by the end of 2010, of which approximately 12 billion dollars worth of business will be
outsourced to India. What’s more, the Indian KPO industry is expected to employ an added
figure of roughly 250,000 KPO professionals by the end of 2010, as compared to the current
estimated figure of 25,000 employees. Predictions have been made that India will acquire nearly
70 percent of the KPO outsourcing sector. Apart from India, other countries like China, Russia,
Ireland, Israel and the Czech Republic are also expected to join the KPO industry.

In the last couple of years, more than 30 separate KPO firms have burgeoned in India. Every
year, there are additions of at least 2-5 new KPO firms to this figure. Most of these KPO firms
get knowledge intensive work from leading industries in the United States, Europe and Japan.
Most of these KPO firms have gained in reputation because of the unique services that they
provide and because of the unparalleled quality that they have to offer.

What with the need for high-end service projects increasing daily, the KPO industry in India is
still in its early stages and in the future we expect to see many more KPO firms in India. The
level of competency will increase, in order to attract and retain clients. But there definitely is a
bright future for the KPO industry in India.
The kind of job it entails
content development
market research
equity research
data research
database creation
analytical services
financial modeling
design and development in industries
remote education
publishing and legal support

How it can make India a global player

Large talent pools and favorable government policies together make
India the most conducive environment for KPO
Several global players such as McKinsey, Reuters, Harris Interactive
and Ipsos among others are already investing in India.

As with the BPO sector, India is cost-effective and provides a vast

intellectual talent with expertise in areas such as research and
analysis.

These companies outsource their processes to India for:

Cost savings
Operational efficiencies
Access to highly skilled workforce
Improved quality
1. Genpact: revenues of US$ 493 million in 2005. The relatively small KPO unit is a
complementary arm to its main BPO business. Genpact’s 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.

Evalueserve: Based in Gurgaon, it has 650 people engaged in market research and business
intelligence. Nearly 45% of the company’s 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 IAOP’s (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.

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.