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India Will Continue To Dominate Knowledge Process Outsourcing – KPO

Knowledge Process Outsourcing

When it comes to Knowledge Process Outsourcing (KPO), India is racing ahead of its competitions. Backed by government support and blessed with one of the largest English-speaking technical talent pools in the world, India is where all the KPO action will be concentrated in the years to come.

India holds the number one position as the world’s favorite destination for all kinds of outsourcing.

The KPO is growing at a swift rate, and is poised to overtake the sprawling BPO sector that defined outsourcing in the initial years. The Indian education system is such that each year, on an average, approximately 3 million graduates pass out of its 700 plus universities. These graduates then enroll in different institutions to get professional degrees in their chosen domains – all of which make them hugely attractive potential employees in the eyes of the western world.

The fact that many companies want to offshore to India KPO is evident by the latest figures about the Indian KPO industry. India’s KPO market is forecast to grow by 25-30 per cent annually till 2013 – driven by rising demand for professional services, as per global research firm Gartner.

Unlike the outsourcing of manufacturing or even BPO, KPO typically involves special-value work carried out by highly skilled staff with experience and domain knowledge. KPO firms, in addition to providing expertise in the processes themselves, are often equipped to take many low-level business decisions themselves – particularly those that can be easily undone if they conflict with higher-level business plans of the client.

Domains that fall under KPO typically include website designing, writing and content development, ecommerce, 2D and 3D animation, financial services, and much else.

True, there are other countries with India in the KPO fray such as the Philippines, China, Mexico, and Russia. However, there are many reasons why India, and India alone, can rightly be the hub of all Knowledge Process Outsourcing.

  1. Large technical talent pool – India boasts one of the largest technical talent pools in the world. It has several prestigious Institute of Information Technology and other technical institutes that produce over 75,000 technical graduates each year. A huge percentage of these graduates get snapped up within no time during the campus interviews by international giants who are eager to have Indian brains aboard their teams.
  2. Fluency with the English language –Professional Indians speak, read, and write English with fluency. Here in India, English is taught in schools across the country from the primary classes itself. The accents may vary but the average Indian has a far more secure grasp of the language than his counterpart in, say, China or Vietnam.
  3. Labour cost – Cheap cost of skilled labor is one of the most attractive features of outsourcing to India. This applies to the KPO sector as well. Thanks to the falling telecom rates, even though the labor costs in the Philippines may appear to be lower, the overall picture favors India. Labor is far more cost-prohibitive in countries such as Ireland and Canada, which also handle a small percentage of Knowledge Process Outsourcing work.
  4. Government support – The Indian outsourcing industry as a whole has always enjoyed government support. The successive governments have been encouraging foreign investment in IT, levying no export taxes on them. In addition, stringent laws and upholding of the Intellectual Property Rights Act protects data thefts.
  5. Infrastructure – The Government of India has opened several Software Technology Parks to encourage IT development and IT outsourcing in particular. India has excellent satellite and telecommunication facilities. Apart from the major cities and towns, even small Indian cities boast Internet connectivity.

The KPO in India is burgeoning since it has a high potential and is not restricted to merely Information Technology (IT) or Information Technology Enabled Services (ITES) sectors. Within its ambit fall other sectors such as Legal Processes, Intellectual Property and Patent-Related Services, Engineering Services, Web Development Application, CAD/CAM Applications, Business Research and Analytics, Legal Research, Clinical Research, Publishing, Market Research (Market research KPO), etc.

Few Third World countries can match India when it comes to Knowledge Process Outsourcing.


India is truly where all outsourcing action is. A recent report in one of the leading English dailies in India confirms this: “It’s good news for Indian knowledge process outsourcing (KPO) firms. India is the most attractive destination for KPO activities, says a study by independent research company Asset Management in collaboration with Kelly Services. The study shows India will have a higher growth rate in KPO segment of 45% compared with 25% in the BPO segment. The latter will, however, remain the lead revenue earner and job creator due to the volume nature of this industry.”


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