We see how BPO is giving place to a new name i.e. KPO. World economy is opening up. Outsourcing is leveling the playfield in an unprecedented manner. The changing nature of technical work, equal opportunities as a result of globalization, huge talent pools in Asian countries etc, are few reasons of the dynamism.

UK and US still the key players

Many see KPO as the next big thing in the outsourcing industry. Earlier post talks about how KPO is different from BPO. It seems most of the outsourcing is concentrated towards Asian sectors, which is largely due to huge English speaking population in these sectors. KPO can work on the shortcomings of BPO i.e. concentrate on other European and Latin markets and tap these highly potential areas of doing business. Since KPO is more bent on research and engineering solutions, the “cultural” and “linguistic” gaps associated with doing business in respective countries shouldn’t be as huge as compared BPO sector. UK and US markets will continue to be the main contributors in KPO till then.

What can be done?

So what can SME’s and large businesses of India (and Asian for that matter) do to take the next step for realizing the KPO potential? Few actions might include:

• Continuous focus on infrastructure creation 
• Continuous focus on the improvement of skill-sets in the talent pool 
• “Engineering value” brand creation 
• Gaining domain experience by the way of relationships with the experts 
• Leveraging the local industry potential or aligning them with future targets.

If the reports [1] are held in true light, the growth in KPO industry will be relentless in the coming years. Few highlights from the reports:

• Engineering services market to increase to $1.1 trillion by 2020.
• India’s share in the market to increase from 12% to 30%

Are you already considering a change in your outsourcing strategy?

These results will have huge bearing on outsourcing trends. India and the Asian countries will have to look into their plans for incorporating this new avenue. Few trends, which are likely to be seen, are:

• Professionals with diverse work experience will be high on demand 
• SME’s will play huge role as the “critical size” required by the KPO would be very low compared to the BPO’s. 
• We might see a deluge of acquisitions and mergers as companies will collaborate and try to workout a strategy that will help the companies to gain domain expertise, and also allow them to become “multi-service” companies.

Any bottlenecks?

Yes, low employability will be a concern. There’s a feeling that the graduates might not fulfill KPO industry’s demand. Very few graduates want to work in a knowledge space. Well we cannot coerce people to work in an industry. May be such things need to tackled at “ground zero”, where graduates can be made aware of the industry and its prospects.

So is your company ready to take the “B” to “K”?