Knowledge Process Outsourcing (KPO): What Is It? Why it is important to your business?


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Outsourcing certain knowledge-based activities can be a great way to improve the efficiency and effectiveness of your business. But what is Knowledge Process Outsourcing (KPO), and why should you consider it for your business? Let’s take a closer look.

What is Knowledge Process Outsourcing (KPO)?

Knowledge process outsourcing (KPO) is the practice of tasking contractors with information-related business activity. These freelance individuals have highly specialized knowledge in a particular area, making them more qualified to understand and apply data collected properly than staff members who are less skilled or knowledgeable about that topic.

Knowledge Process Outsourcing (KPO) is crucial to any business because they help companies meet customer demands, provide operational efficiency and create customized solutions that improve how a company operates. KPOs can reduce design-to-market lead time or provide competitor research for your organization to manage rapidly evolving scenarios.

The information KPOs process is a vital part of the business. It’s centered around data that fuels the brand’s value chain and provides essential operating metrics, which in turn helps create valuable products or services for customers.
Unsurprisingly, businesses often hire more than one outsourced employee or a KPO firm to assist them with this process. The work involved in identifying data points for collection, mining it all together into actionable insights, and making decisions based on those findings can be intense but is considered well worth the investment.


Why is Knowledge Process Outsourcing (KPO) important to businesses?

Optimized Critical Processes

When you implement Knowledge Process Outsourcing (KPO), your business can supercharge its most important processes in critical ways.

If you’re looking to improve your team’s productivity in a specific domain, then an excellent KPO provider will be able to lead them forward. They’ll do all necessary research and provide clear guidance so everyone on board can benefit from what they find out.

Knowledge and Skills Integration

Companies are always looking for ways to improve their business, and one of the best ways they can do that is by bringing in knowledge providers. A KPO provider will come into your organization and create an organizational map of what you know about a particular topic or subject matter, giving both known information and unknown gaps within its team’s abilities.

A third-party provider can specialize and provide specific improvements or fill a gap regarding not having enough talent on staff for particular roles – this includes everything from customer support specialists to marketing professionals.

The third-party specialists will research your company, its competitors, and the market and identify customer service or product quality gaps. They’ll then use this information to create a customized plan for you.

The right KPO provider can help figure out these gaps and fill them effectively so everyone has the best information possible for success.

Flexibility and Agility of the team

When you partner with a KPO provider, your team can become more flexible to changes in their industry. The best providers have the knowledge and resources needed for rapid response times when something does go wrong or if new opportunities arise.

When you onboard a KPO specialist, it’s easier and faster than hiring new employees. As fast-paced as today’s industries are becoming increasingly so, for your company to survive, initiatives need quick implementation; this is where having an experienced team comes into play.

Improved Productivity


When you outsource a process in your company can ultimately allow for more productivity.

Since you’ll have optimized productivity in these core areas, your company will be more successful and efficient. You can focus on the other aspects of running a business while relying heavily upon KPO partners.

Your business is constantly evolving, and your team needs to be too. With BPO providers, you can scale up or down as required, but with KPO service from a dedicated company, you have ongoing support that will help keep the bar raised.

Knowledge Process Outsourcing (KPO) Risks

Less Operational Control

Many risks come with working with a KPO provider, but the biggest one is handing control of your core business function over to another party.

You may feel that you don’t know what direction to turn in, which can lead to even more significant risks for your company. That’s why ensuring that your provider has the experience and expertise in knowledge-related processes. It would help if you had a trusted partner who could guide you through all aspects of these critical areas, from strategy development to day-to-day execution.

Data Securities Arising Issues


Third-party organizations have access to your company’s data and knowledge, which is always risky.

You must trust that your KPO providers will keep the data secure and updated on regulations whenever required. In some cases, their failure can lead to legal problems or other troubles for business!

The security of your data is always at risk when you send or receive information through a third party. That’s why it pays to know who has access, what they can do with it, and how trustworthy they are.

Communication Issues

You will need to be aware of the communication barriers between your business and its service providers when working with KPOs. If a report or suggestion comes through unclearly, for example, if they don’t keep other stakeholders in the loop, it can result in lost productivity on behalf of your team members.

These barriers include:

  • Geographical barriers: different time zones and operational hours
  • Cultural barriers: miscommunications and misunderstood messaging
  • Language barriers: relate to both culture and subject matter expertise

Employee and Consumer Negative Perception

When you outsource your core knowledge processes, it is important to remember that there may be some backlash from employees and audiences.

Your employees will not feel valued if you warehouse their tasks to outside contractors instead of investing in professional development. On top of that, they could interpret this as a sign that the company plans on laying off them.

Your customers may also feel the effects of decisions made by your KPO providers. Even objectively positive changes can throw off an audience if not communicated well enough.

Your company’s reputation is on the line when choosing a KPO partner. It would be best if you had someone who can deliver high-quality service, but it should also be somebody you trust and are comfortable working with so that your audience will too.

BPO and KPO: Are there any differences?

Overall Purpose/ Reasons

Implementing Business Process Outsourcing (BPO) can be a great way to streamline tasks while maintaining the operational status quo. The main goal of this type is simply spending less time, money, and other resources on doing so – enabling teams to make more big-picture improvements over the long term through short-term gains that may not seem significant at first glance.

Knowledge Process Outsourcing (KPO) is about evolving your processes and allowing the business to reach the next level in a specific area. Instead of aiming for less, those implementing KPO are genuinely looking at doing more – making drastic changes to current operations.

Scope of Work


Knowledge Process Outsourcing focuses on a few core functions, while BPO companies have far-reaching operations covering many aspects of the business.

The BPO industry is a significant player in the business, focusing on essential tasks necessary for any company to function. Many different types of businesses can use such as call center services, because it offers cost-effective ways some jobs would otherwise have been handled internally without needing additional staff members.

When you’re a company specializing in productivity, it’s essential to pay attention to the surface-level tasks of BPO. That is why KPO has focused so much on these core functions and made significant improvementswith an eye towards differentiation for your business.

Level of Autonomy

This is because the focus of BPO providers lies mainly on low-level, rote tasks which they must follow rigidly. While these companies may make some minor tweaks to their workflow for efficiency purposes (but no significant changes), it’ll always stay within what’s instructed by your employer.

When given autonomy, KPO providers can use their knowledge and expertise to make purposeful improvements. This means going all-in for a company when they provide these professionals freedom of action by allowing them to complete ownership over processes with authority on how they should be changed or improved upon if necessary.

Relationships between clients and service provider

BPO provider relationships are more low-touch, with engagements focused on surface-level actions and tasks. Communications will usually occur when needed — both parties assuming everything’s going well unless notified otherwise.

The KPO provider relationships are much more hands-on and involved. These third parties will be fully integrated into your organization, so continuous communication is key to maintaining alignment with their direction for the long term.

Who manages KPO?

Knowledge Process Outsourcing can be a great way for vendors, business operations managers, and management consultants to manage the knowledge processes in their company.


The biggest challenge for this team is aligning internal and external stakeholders. This business process management often starts with the ground up, though it can also build upon experience from other projects related to data-related workflows.

It’s important to find KPO firms focusing on understanding the domain and objectives. These companies will provide knowledgeable workers to help your company succeed in its mission.

Knowledge Process Outsourcing management is an essential part of any company’s success. This means vendor managers will ensure that communication with their counterpart companies is substantial. Hence, it becomes easier to coordinate efforts and align KPO partners more closely than ever before to achieve maximum efficiency.

When do you need to outsource Knowledge Processing?

  • A lack of specialization. It’s also possible they are missing someone who has experience in this area or don’t have enough qualified members on hand to complete such an important task, especially when you consider how much time goes into training new employees.
  • A lack of employees. It can make it difficult for businesses in any industry. But bootstrapped startups struggle most with this challenge because they don’t have as much money or resources.
  • A lack of resources. Temporary employees and partners have an easier time getting hired than salaried team members because they do not need as much training, their hours can be tailored to suit your needs without impacting business operations too greatly (they’re more flexible), there’s significantly less paperwork involved with hiring them which saves you valuable time during office days.

If you’re looking for a cheaper option than in-house, then KPO firms are perfect. Not only do they have lower prices, but also there’s no risk because these companies only come on board during projects and, once complete, will leave your company forever.

Types of KPO that support high level of quality management

Knowledge Process Outsourcing services are broadly classified into four kinds of services:

  • Data Analytics and Insights: Data analytics is a powerful tool for gaining insight into the data that underlies your business operations. This allows you to take action on what needs improving and make more informed decisions about how things are going. It empowers organizations with actionable insights across industries and domains.
  • Market Research/ Business Research: Providing research services and strategy consulting for accurate answers to your most pressing business questions.
  • Global Reporting and Performance Management: Providing efficient reporting and performance measurement across industries to achieve operational excellence through data analytics. This helps your company produce more with less, ultimately increasing productivity.
  • Data Management: Data management is a necessary component of any organization. The right solutions can help you streamline your data integration, storage, and retrieval processes while sharing it with the appropriate parties for robust business reporting requirements – allowing organizations to make informed decisions that improve performance in day-to-day operations.

The scope of Knowledge Process Outsourcing includes preparation of accounts, tax returns, computer aided simulation, engineering design and development, financial services, etc.

Top Knowledge Process Outsourcing companies provide a wide range of services including data security, industry experts and quality management. They offer top-notch experiences that will meet your needs.

Best practices for KPO

Enhance your Knowledge Management Processes

You need a cohesive and comprehensive Knowledge Process Outsourcing strategy that uses the software to get the most out of your knowledge management relationships.


The document management software provides easy access to your outsourcing contracts, service level agreements, and other related documentation. This allows the necessary paperwork to be delivered when forming new deals and gives all stakeholders ample time to use them throughout their tenure.

Knowledge-based software is an excellent way to house your team’s current processes and performance data documentation. This will give KPO partners insight into what works within the organization, giving them a clear direction to proceed with future projects involving this client or company.

Implementing a knowledge base will allow your company to better share documentation regarding its mission, vision, and values. This helps KPO providers stay focused on what’s “true north” for you as they make specific improvements that contribute to success in operations.

Make sure that outsourcing is beneficial to your business

You need to define your reasoning for wanting to outsource in the first place. There are some factors to consider when nailing this down:

  • Business’ current performance as compared to the goals
  • Capacity to make the necessary changes without outside assistance
  • Whether outsourcing more surface-level tasks would better enable the team

Make sure you know the difference between outsourcing and Internal Improvements. Often, companies will outsource high-level processes without realizing they are losing growth opportunities within their business model. This move can ultimately lead them astray from achieving goals set forth by management or owners alike.

Set the right priority of outsourced tasks

If you’re unsure which areas to outsource, look at your current situation. If it’s the money-losing parts of your business that are most important or where there is high potential growth in other aspects, then prioritize those over others until things improve.

You can outsource different tasks in multiple domains at the same time, but it’s recommended that you do not try to scale up until your team is ready aggressively. A slow rollout will help with consistency and ensure the quality control necessary when working on such an important project as automation.

Even when your team has been outsourced for specific projects, there will still be work and responsibilities you can take on yourself. This allows companies that outsource certain core functions or tasks within their business model while also allowing them to be equipped with additional skillsets should they need them to meet future challenges head-on.

Choose the right KPO consultant or service provider

You’ll start assessing potential KPO service providers for each assignment, ensuring they can meet your needs and theirs.

The key factors to consider are the providers:

  • Expertise and Services Offered: You need a reliable KPO provider who can offer specific services and possess the know-how required to navigate data-heavy processes. Their efforts will be an invaluable asset for your business, but you should make sure they are qualified in what they say by checking with others first before committing.
  • Operational Frameworks & Processes, and Resources Used: Your KPO provider’s processes should be above board for legal and regulatory purposes. Their research-backed techniques will help you get the most out of your time while staying in compliance with all appropriate regulations so that they can provide superior service to their customers.
  • Performance History and Reputation: When finding a KPO provider, looking for one with extensive experience and success working with companies like yours is important. You also want the chosen candidate’s services to be tailored towards meeting your needs as they grow over time so you can rely on them long-term.
  • Costs and Contractual Terms: When you outsource a high-level process, the benefits outweigh any costs. Your provider should be able to offer terms that align with your long-term goals and provide flexibility for efficiently achieving them.

Decide on involving terms and KPO Relationships Management

Starting on a solid footing is the key to getting the most out of your KPO provider. Here are some tips for establishing that relationship and keeping things moving forward efficiently.

Before starting the relationship, you need to align your team and provider on terms of operation, so they work together in harmony.

You’ll define:

  • Terms for data governance and risk management
  • Terms for cross-team communication
  • Processes for storing, transferring, and accessing organizational data and knowledge

Managing your relationships with your KPO providers will then involve:

  • Tracking domain-specific performance and overall business performance
  • Improving communication and collaborative efforts and better enabling the provider
  • Ramping up and dialing back KPO provider relationships as needed

You should consider your KPO partners to be part of the team. They need access and involvement at all times, just like any other member, so you must keep them informed about what’s happening in every aspect of production from start to finish.

Sustain your Change Management and Knowledge Management

Your KPO providers are in the process of implementing changes to your organization’s operations, and you need to be ready for what is coming next.

Preparing your team members for procedural changes requires:

  • Informing them of the changes to be made in full well ahead of time
  • Explaining the rationale behind the changes — especially as it pertains to them
  • Collaboratively creating a plan for a seamless and productive transition

Your knowledge is your most valuable asset, so it’s vital to ensure your KPO providers document and store all of that research. That is, it should also be stored within your organization’s knowledge base. This will minimize risk on both ends and enable you to use findings from providers now or in the future if they eventually part ways with the company itself.

With years of experience working for large corporations in the United States, Innovature BPO can provide you with high-customized, boutique outsourcing solutions that are quite relevant to Knowledge Processes, etc. Financial Services, Data Management… Contact us for further consulting.

Knowledge Process Outsourcing is a valuable resource for businesses because it allows them to focus on their core competencies and outsource non-core processes. Companies can save money, improve efficiency, and increase productivity by outsourcing these processes. If you’re looking for a way to improve your business, consider Knowledge Process Outsourcing. It may be the solution you’ve been searching for.

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