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Executive Summary

Global KPO market is expected to grow at a Cumulative Annual Growth Rate (CAGR) of 46 per cent to $ 17 billion in 2010. Of this $ 12 billion (70%) would come to India. Although revenues in absolute terms would still be more from BPO (nearly double than KPO) but the
per-capita revenue generation would be much higher in KPO. Further, a KPO requires a higher understanding of how a client works. The contracts in KPO will be shorter than in BPO and would be more stringent on the quality of work delivered. Captive KPOs will, therefore, hold an advantage over third-party KPOs.

But there will be competition from Philippines, Brazil, Russia, Malaysia, Ireland, Czech Republic, Ukraine and China, among others. Together, these countries may try to upset the Indian apple-cart. But, India will continue to be the favored destination for IT offshoring despite rising wages and surging rupee. According to industry experts, emerging destinations like the Philippines, Brazil, Russia and other countries in East Europe do not, at present, pose a threat to India. It will take at least five years for these emerging countries to pip India's position.

The Next Big Thing - KPO

KPO means offshoring of high-end services like research in intellectual property, equity and financial research, analytics and data mining. KPO goes beyond information technology outsourcing ITO and business process outsourcing BPO as it involves more high level, value-added work, such as investment research and prototype development, where the effort is people intensive and the end product is arrived at through rigorous methodologies.

Due to the fact that KPO requires a sophisticated level of judgment, subjective analysis and interpretation, the end result can vary for each client, as opposed to BPO where a similar output is garnered generally each time. Also, unlike BPO, where an entire process is often offshored, KPO entails offshoring part of a larger process such as financial research and analysis, engineering and design services, and pharmaceutical research outsourcing.

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Deepak Bisht is currently working as Senior Business Analyst with MarketRx (a Cognizant company) - one of the leading KPOs based in Gurgaon, India. Prior to this, he worked with HP Analytics, Bangalore, as an Analytics Consultant for one of HP GBUs.