BPO vs KPO: Finding The Right Fit

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BPO vs KPO
Both BPO and KPO companies can be beneficial in numerous ways to your company if you are considering outsourcing.

When considering an outsourced partner for your company, you might be wondering if a BPO or KPO call center is best for your organization. In this article, we will explore the concepts and identify the differences between the two. 

As you know BPO and KPO are two types of outsourcing often employed, especially when it comes to call center operations.

While BPO call centers handle processes on behalf of a client, KPO call centers are deeply involved in the handling of information, knowledge, or data on behalf of a client company, they are contracted when an organization requires a high level of specialized experience and support.

Here are some of the things you need to know about BPO and KPO call centers.

What is BPO?

Business Process Outsourcing is a branch of outsourcing, which involves contracting out functions, segments, or processes to a third-party service provider.

BPO can be classified into back office and front office outsourcing.

Back office outsourcing:
This includes business processes such as accounting, finance or human resources.

Front office outsourcing:
It involves customer-related services such as contact/call center services.

BPO is a process, an operation that is predetermined. The BPO partner has to guarantee that all procedures will be executed in a consistent and efficient manner, no matter where the company is located.

Types of BPOs

Call Center Outsourcing:
They receive inbound customer calls or make outbound marketing calls.

Data Entry Processing:
They provide online data entry (updating website data, catalogues and databases) and offline data entry (creating documents, spreadsheets and updating data).

Financial BPO Outsourcing:
They provide services like bookkeeping, accounting and financial analysis.

Healthcare BPO Outsourcing:
They are specialized in creating medical transcripts, medical coding and billing.

Engineering BPO Outsourcing:
This type of BPO provides a wide range of services in the civil, structural or mechanical fields.

Benefits of BPO

These are some of the primary benefits your company can acquire when working with a BPO partner.

  • Higher Profit: One of the biggest advantages of outsourcing is the availability of human capital at low wages, which results in big cost reductions.
  • Focus on Core Business: With most minor processes already taken care of, management can actually focus on the core functions of the company.
  • Top notch Technology:  most small and medium-sized businesses cannot afford the latest software and technology required to run a call center smoothly, but the outsourcing companies already have access to the latest technology, so by partnering with them this top notch technology will be at your customer’s disposal too.

 

The Challenges of BPO?

One of the biggest challenges for BPOs is high attrition rate, this is attributed to factors such as lack of career growth and the monotonous nature of the job.

Another challenge is the recent opposition against outsourcing from UK and US labor unions and in order to retain jobs within their countries. This political opposition is a pressing concern for the BPO industry.

What is a KPO?

Knowledge Process Outsourcing is the outsourcing of important business related activities. It is often considered to be an extension of business process outsourcing. KPO takes care of the processes that require a more complex and often a more technologically advanced system to execute them.

KPO providers can be a separate company or a division of the main organization. It can be located locally or outside the country to minimize cost.

KPO often demands advanced technical, analytical and specialized skills from the personnel involved in the process. They are also required to have in-depth knowledge, judgment and be experts in their domain. This is needed to make decisions on specific issues which may arise during the execution of the outsourced processes.

Types of KPOs

These are some of the major areas where KPOs can provide services:

  • Business Research
  • Legal Process Outsourcing
  • Market Research
  • Writing and Content Development
  •  Creative Design
  •  Data Analysis
  • Corporate Training Services
  •  Education and Learning Solutions

 

Benefits of KPO

These are some of the primary benefits that a KPO partner can bring to your company.

  • Access to professional personnel: KPO companies offer a convenient solution to access experience and talented personnel without going through the recruiting and training process of hiring new employees.
  • Lower asset investment: There is a complete reduction of per head desk space and resource requirements, there is also a reduction of the investment in real estate and technology, and KPOs also help you reduce operational expenses.
  • Higher levels of competitiveness: With more internal resources and access to professional personnel that can provide new and fresh ideas, the competitiveness levels of the organization in the market will rise.

The Challenges of KPO?

One of the biggest challenges the KPO industry afronts is acquiring and retaining professionals in the fields of business, finance, management, law, engineering and medicine.

Other challenges include the growing competition coming from countries such as Russia, China, Ireland and Israel that are entering this field of outsourcing, and the constant need to invest in infrastructure and the latest technology to remain on top of the industry.

The differences between BPO and KPO?

  • BPO and KPO are very similar, but there are some distinctive differences between them.
  • BPO is based on a preset process and rules and on the contrary KPO is based on the knowledge, expertise and judgment of the personnel.
  • BPO is simple, is driven by volumes and requires high expertise on the selected process, but KPO is more complex, it requires expertise and knowledge to deal with the insights that may occur during the execution of these processes.
  • BPO companies hire employees that have basic education, strong communication skills and general computer knowledge. KPO companies need employees that are highly skilled and professionally qualified in specific areas of business.
  • The focus of BPOs is on peripheral activities of the organization, but KPO deal with vital business information and high-level processes.
  • Most BPO employees have a monotonous routine and pre-set targets to accomplish, KPO employees need to provide insights, forecast and even report directly to the client.

Both BPO and KPO companies can be beneficial in numerous ways to your company if you are considering outsourcing.

The decision of which you should choose needs to be based on the type of business you have and the specific functions or processes you wish to outsource.  The personnel skills and training required for your processes will be the final factor in your decision between a BPO and KPO.

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