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Confused Amid BPO and KPO? Understand the Difference with Us!

Posted by Prachi Priya

Outsourcing the business service is not a new thing for the business industry, as companies have leveraged outsourcing for years now. Small businesses that cannot afford to hire and train a team of agents for in-house service performance look for outsourced services from BPO companies. Every company wishes to augment its processes and increase customer satisfaction levels, which is why small startup firms and even some established companies look for a reliable BPO partner.

Outsourcing to a BPO call center, businesses get a team of professionals on-board to handle the outsourced services. Since the call center company has a team of experienced agents available 24X7, thus they provide excellent services. These outsourcing companies will help your firm boost customer satisfaction levels easily.

When we think of outsourcing, it is differentiated in two different types. They are:

  • Business Process Outsourcing (BPO)
  • Knowledge Process Outsourcing (KPO)

Both the outsourcing processes offer a varied range of benefits, however, companies planning to outsource their services always puzzle amid BPO and KPO. Which one is the right one for my organization? This is the most frequently asked question by most of the companies, so we thought to help you out with the same:

Let’s firstly define the two and then explain about BPO vs KPO:

Business Process Outsourcing (BPO)

Business process outsourcing is all about outsourcing the business processes/functions to a third party that is a BPO firm so that the in-house agents are free to take care of the primary responsibilities.

Companies mainly outsource to a third party because they lack the in-house expertise to handle a certain responsibility, which they know that an external partner can handle better.

Companies also outsource because it helps them minimize costs and boosts service efficiency. There are different types of BPOs. Here we pen down the ones you must know about:

  • Offshore BPO

It includes outsourcing the business services to a company located offshore.

  • Nearshore BPO

It includes outsourcing to a BPO call center company in a country nearby.

  • On-shore BPO

In such an outsourcing activity, you outsource your business functions to BPO companies within the same country.

Knowledge Process Outsourcing (KPO)

KPO is the extended version of BPO. The process caters to transferring knowledge and information related to the business to a third party so that the processes are handled well.

The KPO firm can be a company that is the subsidiary of the main company and aims to minimize costs for the firm. KPOs mainly look forward to market research services, data analytics, business research services, legal process outsourcing, etc. So if you want to outsource the same, selecting services from KPO can help you win!

KPO firms look after the outsourcing of high-level tasks that demands expertise on-board to tackle the services.

Here is the difference between BPO and KPO in Points -:

  • BPO stands for Business Process Outsourcing while KPO is Knowledge Process Outsourcing.
  • BPO includes transferring/outsourcing the business functions to an external partner to minimize costs. However, KPO caters to knowledge and information outsourcing to a third-party provider.
  • If we judge comparing the basis, then BPO describes rules, and KPO functions upon judgment.
  • When compared with KPO, BPO has a lower level of complexity when it comes to performance.
  • BPO aims to build expertise in processes to woo the clients' customers and earn fame. However, KPO aims to attain expertise in knowledge.
  • BPO is driven by volume; contrarily KPO is driven by insights.
  • If we talk about collaboration and coordination, BPOs have a low impact than KPO.
  • BPO demands good communication skills and basic computer knowledge for the employees while hiring. However, KPO requires looking for professionals having adequate qualifications.
  • High-level processes that require experienced agents are dealt by KPOs, while low-level processes are focused by BPOs.
  • BPOs depend upon cost factors; however, KPOs consider knowledge factors.
  • BPOs mainly handle tasks like customer support, finance and accounting services, HR resources, etc. Contrarily, KPOs take care of market research, legal services, investment research, etc.

Which outsourcing should you choose?

It is all about a business’s matter of choice in selecting an outsourcing partner. If we talk about the most beneficial one amid BPO and KPO, both have their own perquisites. Choosing one depends on the type of service your business may be looking for. 

If we talk about legal process outsourcing and investment research services, KPO is better. While, technical support outsourcing, help desk, and IT outsourcing, selecting a BPO call center firm would be better.

BPO companies can help you outsource several secondary business functions, so if you wish to outsource a particular service, look for an expert partner having experience in the same field.

Wrapping Up:

Most companies today actively outsource their secondary functions without any fear of data threat. Since firms want to pay attention to the core responsibilities, which is why they consider outsourcing their non-core responsibilities so that an external dedicated partner takes care of the duty.

If we talk about BPO and KPO, companies can choose one depending on the type of service they want to outsource. If you are a company wishing to outsource your legal services, or data analytics services, choose a KPO partner.

Nevertheless, if you wish to outsource your customer support or help desk services, choose BPO companies that have a name in the market.

Thanks for reading!

Tags: BPO

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