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Go4customer Blog

KPOs A Viable Business Model


With rapid advancements in the information technology and new marketing tools, enterprises across the globe are turning to new service delivery models. The traditional BPO outsourcing model is known to bring agility to the businesses by streamlining their backend functions.

However, to compete and sustain in this fast paced business environment, more and more companies are now attempting to unlock the top-line business growth by outsourcing their core functions, which are far beyond the labor arbitrage.

Let’s take a quick glance at how these knowledge intensive units are bridging the widening process gaps within an organization

The maturity and evolution of the BPOs have given birth to a new business model —Knowledge Process Outsourcing (KPO). In a KPO, a company outsources its knowledge-enabled processes to a third party verification service provider to leverage the domain expertise and analytical skills of their employees. This is one of the major reasons, which has altered the traditional business process outsourcing framework to a modern risk management & compliance platform.

According to the industry experts, most of the best offshoring approaches are based on the intellectual arbitrage than extracting financial benefits from labor arbitrage. This paradigm shift is directed towards achieving an optimal allocation of resources; otherwise, organizations may run the risk of shifting their existing inefficiencies internally. Following reasons are mainly driving the success of a knowledge driven landscape:

1. KPO providers are offering end-to-end solution to enterprises with platforms, encompassing low to high complex processes

2. Knowledge-enabled products & services are substituting the traditional BPO and information technology outsourcing (ITO) model

3. The service providers offering KPO solutions are rejuvenating their portfolio via merger & acquisition activities to increase the depth and breadth of their expertise.

Additionally, organizations are compelled to subcontract their knowledge intensive tasks to reliable KPO units due to their easy accessibility to important resources.

Thus, KPOs have proved to be a viable business model and more & more companies are now making a right move by capitalizing the benefits offered by a knowledge process outsourcing unit.

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