Evalueserve, KPO, Offshoring, Process, Knowledge

Knowledge process offshoring to be worth $17Bn by 2010- Evalueserve

15 Jul 2004 | (Survey)

According to Evalueserve, an international business research firm, the revenue for the global Knowledge Process Offshoring (KPO) market was around USD 1.29 billion in FY 2003 and is expected to grow to USD 17 billion by FY 2010, at a CAGR of 46 percent.

In contrast, the revenue from simple BPO services will grow from USD 7.7 billion in FY 2003 to USD 39.8 billion by FY 2010, at a CAGR of 26 percent.

KPO involves business processes that require domain expertise and high-end talent such as MBAs, engineers, doctors, lawyers, accountants and other highly skilled professionals.

According to Alok Aggarwal, Chairman, Evalueserve, “KPO requires moving away from simply executing standardized processes to carrying out processes that demand advanced analytical and technical skills as well as some decision making.” He added that some of the destinations from where KPO services are being provided include India, China, Russia, Canada, Israel and the Philippines.

Users of KPO services include market research and consulting firms, investment banks and financial services institutions, and corporate planning departments of large companies. These services can also be used by small and medium sized enterprises due to project based nature of the work. Examples of services in the KPO domain include intellectual property research, R&D in pharmaceuticals and biotechnology, data mining, and a range of analytical services such as equity research and financial modeling.

The Evalueserve research report further adds that, given the large number of talent pool in terms qualified professionals, India can provide KPO services worth USD 12 billion by FY 2010 instead of USD 720 million that it provided in FY 2003, representing a CAGR of around 50 percent. Around 250,000 such professionals would be hired by Indian KPO providers by FY 2010, which would provide direct employment worth 300,000 people.

However, the report cautions that, executing KPO projects is not easy and requires a professional services culture rather than a BPO culture. Processes executed within the KPO domain require higher quality standards because the stakes for the clients are high. Furthermore, the clients are likely to have apprehension about the quality of the services delivered especially by low-cost destinations which may be difficult to alleviate.

Nonetheless, the report points out that these factors will not impede the growth of the KPO industry. In fact, the protectionist lobby and their anti-BPO drive in the US and the UK have helped global offshoring and, in particular, global KPO by providing free publicity. Evalueserve estimates show that between June 2002 and May 2004, Indian industry alone received more than USD 89 million in free publicity from more than 1,980 distinct articles in newspapers and magazines and over 210,000 distinct references and ‘threads’ in the US and UK.

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