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Commerce · Ch 16 — Emerging Service Business in India

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

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

Business Process Outsourcing (BPO) is the contracting out of a specific business process — a defined, often repetitive, function — to an external service provider instead of performing it in-house. BPO is commonly divided into voice-based BPO (for example, inbound/outbound call centres handling customer support, telemarketing or technical helpdesks) and non-voice/back-office BPO (data entry, payroll processing, document management, transcription).

Knowledge Process Outsourcing (KPO) goes a step further: it involves outsourcing processes that demand specialised domain knowledge, analytical ability and judgment, rather than routine, rule-based execution. Typical KPO work includes equity and financial research, legal process outsourcing (contract review, legal research), intellectual-property and patent research, engineering and product-design services, and medical transcription combined with clinical data analytics. Because KPO work requires trained professionals — chartered accountants, lawyers, engineers, doctors — who exercise judgment, it commands higher value per employee than routine BPO work. …

Definition 1Business Process Outsourcing (BPO)

Contracting out a defined, often routine business process — voice-based (e.g. call centres) or non-voice (e.g. data entry, payroll) — to a thi …

Definition 2Knowledge Process Outsourcing (KPO)

Contracting out processes that require specialised domain knowledge, analysis and professional judgment (e.g. equity research, legal process outsourcing, engineering design), as distinct from th …