Top 8 Most Commonly Asked Questions About Knowledge Process Outsourcing

Published: March 22, 2023
A hand holding a pen pointing to the words, knowledge process outsourcing.

In today’s increasingly digitized business environment, data analysis, research and development, and other highly specialized functions are crucial to an organization’s growth and success. However, enterprises may need help finding qualified talents with the necessary knowledge and expertise to perform these niche tasks.

Many companies have turned to knowledge process outsourcing (KPO) for assistance to stay ahead of the curve and fill critical labor gaps. The global KPO market is growing at an incredible rate, with industry analysts predicting that it will be valued at $156.5 billion by 2027, almost thrice the value of its current market. These numbers illustrate how in-demand KPO services are in the current business landscape.

If you’ve always been curious about knowledge process outsourcing, read on to learn more about it. This article will discuss the ins and outs of KPO, including how it differs from BPO and what services are offered by KPO companies. 

We’ll also answer other pressing questions about this fast-growing industry. Let’s dive in!

Top 8 Questions (and Answers) About Knowledge Process Outsourcing

1. What is Knowledge Process Outsourcing?

Knowledge process outsourcing, or KPO, is delegating knowledge-intensive processes to highly qualified experts through a third-party provider. Businesses contract out complex tasks that typically require niche expertise and advanced degrees or certifications. Furthermore, it entails outsourcing business processes centering on research, interpretation, and complex data organization.

2. What does a KPO company do?

Imagine that your organization needs a research and development team to aid you in your brand innovation goals. You may also require a data scientist to help you make better, more data-driven business decisions. What do you do when your in-house team needs more expertise to take on these responsibilities?

This is where knowledge process outsourcing companies can come in. By hiring KPO providers, businesses can more easily access specialized knowledge and expertise to fill any skills shortages in their organization.

3. What is the difference between Business Process Outsourcing (BPO) and KPO?

Difference between BPO & KPO chart

Business process outsourcing, or BPO, refers to outsourcing non-core, support, or administrative tasks. KPO is a subset of BPO that focuses on highly skilled work requiring advanced technical and analytical skills. 

Some examples of BPO services include creating processes such as customer support, recruitment process outsourcing, back-office services, healthcare services, and other non-specialized tasks. Meanwhile, KPO providers make custom processes depending on your particular issues and deal with highly complex solutions such as data analytics, financial consulting, and more.

Both processes, however, can be outsourced from a call center in the Philippines

Read More: Knowledge Process Outsourcing vs. Business Process Outsourcing: Which Solution Works Best for Your Business?

4. What are the different types of KPO services?

Different Types of KPO Services

Data Analytics and Management

Data science outsourcing refers to hiring a third-party company to generate, manage and analyze data. It equips businesses with the expertise needed to transform business data into actionable insights. This KPO solution may include data collection, cleaning, and interpretation.

Financial Consulting

KPO companies provide financial consultancy services to guide clients through situations that require financial know-how and expertise with the overall aim of helping them achieve their business goals. Financial consultants assess an organization’s financial position, explain investment strategies to business leaders, and address any of their clients’ pressing financial concerns.

Research and Development

Research Process Outsourcing (RPO) is another form of KPO where companies contract out all or part of their research and analysis functions to service providers. Outsourcing research services allows businesses to access the expertise and resources necessary for intensive research and analysis.

Management Consulting

KPO providers offer management consulting solutions to provide expert advice that helps businesses solve complex problems and achieve growth. Management consultants often guide leaders with their business strategy and finance.

5. Why should I utilize KPO?

In 2022, “The Great Resignation” shows no signs of slowing down. One of the most extensive surveys of the global workforce revealed that one in five workers would quit their jobs this year. In the U.S. alone, 47 million people left their jobs last year. 

At a time when market conditions are constantly shifting, companies must future-proof their operations, especially when their necessary job functions are highly specialized and complex. Through knowledge process outsourcing, businesses can adapt to change quickly and easily, scaling up operations when demand is high or downsizing during economic recessions.

6. What are the advantages of KPO?

Niche Skills and Expertise

Many businesses need help finding qualified talents with the expertise and skills required for highly specialized jobs. With knowledge process outsourcing, companies can access and work with highly trained professionals with advanced competencies in various fields without going through the lengthy process of hiring and training in-house employees.

Cost-Effective Solutions 

Compared to the expensive and time-consuming process of hiring and training in-house employees, knowledge process outsourcing has a significant comparative cost advantage. KPO companies are strategic partners that drive critical savings, which you can put toward your business growth.

Innovative Technology

Another advantage of KPO is gaining access to top-of-the-line technologies otherwise unavailable. The ideal KPO provider combines cutting-edge technology with top-tier talents to help your business grow in the modern knowledge-intensive business landscape.


In addition to providing access to niche experts and advanced technologies, knowledge process outsourcing helps companies become more flexible, allowing them to scale up or down according to industry demands. For instance, it can cut down staffing amid economic disruptions and seamlessly scale back up once the economy recovers.

7. Where is the best place to outsource KPO solutions?

The Philippines can be your ideal outsourcing destination if you’re looking to hire an offshore provider. Known as the BPO Capital of the World, the Philippines is also a leader in knowledge process outsourcing. 

From its humble beginnings in contact center services and back office support, the country is now considered a top destination for niche services such as data science and data engineering. In its 2021 Global Services Location Index, A.T. Kearney ranked the Philippines ninth in digital resonance, a significant factor in choosing outsourcing destinations. 

8. What’s the ultimate advantage of opting for KPO in the Philippines?

While there may be a multitude of reasons why companies are turning to the Philippines for niche skills, the country’s ultimate advantage is its deep pool of skilled talent. The Philippines boasts a massive pool of degree holders, with countless graduates entering the workforce each year. 

The country consistently ranks among the top offshoring destinations for the following reasons:  

  • High literacy and English proficiency
  • Highly-skilled talent pool
  • Cultural rapport with Western countries
  • Strong economic policies

Read More: From Specialty Outsourcing to Omnichannel Customer Support, How Does Outsourcing to the Philippines Look Like Today?

How to Get the Best Out of KPO Services

KPO services Infographics

One major misconception about KPO is that lower rates are the way to go when outsourcing specialists. The reason for this decision is to save their expenditures. But guess what? Cheap is not always good. What matters the most is the value you extract from the KPO experts.

Invest in specialists who bring value to your company. And that brings you to your next challenge: hiring specialists who are experienced and highly skilled in the knowledge processes field. Yes, you might need to break the bank—but if you collaborate with the right KPO firms, you’ll eventually hit the jackpot.

Here is how you could capitalize on KPO services for your business operations:

Leverage and Develop Critical Processes

One of the advantages of incorporating KPO into your firm is the ability to evaluate your business’s most essential processes analytically. Again, one of the core functions of KPO is to help you crack the code of what you need to prioritize for your company to progress. 

And in some instances, the KPO will conduct the backend study to frame clear guidance on what your team needs to do. With this, your company’s productivity will improve—so you can focus on doing tasks that matter more to your firm.

Create Business Relationships

Your company must form a strategic relationship with a KPO service provider. Also, it would be more beneficial if you could foster long-term partnerships with them. Long-term KPO collaborations could help you structure a direct yet intelligible assessment of your company’s long-term plans.

Resolve Internal Issues

With their specialized knowledge, KPO providers can make specific enhancements to your internal processes to streamline operations. For that reason, they’re filling in the gap in knowledge within your organization.

The improvement continues beyond there. KPO providers can diagnose the issues within your company, conduct market research to understand your consumers, and then compare you with your competitors. And just like that, you’d be more equipped with better strategies that could steer your enterprise toward improvement.

Learn From the KPO Specialists

When you gain access to reliable and competitive KPO providers, your company tends to respond and adapt quickly to new but needed changes—whether it be your workplace culture, technical skills, or any other knowledge-based processes.

Onboarding a KPO member is more convenient and less time-consuming than acquiring new in-house talents. But, when you hire those specialists for your company, you naturally instill knowledge in them. Over time, you’d use the ability yourself to develop your employee’s capacity and confidence in managing your enterprise.

Challenges of Working with a KPO provider

Key Challenges in Collaborating with KPO Service Providers

In every seed of good, there is always a downside. In other words, there are certain obstacles that entrepreneurs must be mindful of whenever they make a business decision.

As a business owner, you need to expect specific challenges. After all, it’s the stepping stone toward having a smooth-sailing business operation.

Data Sharing

Your company’s data and knowledge are your lifelines—once jeopardized, your firm will be vulnerable to external and unwanted threats and attacks. That’s why you might feel that providing access to a third-party organization is risky.

As humans, we all believe that trust is earned. So, for us to give up our bread and butter to another firm is already a challenge in and of itself. Given that, we must outsource service providers that are trustworthy and known to keep sensitive and confidential data as secure as possible.

Giving Up Control

Partnering up with a KPO service provider means allowing them to manage your business’s core activities— a huge risk to take.

There’s a reason why we need to choose quality over cost when it comes to collaborating with a KPO. Selecting the wrong service provider can easily break your enterprise. Always be sure about their performance history or reputation. When in doubt, ask for references or work samples. This could help you take a brief look at how they do their job.

Communication Barriers

Concerns in communications can occur if there’s a misunderstanding between what you hope to achieve from the KPO vendor and the completed output. And several factors lead to the misinterpretation:

  • Geographical hindrances due to the time differences and contrasting work hours
  • Cultural limitations causing miscommunications and misconstruing of instructions
  • Ineffective communication due to language barriers

To tackle this, you should have a short project with them. See if both sides could understand each other’s ways of communicating. On top of that, it’s wise to establish a standard communication pattern to ensure the actual project’s productivity.

Employee Spirit

Your in-house employees may express concern about outsourcing help for knowledge processes. They may perceive you asking for help from a third-party firm as a dismissal of and affront to their professional development.

To prevent this misunderstanding, you need to notify them of the changes to be made ahead of time. Then, explain the reasons behind the changes, especially if these involve them. Lastly, include them in discussions to ensure a smooth and productive transition.

Why Outsource With a Reliable KPO Service Provider

You must seek service providers that approach knowledge process outsourcing flexibly and sustainably. The team must also understand that businesses need agility in this changing business landscape. 

Through scalable KPO solutions, your business can leverage high-level industry knowledge, speed, and data-driven strategies to maximize your growth potential and achieve stability amid constant industry interruptions.

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