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BPO vs. KPO

Over the years, we have seen how outsourcing creeps inside every industry, company, and multinational firm worldwide. This is plausible, considering how outsourcing enables companies to save costs and focus more on core business functions. Since the 1980s, when it became mainstream, the global outsourcing sector has seen a rapid rise and developed into a stable economy. Between 2000 and 2019, the global outsourcing market value has grown from $45.6 trillion to $92.5 trillion. To this end, Business process outsourcing (BPO) and knowledge process outsourcing (KPO) took precedence as the main outsourcing models.


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To start with, KPO is a niche industry that deals with how knowledge-based services are outsourced. Similarly, BPO is an all-encompassing ecosystem that deals with outsourcing Non-core business activities to third parties. Understanding what these outsourcing models entail is essential for every business person. On this note, this article explores the key features of BPO and KPO outsourcing models. 

Features of Business Process Outsourcing (BPO) 

Business Process Outsourcing can be categorized as outsourcing non-core business functions to a third party. From its inception, BPO was first designed to cater to themanufacturing industry's unending process cycle. In recent years, a series of emerging BPO companies have brought up arrays of services for various business processes. This ingenious step has boosted the global market value of BPO, standing at $350 billion in 2023. Market analysis shows an expected annual growth rate of 6.48 % between 2023 and 2027, representing a $450 billion increase. Business process outsourcing company offers a level playground to all businesses. This culminates in creating different categories that cater to various geographical locations. 

  • Nearshore Outsourcing: This category of outsourcing outlines the process of outsourcing most of your non-core business processes to a BPO service provider based in neighbouring countries. 
  • Onshore Outsourcing: Outsourcing comes into play when a business outsources to a BPO service provider in the same country. One example is when a US company outsource some of its business operations to another company in the United state. 
  • Offshore Outsourcing: Offshore outsourcing happens when a company or organization delegates part of its functions to a business process outsourcing service provider in a faraway country—for instance, the outsourcing of Apple phone coupling to a Chinese firm. 

Examples of Services Provided by Business Process Outsourcing. 


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There is an inexhaustible list of services rendered by business process outsourcing. The growing influences of various non-core business operations necessary for business growth and goal attainment spearheaded this. The following are the significant services business process outsourcing specializes in. 

1. Finance and Accounting

You can outsource this arm of your business to a competent BPO service provider to handle your company's general accounting, auditing, billing, and accounts payable. 

2. IT and Software Operations 

The type of business operation outsourcing service provider we have now is competent enough to manage your company's entire IT and software operation. Examples of services BPO can render for you include technical support, IT help desk, software development and testing, quality assurance, software product management, etc. 

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3. Back Office Transaction

The back office is an essential component of every business operation. This is an example of a non-core function you can outsource to a reputable BPO service provider. Examples of back office transactions include receivables, procurement, transportation, logistics credit and debit card processing, etc 

4. Human Resources and Head Hunting 

This is another role that has been the toast of BPO service providers. These cover hiring, talent management, headhunting, retirement benefit management, insurance processing, workforce training, etc. 

5. Customer Service

Unending customer requests and inquiries can be a menace if care is not taken. Various Business process outsourcing services have keyed into providing customer support for firms that want to get off that menace. Therefore, this category covers your company's debit card processing, customer support, payment, telemarketing, order processing, warranty administration, quality assurance, appointment scheduling, etc.

Business Process Outsourcing(BPO)  Average Prices. 

As a cost-effective solution for significant businesses in various industries, the average prices for BPO vary depending on the services they rendered. For instance, you can outsource your company's Human Resources functions to a BPO for as low as $45 to $1500 per month. There's an option for an hourly rate as well. You get a quote of just $20 to $30 per hour for customer services and around $40 to $100 per hour for your IT and software functions. 

Features of Knowledge Process Outsourcing (KPO). 


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Most people consider knowledge process outsourcing (KPO) as a subset of the BPO that involves contracting out core business activities to people with more advanced technical expertise. Most companies utilize knowledge process outsourcing services when they are looking to fill some high-level role that they are being short-staffed. In addition, most companies use this window of opportunity to get their work done at a fraction of the prices they'll pay their staff. According to a respite from Grand View Research, the KPO market size was estimated to generate $124.9 billion in revenue by 2025. The main understating of Knowledge process outsourcing revolves around the purposeful allocation of core business functions to problem-solving KPo firms in another geographical location. KPO can be categorized into two distinct subcategories, namely. 

  • Research Process Outsourcing 

This knowledge process outsourcing is mainly used by companies, companies, or institutions looking to outsource research and analysis functions. Most firms see this as a window of opportunity to understand their business practices and customer experience by spending 40% to 60% less than the standard labour cost. 

  • Legal Process Outsourcing 

Legal Process Outsourcing includes all levels of legal processes. This type of Knowledge Process Outsourcing is mainly done by well-renowned law firms and businesses looking to outsource their businesses' legal work to a skillful third party. You can learn about legal processes like patent applications, legal support, legal advice to clients, deeds of agreement, and others. 

Types of Services Rendered by Knowledge Process Outsourcing. 

Every industry and company nowadays looks forward to having a knowledge process outsourcing company in their rank. Most importantly, those who want to enjoy the benefit of lower cost and improved quality of service are as follows. 

1. Online Training 

Most government agencies and parastatals who see the increasing need for quality non-formal education are employing a specialized knowledge process outsourcing company for online training for their staff.

2. Securities, Banking, and Insurance 

Some knowledge process outsourcing companies have hopped on the specialized services of stock trading, securities, investment, financial modeling, investment banking, company analysis, and others. 

3. Engineering and Designs 

There is a space for companies looking to provide a competent KPO service in computer-aided designs, engineering systems, aerospace engineering, construction designs, automotive designs, etc. 

4. Data Analysis and Visualizations 

Everyone understands the importance of big data analysis in making business decisions. You can now employ a knowledgeable KPO firm specializing in data analysis, retail analysis, data visualization, customer journey analysis, etc. 

Which one is Best for Your Business?

As I've always said to people seeking expert opinions on which one to go for between KPO and BPO for their business, there is no best fit for all levels of business. What you need is dependent on your business needs. If your business requires a high level of expertise, you should go for knowledge process outsourcing (KPO). Workers under the KPO outsourcing model are more insight-driven, with in-depth knowledge of the work state. On the other hand, Business process outsourcing (BPO) is your best shot for less complex work. Most importantly, if the work has a defined mode of execution and set rules, those that work in business process outsourcing are mostly volume-driven. 

Final Thought 

It's general knowledge that both knowledge process outsourcing and business process outsourcing are beneficial in the sense that your company can save costs and get things done faster. This does not negate the critical part of selecting the right one for your company. It's imperative to have the full scope of the work before making any decision regarding the outsourcing g model you are looking at. Additionally, the skill level needed for your outsourcing work is quite sacrosanct. It would be erroneous on your side to haphazardly select a business process outsourcing company to carry out engineering tasks. 

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