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Benefits and Risks of Knowledge Process Outsourcing

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Is Knowledge Process Outsourcing interesting for your organization? Is there a possible KPO benefit waiting for you, which enables cost-saving or reduced stress on micromanagement?

What is Knowledge Process Outsourcing?

Knowledge Process Outsourcing or KPO in short, is the delegation of value-added business information activities to an external service provider, who is specialized in this particular part of the business administration. KPO is related to Business Process Outsourcing (BPO), but due to its high complexity and business criticality, the service provider staff requires an advanced skillset and more experiences with business administration and analytics. This particular discipline should be part of your planning and overall BPO strategies.

KPO Activities

Knowledge Process Outsourcing companies can offer a variety of services, such as data analytics and turning reports into management information. KPO specialists are able to carry out global market research and help the business with the insight they require in order to do data-driven decision making. Another value-add is the capability of preparing reports and measuring the performance of processes against clearly defined key performance indicators (KPIs).

Naturally you want to also store and have a kind of retention of your business information. There are also solutions for data management, handling data, archiving data and of course retrieving data at a later point in time when required for auditory purposes or simply for stakeholder review. Other related processes and activities could also be part of the outsourcing. There are no hard borders on what a service provider could help you with.

Types of KPO

Utilizing Knowledge Process Outsourcing is a smart move not only for a single industry. KPO can help you with research on intellectual property before you are applying for a product patent in R&D. A KPO team can help a financial institution with equity and market research to support important strategic planning. KPO can be also interesting for legal and even medical services when it comes to the gathering and evaluation of data to achieve a particular goal, even if it is a time critical activity. You will not need to reduce the quality or quantity of your own operational staff’s output and make full use of the KPO service.

Benefits of KPO

Let’s be straight with this subject. Knowledge Process Outsourcing is not applicable for companies of all sizes and shapes. However for medium-sized, large or even global enterprises there is almost always a significant potential for optimization when making use of a KPO service provider. The most common and also most impactful KPO benefits consist of staffing cost reduction and advanced scalability without need to scale the HR department internally.

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You can let your key staff handle their special fields in which they excel without the need of putting extra tasks on their desks. If you work together with Knowledge Process Outsourcing companies you usually receive a really good service at low cost for your company. Beyond that the social aspects are that you help to decrease unemployment and benefit the economy of the region you are working together with.

Risk of KPO

If you are a business owner, you already know that there is no endeavour without risk. Risk is omnipresent. It needs to be identified, assessed and mitigated with a proper plan always. The risks of KPO entail key talent retention. Internal information could get lost if KPO staff is working remotely. The service providing individual might not match the company culture or there are communication difficulties. KPO is usually very time-consuming and there is often no immediate result.

Depending on the nature of your business there might be more or less risks involved in working with a KPO company, but these risks are very transparent, they can be accounted for and there can be an operational design, which allows for an efficient cooperation for the benefit of all involved parties and individuals.

Photo credit: Bruno CordioliTakuma KimuraPhil Roeder

Christopher Isak

Christopher Isak

Managing Editor at TechAcute
Hi there and thanks for reading my article! I'm Chris. I write about technology news and share experiences from my life in the enterprise world. I love readers who leave a comment. 😉
Christopher Isak

@ChristopherIsak

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Christopher Isak

Christopher Isak

Hi there and thanks for reading my article! I’m Chris. I write about technology news and share experiences from my life in the enterprise world. I love readers who leave a comment. ;)

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