If you’re considering an outsourced call center, you might be wondering whether a BPO or KPO call center is best for your organization. In this post, we explore the concepts of BPO and KPO and discuss the key differences between the two. BPO and KPO are two types of outsourcing that companies often employ, particularly when it comes to call center operations. While BPO call centers handle processes on behalf of a client, KPO call centers are involved in the handling of information, knowledge, or data on behalf of a client company. KPO call centers are an offshoot of BPO call centers, and they’re utilized often when an organization requires a high level of specialized expertise. Here’s what you need to know about BPO and KPO call centers.
What is a BPO?
BPO or Business Process Outsourcing is a branch of outsourcing. It involves contracting out any function/segment/process to a third-party service provider. It can broadly be classified into back office and front office outsourcing. Back office outsourcing includes business functionalities such as accounting, finance or human resources. Front office outsourcing involves customer-related services such as contact/call center services.
As the name suggests, it is a process, an operation that is proven and predetermined. The executor of the process has to ensure that all procedures are executed in a consistent and efficient manner, no matter where it is located in the world.
Types of BPOs
There are several types of BPOs offering different services including:
- Call Center Outsourcing: They receive inbound customer calls or make outbound marketing calls and even act as a technical helpdesk center.
- Data Entry Processing: They provide both online data entry (updating website data, catalogues and databases) or offline data entry (creating documents, spreadsheets and updating data).
- Financial BPO Outsourcing: They provide services related to bookkeeping, accounting and financial analysis.
- Healthcare BPO Outsourcing: They specialize in creating medical transcripts, medical coding and billing.
- Engineering BPO Outsourcing: This BPO provides a wide range of services in the civil, structural or mechanical fields.
Benefits of BPO
The primary benefits of BPO are:
- Higher Profit Margins: The biggest advantage of outsourcing is the availability of human capital at low wages resulting in huge cost reductions.
- Core Business Concentration: With the majority of minor processes out of the way, management can now focus on core operational areas of the organization.
- Access to the latest technology: Small and medium-sized businesses cannot afford the licensed version of the latest software and thus outsourcing to companies that already have access to latest technology proves to be an economical solution.
What Are the Challenges of BPO?
The primary challenge for BPOs is high attrition rate. The high attrition rate in the BPO industry is attributed to factors such as lack of career growth potential and the monotonous nature of the job. Additionally, there has been recent opposition against outsourcing from UK labor unions and US politicians in order to retain jobs within their country. This is a pressing concern from the BPO industry.
What is a KPO?
KPO or Knowledge Process Outsourcing is the outsourcing of important business- and information-related activities. It can be considered to be an extension of business process outsourcing, which can also take low-level decisions but requires a more complex and often a more technologically advanced system to support it.
KPOs can be a separate organization/company or a division of the main organization either located locally or outside the country to minimize cost.
KPO demands advanced technical, analytical and specialized skills from personnel involved in the process. Personnel are required to have in-depth knowledge, judgment and be subject matter experts in their domain. This allows them to make decisions on specific issues which may arise in the process.
Types of KPOs
Some of the major areas where KPOs can offer services include:
- Business Research
- Legal Process Outsourcing
- Market Research
- Writing and Content Development
- Creative Design
- Data Analysis
- Corporate Training Services
- Education and Learning Solutions
Benefits of KPO
The primary benefits of KPO are:
- Easy access to experienced professionals: KPOs offer a convenient solution to access experience and talent without going through the hassle of recruiting and training new employees.
- Asset investment is lowered: Due to KPOs, there is a complete reduction of per head desk space and resource requirements, thereby reducing investment in real estate and technology. It also reduces operational expense.
- Increase in competitiveness: With the freed internal resources and access to new talent and ideas, competitiveness of the organization in the market is increased.
What Are the Challenges of KPO?
The primary challenge in the KPO industry is acquiring and retaining professionals in the fields of business, finance, management, law, engineering and medicine. The other challenge is the growing competition coming from countries such as Russia, China, Ireland and Israel that are entering the field of outsourcing. Finally, KPOs need to constantly invest in the latest infrastructure and technology to remain on top of the industry.
What are the major differences between BPO and KPO?
BPO and KPO may seem similar, but there are some distinct differences such as:
- BPO is based on a set process and rules; KPO is based on the knowledge, expertise and judgment of the personnel.
- BPO is less complex, is driven by volumes and requires the expertise of the process, whereas KPO is more complex, requires expertise in knowledge and deals with insights, experience and expertise.
- BPOs hire employees that have basic education, strong communication skills and general computer knowledge. On the other hand, KPOs need employees who are highly skilled and professionally qualified.
- The focus of BPOs is on low-level processes and peripheral activities of the organization, whereas KPOs deal with knowledge, information and high-level processes.
- BPO employees have a monotonous routine and set targets, whereas KPO employees provide insights, speculate, forecast and may even report directly to the client.
Both BPOs and KPOs are beneficial in numerous ways for any company considering outsourcing. Which one you choose will be based on the type of business you have and what specific jobs you wish to outsource. The skill level and training required for your purposes will most likely be the deciding factor in your decision between a BPO or KPO.