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Learn all about KPO

Why You Should Consider Knowledge Process Outsourcing

Learn all about knowledge process outsourcing (KPO), including its benefits, the most common challenges, and examples of KPO services.

Why You Should Consider Knowledge Process Outsourcing


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If you need support with highly specialized tasks that are essential to your organization’s long-term success, then you should consider knowledge process outsourcing (KPO). 

From accounting, banking, and finance to content marketing and other core activities and functions, KPO can be the right solution for many of your business processes if your organization lacks certain technical knowledge or specialized skills. 

Here, we’ll cover what KPO is, its benefits and challenges, and examples of the kinds of services KPO providers offer.

What Is Knowledge Process Outsourcing?

KPO is the practice of outsourcing core information-related business operations to freelancers or businesses that have specialized knowledge in certain areas. KPO providers offer advanced analytical skills and technical expertise to their clients.

It is important not to confuse KPO with business process outsourcing (BPO), which involves outsourcing non-core activities that are operational and transactional. Its focus is primarily on cost reduction and operational efficiency. BPO services include back- or front-office operations like customer support, data entry, and IT support.

Although KPO also aims to reduce costs and improve process efficiencies, it also requires specialized knowledge and expertise. The goal of using KPO is to receive actionable insights and strategic guidance in specialized areas. The types of processes you would normally outsource through KPO include market research, data analytics, and financial analysis.

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Examples of Knowledge Process Outsourcing Services

The most common KPO services focus on the following domains:

  • Market research: KPO providers use their specialized knowledge to analyze data on consumer behavior, market trends, and competitors’ business activities. 
  • Legal research: Law firms or big corporations may use KPO providers for in-depth legal analysis or extensive legal research for certain operations. 
  • Business strategy: When it comes to devising a long-term strategy for business expansion, KPO providers can generate granular global reporting on the most suitable areas to invest in.
  • Financial analysis: KPO providers can generate detailed analyses of market trends and provide investment recommendations. 
  • Technical support: Niche IT activities can be outsourced to KPO providers to receive quick and effective solutions.
  • Healthcare research: KPO firms can handle medical transcription, healthcare research and analytics, and other health-related operations. 

What Are the Benefits of Knowledge Process Outsourcing?

Outsourcing knowledge-based processes to third parties that are better equipped to deal with them has several benefits.

Improved core processes

One of the biggest advantages of partnering with a KPO firm is that you’ll have highly experienced individuals working on your crucial business processes. This means potential improvements to these processes can be identified and implemented more easily. 

Access to specialized expertise and technical knowledge

Having the right expertise is crucial for reaching your business goals. However, your in-house talent might not have the deep knowledge and expertise you require. Collaborating with a KPO firm gives you access to experts with the technical skills needed to achieve your objectives. 

For instance, if you require an accountant to improve your financial processes, a KPO can provide someone who is well equipped to deal with all of your specific requirements. 

Cost savings

Companies need to find ways to handle rising costs and slowed business growth. Opting for a KPO strategy for your business is one way to lower your operational costs.

Your KPO partner can streamline processes to improve their efficiency. KPO also enables your in-house staff to focus on other operational tasks more suited to their skill sets. These productivity improvements can translate to higher-quality results at a lower cost.

Additionally, KPO providers often work remotely, whether in your country or offshore. Regardless of their location, you won’t need to invest in the infrastructure and employment expenditures you’d normally provide for in-person employee roles.

For example, if you need to outsource your human resources operations, then partnering with a KPO firm based in an offshore country may allow you to cut down on salary and overhead costs and still have access to the expertise of top talent. 

What Are the Most Common Challenges of Knowledge Process Outsourcing?

Choosing to outsource your knowledge-intensive processes also comes with some challenges. We have listed the most common ones below. 

Data security risks and protecting intellectual property rights

If your KPO requirements are in the IT, finance, or legal domains, there is a high chance that you will need to share important company data.

In such cases, you run the risk of experiencing data security breaches and intellectual property violations. This could result in expensive damages: the global average cost of a data breach is $4.45 million.

Therefore, you need to thoroughly vet potential KPO providers. It’s critical to check their data security protocols and stipulate your security policies in your contract with them.   

Hiring and managing remote workers

Once you start working with an outsourcing provider, you will have less control over who is hired to perform the work for your business. Furthermore, you will likely not be able to monitor and manage the performance of these workers as closely as in-house employees.

A downside to this is a lack of guarantee when it comes to the skills and competency of remote workers or the quality of their deliverables. 

Bonus Resource: To make it easier for you to find high-quality outsourcing providers, we have compiled a list of the 14 best nearshore outsourcing companies to work with. 

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Is KPO suitable for small and medium-sized businesses (SMBs)?

Using a KPO strategy is suitable for SMBs—in fact, they often stand to benefit the most from such an approach. 

Compared with hiring a full-time specialist to resolve an issue, adopting a KPO strategy allows you to improve cost efficiency while still achieving operational excellence since you only pay for the services of a specialist when needed. 

How do I choose the right KPO service provider for my business?

When weighing your options, there are certain aspects you should consider to select the right KPO service provider for your specific requirements. 

You need to assess the provider’s services and capabilities to ensure it has the expertise you are looking for. Ask for references and check client testimonials, accreditations, and qualifications. 

Its technology and infrastructure need to be on par with your existing systems and processes to ensure seamless integration. 

Lastly, you must evaluate its cost, added value, culture, and communication. After all, you want to find an outsourced service that helps you save on costs and reduces your workload.  

Can KPO services be customized to my specific business needs?

The main USPs of a KPO provider are its ability to understand clients’ business needs, develop customized solutions, and deliver tailored, knowledge-based results.

Therefore, there are different kinds of KPO services that are customized to many types of business processes and needs. 

Final Thoughts

Working with a KPO service provider is a great way to save on costs while also receiving the expert knowledge needed to ensure your business’ continued success. Therefore, it can be very beneficial to outsource time-consuming knowledge processes that require highly skilled individuals.  

However, when it comes to such vital aspects of your business’ operation, working with a trusted provider is essential. 

Near gives you access to a pool of over 35k highly skilled workers from Latin America. We pre-vet all of our candidates and can deliver top remote talent for your business in under 21 days. 

To learn about the competitive advantages of hiring remote talent based in Latin America and receive guidance on the hiring process, download our free guide.

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