The Next Big Thing – KPO

All of us are very familiar with the term BPO. BPO dream took off some five years ago and there were icons to follow. Former GE Capital staffer Raman Roy successfully ran Spectranet. Sanjay Agarwal, another entrepreneur who started life as a DCM management trainee, was making waves with Daksh. Today, though, it would take a brave soul to begin such a venture and sustain it.

Today, BPO’s are loosing it’s sheen as setting up a call centre is expensive, payment cycles are becoming longer, the competition is intense and margins drastically reducing. To add up to all this there is huge number of teenagers working in these bpo’s who change jobs frequently.

Here is when KPO would come to our rescue. Knowledge Process Outsourcing (KPO) is where outsourcers do high-end “knowledge-based” work rather than doing mere backend processing. Philippines and China are already munching on our backend processing market share.

India has a large pool of Chartered Accountants, Economists, engineers and doctors who could be a part to new era of outsourcing for India and fuel the growth of KPO’s.

According to a recent study by Evalueserve, the global KPO market is expected to grow at a cumulative annual growth rate (CAGR) of 46 per cent, from $1.2 billion in 2003 to $17 billion in 2010.

The high-end KPO opportunities are immense for Indian firms. For instance, look at some of the figures pertaining to intellectual property research.

Drafting and filing of patent applications in the US is quite expensive. A typical application costs about $10,000 to $15,000 to draft and file with the United States Patent and Trademark Office.Cost savings from off shoring even a portion of the patent drafting process can easily save up to 50 per cent of the cost for the end client, according to Alok Aggarwal, chairman of Evalueserve.

The compensation for a chip design engineer with a master’s degree and five years’ experience is about $7,000 a month in the US. An engineer with the same qualification and experience in India gets about $1,200 a month.

Naturally, the cost savings in KPO is enormous! So, get ready for KPO’s