Knowledge Professionals and the Indian KPO Market: Introduction

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1.1 KPO Market in India: An Overview

India has become the preferred hub for foreign investors who are looking at opportunities to remain cost-competitive. It is the second most attractive Foreign Direct Investment (FDI) destination in the world after China. The factors in India’s favor are a low-cost, high-quality workforce and a large pool of knowledge workers with English- speaking and specialized domain skills.

Market Highlights

• The market size of the global Knowledge Process Outsourcing (KPO) industry is estimated to be US $ 17 billion by 2010, according to a report by GlobalSourcingNOW.
• The expected number of professionals employed by the Indian KPO sector will be 250,000.
• The potential of the KPO market will be US $ 12 billion.
• India's share of the global KPO sector will be 70 percent.

Knowledge Process Outsourcing (KPO) has evolved from Business Process Outsourcing (BPO) and consists of those outsourced activities that require qualified personnel and specialized skills. India, China, Russia, Philippines and Eastern Europe have become potential hubs that are capable of offering large numbers of qualified professionals such as engineers, MBAs, PhDs, chartered accountants, CFAs, lawyers, etc. through their high educational standards and systems.

In a broader sense, the skills required in knowledge-based jobs include the ability to

• Analyze data and information to produce reports that support business decisions.
• Research information from various sources.
• Convert raw technical data into presentable documents.
• Use high levels of conceptualization and theoretical knowledge.
• Show proficiency with various advanced software and hardware devices.
• Maintain workflow, meet deadlines and apply quality controls.
• Display excellent communication skills, both written and oral.

The following illustration defines the difference in scope between BPO and KPO operations.

Figure 1: Difference between BPO and KPO Operations

Source: ‘Teleconference: State of the Market and Latest Developments in Global Outsourcing: What You Need To Know’ by Stephanie Moore, Vice President, Forrester Research, May 9, 2006

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