Multinational businesses and large-scale companies depend heavily on outsourcing, which involves hiring a third-party service provider to formulate solutions and provide multiple services. BPO and KPO are the two major kinds of outsourcing used by firms to outsource their human resource management, marketing efforts, technical assistance, customer support and more.
BPO refers to business process outsourcing, which involves non-primary responsibilities that help business reduce their expenses and increase revenues and productivity. These activities include technical assistance, human resource training, recruitment and more. KPO refers to knowledge process outsourcing, which involves the outsourcing of knowledge-based processes, such as legalities, marketing research, analysis, data analytics and more.
In this article, we will explore the key differences between BPO and KPO, alongside examining their advantages for large-scale businesses.
Both KPO and BPO call centers have their own advantages and offer a wide range of perks for multinationals and companies looking to outsource their corporate responsibilities. However, the right choice for your call center depends entirely on the kind of business you have, along with the specific nature of the tasks that you intend to outsource.
The major deciding factor in your choice between BPO and KPO is the level of training and skills required to fulfill your purpose of outsourcing. Naturally, if your outsourced jobs are focused on human resource development or technical assistance, a BPO call center is more suited for your outsourcing. However, if you need outsourced assistance in handling legal matters, conduct marketing analysis, or provide data analytics assistance, KPO call centers are ideal for you.
What are the major differences between Business process outsourcing and Knowledge process outsourcing?
Business Processing Outsourcing and Knowledge Processing Outsourcing are two very different processes of outsourcing corporate procedures and jobs that allow business to obtain professional expertise without overwhelming their workforce.
BPO refers to the outsourcing of non-primary corporate job roles to a third-party service provider in a bid to reduce company expenses, boost productivity, efficiency and revenues, while KPO refers to outsourcing the research-oriented processes that involve the pursuit of knowledge to a highly skilled workforce, allowing the company to benefit from valuable insight.
BPO call centers offer a wide range of services, including customer support and care, technical assistance and solutions, human resource management, accounting and financials, website services and more. On the other hand, KPO call centers involve market research initiatives, data analytics, corporate research, legal assistance and procedural outsourcing, investment research and more.
BPO involves following a set pattern of rules and regulations, while KPO is the foundation of insight and innovation that is driven by the judgment of highly skilled personnel. BPO requires a personnel with excellent communication skills, however, KPO requires highly trained and competent team of professionals capable of conducting research and providing valuable insight.
BPO is focused on low-level processes, while KPO involves high-level processes. Moreover, KPO requires higher level of coordination and collaboration between the team, while the tasks allocated to a BPO call center do not require much coordination and collaboration. Needless to say, KPO call centers have a much more complex nature of responsibilities, and while BPO is driven by procedural expertise, KPO requires knowledge-based expertise.
BPO is driven by volume and is depended on cost arbitrage, while KPO is driven by information and insights, and relies on knowledge.
What are the benefits of BPO and KPO?
If you’re having difficult comparing BPO vs. KPO, to determine which is better, allow us to help you understand the benefits of each call center.
Benefits of BPO
- The most competitive advantage of BPO call centers is the availability of low-wage workforce that allows firms to reduce their expenses and increase their profits.
- BPO call centers allow businesses to outsource menial and minor responsibilities, allowing the chore team to focus on the more important operations and responsibilities of the firm.
- Outsourcing companies and service providers allow small and medium-scale firms affordable access to innovative technological tools, licensed versions of latest software, and cutting-edge technologies, which they cannot otherwise obtain due to financial constraints.
Benefits of KPO
- KPO outsourcing allows businesses to obtain highly skilled and experienced professionals with a highly convenient solution that does not involve the time consuming and expensive processes of recruitment and training.
- It also allows firms to reduce their expenditures and asset investment in technology and real estate by reducing the need for office space, fixtures and furniture, and technological tools, which brings an overall reduction in operational expenses.
- Obtaining cutting-edge research and information, and the ability to obtain new talent and insight empowers a business with a dynamic competitive edge that allows it to increase its market presence and expand its operations.
Frequently Asked Questions
What are the types of BPO and KPO?
There is a wide multitude of BPO and KPO outsourcing and call centers. The types of BPO outsourcing include call centers for inbound calls and outbound marketing, data processing, financial and accounting outsourcing, healthcare outsourcing and engineering outsourcing in the fields of structural, civil and mechanical engineering.
The types of KPO outsourcing include business research, data analysis, market research, investment research, outsourcing legal processes, content development, creative designing, corporate training, learning solutions, education and more.
Are there major challenges when you choose BPO or KPO? What are these?
There are certain challenges involved in BPO and KPO, and they largely revolve around dealing with a third party service provider. When a business outsources a series of responsibilities, it loses direct control over these processes, and has to rely on the third party to fulfill these responsibilities with diligence and dedication. However, hiring a reputed service provider often outnumbers the challenges with striking advantages.
What is the difference among BPO, KPO and a call center?
The term call center is often used to refer to a help desk or technical assistance provider, but in terms of corporate and outsourcing solutions, there is a variety of call centers, designed to provide a specific set of services and purposes. BPO and KPO are outsourcing call centers that are designed to fulfill a specific set of purposes, which fall beyond the realm of customer service and help desks.
How do I know what to choose between BPO and KPO?
When attempting to understand the difference between choosing KPO and BPO, it is important to examine the assistance that you seek. Your choice will depend entirely upon the services you seek.
Why do I need to choose between Business and Knowledge process outsourcing?
Depending on the nature of your business, and the nature of the tasks you seek to outsource, choosing between Business and Knowledge process outsourcing is important in order to benefit your business. If your business already has a team to manage human resource management, accounting and financials, and other job roles, and you lack a research and insight department, a KPO is more valuable for your business, and vice versa.
BPO and KPO outsourcing services are designed to provide firms the added advantages of a skilled workforce aimed at reducing their expenses and operational costs, increasing their profits, productivity and efficiency. BPO involves dealing with business processes of human resource and training, financial recording, data entry and more, while KPO deals with the accumulation of knowledge, insight and market research.