KPO: A New Level of Outsourcing Serving High-End Financial Research
*Mr. SUNIL KUMAR RAI **Prof. SHANKAR NATH JHA
ABSTRACT
“Do whatever you can do the best, and outsource the rest” the statement itself indicates the need for outsourcing in today’s global economy. Outsourcing have become a very fascinating and productive term as well in today’s era and it is changing the face of global economy by introducing its benefits. It was born overnight and as it ingress, it brings the visions of untold success, and therefore the growth and development pains that comes from an industry formed out of opportunity instead of founded as a profession. Since those early sourcing engagements, about 20 years have been passed, and even we are still challenged
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The KPO that is one step ahead extension of BPO is the high value; high growth business which is independent of the coexistence of the BPO. The KPO industry is formed around the requirement for business intelligence and expertise and is anticipated to grow from a $1.2 billion industry (at a compounded annual growth rate of 46%).As per the reports of global sourcing the knowledge process outsourcing is forecasted to reach $ 17 billion by 2010 out of which India’s share would be $ 12 billion, predicted by Evalueserve in 2005. Similarly, the National Association of Software and Service Companies of India (NASSCOM), speculated the KPO sector in India to attain $15.5billion by 2010 (Sathe, 2006). Other countries such as Mexico, Russia, China, and Israel are also expected to become large players in this growing market (Larkey, …show more content…
These companies outsource their processes to India for: Cost Savings Operational efficiencies Access to highly skilled workforce improved quality. Knowledge Process Outsourcing(KPO) focus on knowledge expertise. KPO delivers high value to the organizations by providing them business expertise instead of just process expertise. It involves offshoring of knowledge intensive business processes that entail specialized domain expertise.
The need for KPO is not restricted to only IT-enabled services sectors, however it needs knowledge from other domains too. Some of the few examples are legal processes, intellectual property and patent related services, legal research, CAD/CAM applications, clinical research, Web development application, engineering services, and business research and analytics, publishing and market research for KPO.
2. Knowledge Process
In many cases outsourcing has proven to be beneficial for businesses. It can help a business’s management by allowing executives to focus on the core structure of the firm rather than every specific element. Production, manufacturing, or additional servic...
The outsourcing trend continues to eat up the value chain from blue-collar jobs to white collar jobs3. The software industry is experiencing an outsourcing trend to countries such as China and most significantly to India. The proliferation of the Internet has opened easier access to information and collaborative environments. Previously communication costs and access to mind power was limited. The Internet made communication costs virtually free and collaboration with groups around the makes software engineering and collaboration tasks easier. In additional, liberalization of free markets across international lines has made it easier for companies to set up and outsource engineering tasks throughout the world. Business-process and software outsourcing rely on cheaper cost structure as found in East Asia with manufacturing4.
Expense reduction: Since outsourcing firms are specialized firms, they perform activities better, cheaper and faster as compared to the companies that perform these activities in-house. Cost reductions can also be obtained by combining activities. Specialised knowledge and expertise may be provided by outsourcing firms, thus eliminating the need to maintain such knowledge in-house where it may be used only occasionally.
Outsourcing occurs when products or services are obtained by an outside supplier (Vonderembse & White, 2013). Companies may decide to outsource if it can be obtained less expensively due to specialization or the other company may have proprietary technology that gives them a competitive advantage (Vonderembse & White, 2013). This paper will analyze trade-offs for productivity improvements, discuss both the advantages and disadvantages of global sourcing versus producing in the United States, recommend a low labor cost country based on inputs, trade-offs and global advantages and give an example of a product of the specific country.
Global outsourcing first became popular in the apparel and textile manufacturing industries during the late 1960’s and 1970’s. Then it continued with automotive, computers, electronics, and other forms of assembly work during the 1980’s. Most recently, during the 1990’s, now and also in the future the outsourcing is focused on ‘knowledge’ work such as work in software design, technical support, telemarketing, call centers, and back office work. By the end of 2009 Information Technology outsourcing (ITO) revenues were over US $250 Billion while for Business Process Outsourcing (BPO) were more than US$ 140 billion. By 2006, over 200 firms from the Forbes 2000 companies and almost half of the Top Global 250 had offshored IT and business process activities. By 2008 India was managing 65% of the ITO and 43% of the BPO market. In general, India, China, Latin America, Philippines and Mexico have been the top locations for offshoring. The United States is a major player in the offshoring of IT and business process, however, Europe is also catching up. The growth of global sourcing sparked due to the technological advances in the telecommunications industry and the internet w...
Where do you start? Developing the conceptual model for business outsourcing is relatively easy as compared with legal outsourcing. The difficulty lies in executing it. Why? For the same reason it's difficult to run a business - because you've got to manage strategy, structure business processes, applications, infrastructure, and the culture all at once. The latest trend which dominates offshoring legal support services is the spreading of legal web across the world and extending legal services to the advantage of the client. As the legal market across the globe becomes more and more competitive, increasing number of international organizations seek state-of-the-art legal LPO services to meet the rising demands of quality and cost effectiveness. The complexity of BPO is daunting, and that's why it's so difficult and so rarely done well.
Jacques, V. (2006). International outsourcing strategy and competitiveness: study on current outsourcing trends, IT, business processes, contact centers. Paris: Publibook.
The competitive advantage that can be gained by the companies through IS/IT outsourcing is Improved business processes. IT outsourcing an identification method and rigor of IT resources that can help the business run smoothly. It can control the development of the project budget and expenditures. It also can promote information technology investment proposals from outside and provide skilled individuals in managing IT resources available in the company. Through these companies are able to provide appropriate information and report to the company. This can give competitive advantage to the company. For example, expenditures, progress, and issues the company can be viewed and controlled.
As everyone knows, that Outsourcing is an arrangement in which one company provide services for another company that missing or don’t have a specialty on certain area of expertise. Outsourcing is a trend that is becoming more common on information technology and other industries for services that have usually been regarded as intrinsic to managing a business.
Outsourcing takes place in different firms and the most common include, outsourcing of information technology (ITO), outsourcing of business processes (BPO), which encompasses outsourcing of human resource (HRO). ITO is where a business firm outsources services of computer technology from a third party company. BPO encompasses HRO which relates to outsourcing of customer care call centers services from a third party instead of doing it on its own.
With today’s rate of development in technology, there has also been an immense increase in global information sharing. Innovations in technology and design seem to be emerging in the market almost every month. One of the key aspects of any business is to gather, organize and efficiently apply this information. According to Antonic (2005), economic assets are fast becoming of secondary importance in the market as companies ascribe more importance to intellectual capital. With the right application of Knowledge Management methods, companies can achieve a competitive advantage through managing the immense amount of information available (Balanced Scorecard Institute, 2002).
Outsourcing has been around for many years. In this paper I will discuss some of the history of outsourcing, the goods things about outsourcing, and the bad things about outsourcing.
Nowadays, outsourcing is a viable expense sparing technique when used legitimately. It is now and again more affordable to buy an exceptional from organizations with comparative advantage than it is to prepare the great inside. As example of an assembling organization outsourcing might be Dell purchasing some of its components from an alternate producer to spare on handling expenses. Then again, organizations might choose to outsource book keeping duties to autonomous bookkeeping firms, as it may be cheaper than holding an in-house accountant.
Outsourcing and offshoring are different and I will cover each. Outsourcing is taking a specific task, multiple tasks or even large projects either on a short term or long term basis and utilising an external organisation to do this work and then bill for services. A simple example is legal work. A company may outsource to a legal firm, the work of drawing up legal contracts for their resellers. The advantages can be that the legal firm specialises in this work and can hence do it more efficiently. The firm can also be up to date on legal contract requirements and have resources and infrastructure in place to quickly and efficiently perform this task. Timelines can be reduced by leveraging the capacity of one or more (if needed) organisations
Furthermore, outsourcing is the other concept that will be beneficial for my business. Business process outsourcing (BPO) helps the bank to improve efficiency and cut the cost. I would like to outsource the need associated with technology that will help to be more flexible, proficient and more rapidly market. It helps to get cheap labor, better quality standard and to get new ideas to grow my business successfully and to exchange technologies.