What is Knowledge Process Outsourcing?

Tess C. Taylor
Tess C. Taylor
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Knowledge process outsourcing, or KPO, pertains to the use of an outside source or service to handle knowledge and information management for an organization. This practice is most often used by companies that lack the proper human resources or time to manage multiple tasks. Knowledge processing outsourcing generally costs less and offers a greater range of professional wisdom and skills than in-house information management.

In many companies, not having adequate staff to handle ongoing, complex or time-consuming tasks can be an overwhelming challenge. Tasks such as customer service, information technology (IT) and administrative functions can be better managed through a network of outsourcing firms. This allows vital company operations to take place while not detracting from the quality of the production of goods and services demanded by customers.

Knowledge process outsourcing is most often contracted with outside firms that specialize in one or more areas of call center, financial or IT specializations. Routine tasks such as handling customer service calls or processing payment information can be handled by an outsourcing call center company. In addition, outsourcing leads to greater management of support often needed by information technology processes.

Many firms use knowledge process outsourcing companies located in the eastern hemisphere in order to cut costs and operate in additional time zones. This practice reduces hourly costs as workers in these regions generally work for lower wages and don’t require employment benefits. In addition, there are more trained specialists available to handle routine matters that don’t interfere with the general operations of the company.

Another reason why companies utilize knowledge process outsourcing in certain industries is due to the high rate of employment turnover. This is especially true in high-stress careers such as customer service or information technology. Having to replace employees continually takes a toll on human resources budgets; therefore it’s easier and less costly to find immediate support from an outsourced company that handles this process externally.

In some industries, knowledge process outsourcing is viewed as more productive. With many companies operating on a global basis, having quality staff to meet immediate needs for important projects means better results over the long run. Instead of spending months trying to assemble work teams, outsourcing firms can pull from available resources and get projects underway quickly and efficiently at lower overall costs.

There is a trend towards companies in the IT, engineering and communications fields relying more on knowledge process outsourcing. As projects become more complex, companies need to have a wide range of talent to work on projects to completion rather than just handling small parts. Outsourcing a larger share of work projects can benefit the bottom-line that companies are more focused on in the challenging world market.

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