What is Knowledge Process Outsourcing? (KPO)

May 21, 2021 - 10 min read

Maria Waida

Wondering what knowledge process outsourcing is and whether your firm needs it? If you're a vendor manager looking for support in data analytics, market research, global reporting, or performance management, this is the resource for you. In this guide, we’ve outlined exactly what KPO is, how it differs from BPO, and who is responsible for managing it all.

We’ve also included plenty of examples, benefits, challenges, and a tool you can use to maximize your investment. Keep reading to learn more about knowledge process outsourcing and how Wrike can help you manage it.

Introducing knowledge process outsourcing (KPO)

Knowledge process outsourcing (KPO) is the practice of tasking contractors with information-related business activity. These contractors are typically freelance individuals with highly specialized knowledge in a particular area. This makes them more qualified to understand and apply the data collected.

The biggest difference between KPO and business process outsourcing (BPO) is that BPO is all about creating and following a process, whereas KPO is focused on providing a specialized knowledge set along with their services. Essentially, you’re choosing between a firm with a highly efficient process without experts versus a firm with specialists who can create custom processes depending on the needs of the complex topics at hand.

The information KPOs process is essential for business. It’s centered around data that is a foundational element of the brand’s value chain. Not only is it necessary for operations, but it’s also key for creating valuable products and services.

This process is heavily data-driven and complex. It includes everything from identifying data points for collection to mining it all for actionable insights. The work involved is considered intense. And with the number of special skills required to tackle the various areas, it’s no surprise that businesses often hire more than one outsourced employee or a KPO firm to assist them.

These outsourcing facilities are located all over the world. This can be very cost-effective for businesses located in countries with stronger currencies. But it also presents challenges typical for remote work.

Who manages knowledge process outsourcing?

Vendor managers, business operations managers, and management consultants are all great candidates for managing knowledge process outsourcing. Their biggest challenge is aligning internal and external collaborators. This business process management is commonly built from the ground up. But it can also be based on past experience and workflows on other data-related projects.

The other biggest challenge KPO managers face is finding and keeping the best possible talent. According to India news outlet Firstpost, it’s important to find KPO firms that focus heavily on understanding the domain and objectives.

They go on to say that, “investing in strong domain specialists [who are] relentlessly living the culture of the domain in which they operate” is an absolute must for successful KPO organizations.

This means vendor managers will be the ones responsible for making sure that communication is strong and KPO firm alignment is stronger in order to succeed. Advanced tools such as business process management software are vital for every step of KPO management.

When do you need KPO?

There are three major scenarios businesses face that make them great contenders for knowledge process outsourcing. The first is a lack of specialization. Their teams may be missing someone with a deep knowledge of a particular data area. Or they lack data analysis experience. They may even have one or two qualified team members, but the task at hand requires additional support.

The second, as we’ve just mentioned, is a lack of employees. Whether that means having a team that lacks qualifications or one that is already overburdened, businesses may need additional help for this process. This reason is especially prevalent among bootstrapped startups.

The third is a lack of resources. That could mean teams are already short on time, the KPO process has a tight deadline, or businesses lack the funds to hire full-time employees. The hiring process for temporary employees and partners is less costly than the hiring process for salaried team members.

Plus, the cost of doing business with a KPO firm is low risk because the prices are typically lower than the in-house equivalent and they are only onboard temporarily for this one project.

What types of businesses use knowledge process outsourcing?

There are many different types of businesses that use KPO. But what they all have in common is the need to collect, store, and analyze a high volume of valuable data.

This is especially prevalent in industries such as finance, law, engineering, medicine, and technology. It’s also key for certain government agencies and researchers in nearly any discipline.

Even if a business doesn’t fit under these categories, they may have an internal department that can make use of KPO. For example, creative teams such as content marketing and graphic design often need data support since their work is directly tied to marketplace and audience information.

KPO even covers operational needs that every corporation uses. An international KPO firm named airisX offers services such as back-office support with customer solutions and sales. They also provide support for e-commerce and enterprise data management.

So as you can tell, there’s no shortage of industries that can benefit from partnering with a KPO firm. Even if a company doesn’t fall under the categories listed above, it may still need the support either out of necessity or as part of a larger resource management strategy.

Types of KPO services

Clutch recently listed the top KPO companies of 2021 based on customer reviews. Aidey, Unity Communications, and ARDEM Incorporated make up the top three. Here is a sampling of what they and other KPO firms have to offer:

Customer Service, Experience, and Success
Technology Support
Back Office Functions
Operations Streamlining
Telecom Integration
Data Entry
Accounts Payable
Utilities Management
Call Centers
Healthcare Services

In addition to the services they provide, top KPO companies also include essentials such as data security, industry experts, and a high level of quality management. Reviewers on Clutch point out that responsiveness and attention to detail were some of the other service-related offerings customers can expect from KPO firms.

Overall, KPO services tend to be well-rounded but also include experts who can provide great experiences for both you and your customers.

What are the advantages of KPO?

The biggest advantage of using knowledge process outsourcing in project procurement management is cost. KPO firms often provide competitive pricing. They’re also contract workers, so corporations save on some tax and benefits packages.

Vendor managers can choose when to hire new talent or pause contracts as needed. So with a little forecasting, businesses can reliably stay within budget by eliminating what might otherwise be fixed expenses.

Companies that choose to outsource also save on training and resources since most KPO firms take on the burden of providing both to their employees. For highly technical skills, this could mean big savings when it comes to recruitment costs. This is especially true if the role will be short-term or if it’s slated to begin sooner than later.

Beyond the financial opportunities, some other advantages of KPO include increasing process efficiency and sourcing unique talent. Most knowledge process outsourcing firms have the experience and tools needed to streamline operations for any organization. Whether that means taking on the burden of heavy task loads or simply providing streamlined workflows, KPOs offer smarter resources management.

And when it comes to sourcing unique talent, KPOs present fast and easy solutions for finding a subject matter expert as needed. Since KPOs tend to have a wide variety of team members, there is a good chance that they’ll be able to provide a specialist for any project right when you need them. They’ll already be trained, are familiar with your industry, and are able to onboard much quicker than traditional hiring processes because they’re already part of the KPO team you’ve partnered with.

What are the challenges of KPO?

According to Outsource Philippines, where KPO firms are set to become “the second largest source of the country’s foreign exchange,” the biggest challenges revolve around security.

Sharing data with a third party always poses a risk. Data can be stolen, sold, or even lost in the process of working with an outside vendor. That’s why it’s so important that vendor managers take extra precautions when making their final hiring decisions.

Another challenge to consider is fit. Just because a KPO offers a comprehensive list of services doesn’t mean they’re the best partner for a particular company. And with high staff turnover rates, vendor managers may find themselves spending more time getting acquainted with new account managers and specialists on a regular basis, sometimes even mid-project.

Compliance is another issue KPO firms regularly deal with. That means dealing with the risk of data confidentiality and security. A strong HR department can prevent obstacles like these. However, it’s nearly impossible to know how well a KPO brand deals with these issues before you partner with them.

With all this in mind, vendor managers should make sure they’ve thoroughly researched the reputations of their prospective KPOs and look for established brands to partner with.

Knowledge process outsourcing examples

Again, it’s important to keep in mind that the unique value proposition KPOs offer is specialty, which is why they are a great option for tasks such as:

Medical hospital invoicing and billing for complex surgeries
B2B tech software development firms that need assistance streamlining their production line to maximize profit without sacrificing quality
VC firms that need assistance with investment research for interesting yet time-sensitive new opportunities

How to manage knowledge process outsourcing with Wrike

Wrike is a project management software that makes working with a KPO safer and more efficient. Project management timelines and tasks make it easy to assign work both internally and externally. And because project Gantt charts are highly visual, outsourced specialists can quickly reference their own personal due dates, as well as where their work fits into the bigger picture.

Wrike also provides a solution to data sharing with enterprise-level security. Not only can your team share and store data files right within the platform, but they can also control who has access to what. This ensures that information is still easy to locate, but it also keeps sensitive and unrelated information on a need-to-view basis.

The more you work with KPOs, the more you’ll want to use a robust and secure project management platform such as Wrike to maximize the impact of your investment.

Choosing the right KPO firm to partner with is challenging when your company’s most valuable data is on the line. Wrike creates peace of mind with the help of advanced features perfectly suited for third-party collaboration. Start your free trial today.

Maria Waida

Maria is a freelance content writer who specializes in blogging and other marketing materials for enterprise software businesses.

#Work Management #Business Process Management

Project Management 10 min read

What Is Risk Identification in Project Management?

If you Google ‘why projects fail’ you’ll get several pages of articles and resources, including 5 Reasons Why Project Work Plans Fail and How to Avoid Them here on Wrike. A lot of the reasons are procedural relating to scope definition, methodology, and communication, for example, but there is a common theme: an inadequate risk identification process. Poor risk management isn’t just an issue that impacts big businesses. Smaller businesses are prone to the same types of mistakes and their consequences, which can be just as (if not more) catastrophic for them. Project risk identification is not just for enterprises but a practice that should sit at the core of any business’ modus operandi. What is risk management? Risk management is the process of identifying, tracking, and managing potential risks that can impact the overall health and reputation of a business. The Association for Project Management (APM) in the UK describes it well: “Risk analysis and risk management is a process that allows individual risk events and overall risk to be understood and managed proactively, optimizing success by minimizing threats and maximizing opportunities and outcomes.” Without buy-in from the top, proper stakeholder engagement, and a disciplined approach to risk identification and management, a project will carry a higher risk of failure. The lesson here is to tackle risk at the very start of a project and let your learnings inform decisions relative to scope, process, and resourcing. Consider issues that come up time and again across projects, such as fixed price contract risk, or risk related to certain times of year for customers. Our How to Make a Risk Management Plan article covers this and includes examples you can refer to. Remember this too — risk management is not just a process but about culture as well As Tom Wilson, Allianz Chief Risk Officer, reminds us: “Risk management is a culture, not a cult. It only works if everyone lives it, not if it's practiced by a few high priests.” On a higher note, there are also risks that can benefit a project. For example, a potential change in an organization’s policy that would remove red tape and save you time. These are typically referred to as opportunities, while negative risks as threats. You can learn more about this by reading our What Are Positive Risks in Project Management? post. What is the risk identification life cycle and process? Diving deeper we find risk identification, which is the first step of the risk management process. We’ve described step one in our Project Risk Assessment guide: "Create a list of every possible risk and opportunity you can think of. If you only focus on the threats, you could miss out on the chance to deliver unexpected value to the customer or client." Notice how the latter part of the definition makes a strong case for including positive risks in your planning — take every opportunity to delight stakeholders. So, how do you go about identifying risks? There are different frameworks for this and you should choose one that best fits your organization's working practices and resourcing. The Project Management Institute (PMI), for example, published a comprehensive guide that explains its model in detail. This may be overkill if you’re working on a simple project or within a small organization but worth understanding nevertheless. Let’s consider context first. Much like a project within a project, the risk identification life cycle is a process that delivers key elements of an overall risk management plan. The Risk Identification process itself follows a defined structure and is elaborated progressively through six stages: Template specification Basic identification Detailed identification External cross-check Internal cross-check Statement finalization How to identify risks in project management For brevity, we’ll focus on the initial three steps as they cover risk identification specifically (while the remaining steps are about validating and formalizing findings against the overall project’s scope). Template specificationThis is a risk statement based on feedback about causes, effects, impacts, areas of risk, and events. A structured template helps you capture this in a consistent way. Basic identificationAnswering two questions about potential risks: why or why not us and whether they have been experienced before. The former can be captured via SWOT analysis exercise while the latter is a statement, ideally referenced from a project post mortem or lessons learned library. Detailed identificationThis step is more time-consuming than the previous ones but also delivers the detail you need to properly assess risk. PMI identifies five tools to use: Interviewing Assumptions analysis Document reviews Delphi technique Brainstorming Once you’ve completed these steps you’ll need to categorize risk in the next one — the External cross-check step. We’ve covered this in our Understanding Risk Breakdown Structure article. Step five is the Internal Cross-check which maps risks to corresponding elements in the scope of work. At this point you will start forming a view of what project elements are riskier than others, and what mitigation strategies to adopt. The final step, Statement Finalization, packages findings in a series of diagrams covering risky areas, causes, and impacts. Tip: Use a tool like Wrike to maintain a risk register spanning all of your projects which you can refer to whenever you start a new one. Risk identification example Here are a couple of examples, the first one based on PMI’s methodology outlined above and the second one captured in an online risk register. Risk identification example 1 Risk identification example 2 The two examples are not necessarily alternative approaches. Rather, the first one is a sample risk identification template, and the second one is a risk register holding the same information. By using an online project management tool it becomes much easier to manage both processes and give visibility to stakeholders. How to make a risk management plan Think of the risks you have identified as the foundation blocks of your risk management plan which typically includes the following elements Risk identification Risk evaluation Assignment of risk ownership to project team members Risk responses Plan to constantly monitor for new risks and address them appropriately By the time you have completed the risk identification step, you will be able to refer back to detailed information for each to evaluate them, assign ownership, and determine responses. Work doesn’t stop once you’ve done that. As the project progresses, you’ll need to monitor for and identify new risks. Risk ownership plays an important role here too, so make sure you’ve defined processes for communication and escalation. This brings us to the next question: who should oversee risk? Who should oversee risk? Large organizations appoint risk managers at the C-suite level and often form risk committees with representatives from different departments, who report back to the CEO and the Board. Large organizations will have their risk governance regularly audited by external parties too. The model becomes increasingly ‘risk governance lite’ for smaller businesses but project risk identification and management should always be a priority. It’s good practice to assign responsibilities at the very start of a project, mapping roles with responsibilities. Here’s what this could look like for larger organizations. Project sponsor Has overall responsibility for a project and a view of and signs off on the risk management plan. Project manager Overall responsibility for risk management including communication and escalation. Risk owner This could be a member of the project team or a stakeholder who isn’t part of it but nevertheless owner of individual risks. Risk Committee Has a view of risk across every project of an organization. In smaller organizations, you’ll see business owners wearing the project sponsor hat and are less likely to have risk committees too. The more diligent ones will cover risk just as effectively by streamlining the process. Risk identification template A template to list and analyze risks is an easy way to ensure you and your stakeholders are on the same page. With Wrike's Project Risk Analysis Template, your team can quickly and easily identify potential risks and their scope, mitigate risks by prioritizing certain tasks, and implement RAID (risks, assumptions, issues, and dependencies) logs into your workflow. Wrike's template comes with pre-built request forms to help you create detailed RAID entries when they arise. As you can see from the table above, each risk, along with its impact, probability, and proximity scores, are all listed in one place, so your team can capture and mitigate risks at a glance. Using Wrike to manage (and mitigate) risks Risk management is a critical and substantial component of project management. It can be an expensive exercise too if you consider that it can eat up to 20% of the total project’s time. It’s therefore surprising to learn that many larger organizations rely on outdated tools like documents, spreadsheets, and emails to manage risk. . This presents all kinds of risks if you think about it. How many times has a file gone missing or an older version updated and circulated? By using a modern, versatile, and powerful project management tool like Wrike you gain efficiency and reduce risk at the same time. Here’s how: Your risk identification and management process is centralized and easily accessible You can design workflows to facilitate steps in your risk management plans You can add multiple levels of categorization and tagging to risks to search them across multiple projects You get alerted of the more critical and high priority risks You’re always up to date and can run reports at the touch of a button You communicate and collaborate in real-time If this looks like a more streamlined approach than what you’ve currently got then you really need to consider Wrike for your next project. Get started today with a free two-week trial and learn how Wrike can help manage project risks and of all sizes.

Project Management 7 min read

What Is Business Process Outsourcing? A Guide

As businesses scale and grow, they often have requirements that cannot be addressed internally — whether because of resource or budgetary constraints. Business process outsourcing (BPO) can be a solution that enables organizations to grow and scale effectively. But exactly what is business process outsourcing? What are the risks associated with the practice, and how can corporate leaders use business process as a service (BPaaS) to their advantage? BPO meaning: What is business process outsourcing? Business process outsourcing describes a practice where specific tasks, functions, or processes within a company are contracted out to third-party organizations and vendors. These outside organizations have expertise in their specified area, which allows them to manage tasks and processes on behalf of other businesses. For example, a marketing agency, during their resource planning process, may choose to outsource their payroll and accounting functions in order to focus on the core competencies of their organization. There are three types of business process outsourcing: offshore, nearshore, and onshore outsourcing. Offshore outsourcing: The function is managed by an operator or vendor in a different country (often far away and in another time zone) Nearshore outsourcing: The function is managed by an operator or vendor in a neighboring/closeby country Onshore outsourcing: The function is managed by an operator or vendor within the same country — but could be in another state or region Business functions ideal for outsourcing may include admin, customer service, PR, data entry, HR, content moderation, and more. Business process outsourcing can improve efficiency and present significant cost savings for companies that may not have the resources to hire a team of in-house customer service specialists or payroll professionals, for example. In fact, Deloitte research indicates that 59% of companies who outsource say they do so with cost savings as a primary motivator. What is business process as service (BPaaS)? Business process as a service enables BPO by managing specific functions through cloud-based delivery systems. The global BPaaS market is extensive and expected to reach a value of $77.8 billion by 2023. Some well-known names in BPaaS include Accenture and IBM. BPaaS can help manage: Finance and accounting IT services eCommerce Customer service processes BPaaS leverages the capabilities of infrastructure as a service (IaaS), software as a service (SaaS), and platform as a service (PaaS) solutions in order to help companies manage and address their business objectives. Business process as a service also relies on automation in many cases, reducing the need for manual intervention. Who needs business process as a service (BPaaS)? Business process as a service can be beneficial for organizations across sizes and industries. For example, instead of hiring an outside firm to manage their finance and accounting needs, a company might instead execute this function via a cloud-based platform licensed through a monthly subscription model. This naturally brings costs down and offers a more flexible and scalable way of managing operations. Any company looking to manage processes without the costs associated with hiring, training, and managing an internal team or department may find that BPaaS is an effective solution. What are the benefits of outsourcing business processes? There are many benefits associated with outsourcing business processes. These benefits include cost and time savings, efficiency gains, the ability to focus on core business competencies, and more. Be sure to keep these in mind when contemplating outsourcing professional services key success factors, and which professional services agency is right for you.Cost savingsHigh costs associated with labor, training, management, and infrastructure can be a barrier as an organization scales and grows its operations. Outsourcing non-core processes can enable businesses to meet their objectives and operational needs while minimizing these internal costs and time commitments. Access to expertise and improved efficiencyBPO gives businesses access to vendors that have the necessary expertise, equipment, and personnel needed to execute a project or function on their behalf. This expertise means they are better equipped to provide cutting-edge, compliant, and effective services. Ability to focus on key business competencies As a company grows and scales, there is often a need for growth or expansion in other areas of the business. For example, a high-growth eCommerce company may need increased customer support capabilities to provide quality assistance to customer queries and issues. In this instance, outsourcing customer support staff to an agency or outside vendor allows the business to focus on its main competencies while also addressing customer challenges that can impact the bottom line. As is the case with most things, business process outsourcing can have its set of challenges and risks. Are there risks to business process outsourcing? Risks in business process outsourcing can include lower than expected or inconsistent quality of service, lack of visibility and collaboration with the vendor, and security considerations. Inconsistent delivery We’ve all been there. A service looks good on paper, but the results turn out to be inconsistent or of a lower standard than expected. This is always a risk, especially when outside vendors are involved. Lack of visibility and collaboration When handing over the keys to a business function, visibility and communication allow those within the organization to accurately track progress, success, and any challenges. Lack of visibility is a huge risk and could mean that a lower standard of service is inadvertently being passed on to customers. Privacy and security concerns Privacy and security are a top concern in business process outsourcing. In most cases, BPO will involve some degree of handling sensitive or confidential internal data. Engaging a vendor with lax digital security policies may make an organization vulnerable to breaches or attacks. As Deloitte notes, the tax implications of business process outsourcing should also be a consideration and factored into any business case. How to choose the right BPO vendor Choosing the right vendor can help avoid headaches, losses, and disputes. Here are some tips for choosing the right BPO partner for your business. Due diligenceDue diligence will involve researching the vendor and their reputation to determine if they have success and experience with your industry, project type, or company size. Understand costsWhile cost-saving is a major factor when establishing a BPO partnership, unexpected fees may make outsourcing pricier than initially thought. Evaluate security infrastructureWhen determining the suitability of a vendor, be sure to assess their ability to manage and protect sensitive information. Communicate clear objectives and KPIsClearly communicate objectives, expected outcomes, and KPIs and ensure they have the capacity to deliver. Ensure stabilityOutsourcing a business function can be risky if the third party is in a financially, legally, or otherwise unstable position. Overreliance on unstable vendors can be a unique challenge to overcome. How to organize your BPO with Wrike Streamline and simplify your business process outsourcing with Wrike. With Wrike, you can: Create and manage a risk register for your vendor and the outsourced function Invite vendors as external collaborators to share reports and status updates Share and store vendor meeting minutes using our actional meeting notes template Integrate data from 400+ applications like Salesforce, Marketo, and more Take advantage of the cost savings, time savings, and expertise that BPO and BPaaS can afford your business. Be sure to track and manage progress, communication, and risk using Wrike. Sign up for a free two-week trial and discover why 2 million+ people trust Wrike to manage and execute their tasks and projects.

Project Management 10 min read

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What is Knowledge Process Outsourcing? (KPO)

Introducing knowledge process outsourcing (KPO)