KPO and BPO: What are their Differences?

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At this modern era of advanced technology, most developments and innovations are directed toward helping business progress. Since the cost of labor has continuously become more expensive and less reasonable with regard to the amount of workload, business owners and entrepreneurs are now considering hiring outsourced services. Most evidently, services that are being outsourced are business processes and knowledge processes.

At first, there was only business process outsourcing (BPO), but as years pass by and as businesses felt the more intense competition in their respective industries, the need for knowledge processes outsourcing (KPO) gradually increased. BPO and KPO are two distinctive and individual industries commonly mistaken for the other. Some think they come from the same industry while others argue that they are independent from each other.

To help set the record straight, listed below are some of the differences of KPO and BPO:

  • BPO stresses on expertise on business processes and back end operations; KPO emphasizes knowledge on the business itself and its processes.
  • BPO requires basic professional, management, and administrative skills; KPO requires advanced analytical and technical skills coupled with judgment to execute highly complex and customized processes.
  • BPO is more about size, volume, and efficiency; KPO derives its strength from the depth of knowledge, experience, and judgment factor.
  • BPO focuses on reliable execution of standardized processes; KPO is the carrying out of extremely complex, and sometimes customized, processes.
  • KPO handles more amount of high skilled work than most BPO companies.
  • While almost anyone can offer BPO services, including freelancers, KPO is not as easily provided since it requires advance education and specialized trainings, advanced analytical and technical skills, and the ability to make sound judgments.

On the other hand, in terms of outsourced services, BPO and KPO are the same since they are both provided by a different company and are both situated in a different location (could also be in a different country) from the one needing the outsourced service. Also, both offer their respective services in affordable and fairly reasonable costs, which are highly comparable with the costs of hiring and training new employees.

Regardless of all these, the main point of outsourcing is cost reduction. So whether it is business processes or knowledge processes that are being outsourced, the fact still remains that both are beneficial to all businesses and is gradually becoming a necessity for every business rather than an “accessory.”


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