Knowledge process outsourcing (KPO) has significant strengths that can propel businesses to success. One known advantage of KPO is cost reduction. Outsourced work in the fields of knowledge acquisition such as analytics and research in low-wage countries help companies save on financial resources and labor.
Countries like India, Philippines, Mexico, and Chile are favorite picks among expensive and developed countries in offshoring their services. The outsourcing industry for most developing countries like India and the Philippines help boost its economic growth; thus, creates a win-win situation for both investor and outsource provider.
However, there are security risks involved in knowledge process outsourcing that can ultimately invade an investor’s identity. Alongside business process outsourcing (BPO), KPO delivers security risks for companies willing to offshore their services in Asian countries or in nations where employees are underpaid.
In its most common sense, companies that operate as a core unit has the ability to secure its equipment patent, labor principles, and important information. Offshore providers have the privilege to understand a company’s internal operations; thus, revealing confidential data vital for the company’s survival.
Offshore providers are then given access on the company’s records and other significant materials and equipment.
Along with security risks, here are a few hazards that KPO produces:
- Lost of control – Companies cannot freely control their business operations anymore because of the outsource provider. The company loses its control over staff selection, which often derails the company’s competitive edge.
- Low quality of work – A company also loses its power to regulate the quality of work churned by outsource providers. The outsource provider has complete control over the people who will be working on a specific account. Outsourcing companies often hire inexperienced workers to expedite internal processes, which sacrifice the overall work quality.
- Cultural and language barriers – Outsource providers are forced in dealing with diverse cultures and different languages. Internal conflict then arises, further hampering the development of both outsource provider and investor.
Companies need to understand how strategic placement can help reduce KPO-related problems. Carefully studying the offshore provider’s business mantra and its location help secure global partnerships and eliminate internal inefficiencies.
Security is important to any company and outsource providers must never break the trust given by a foreign business partner. Both outsource provider and investor must work hand-in-hand in order to succeed and achieve their corporate goals.