What is KPO (Knowledge Process Outsourcing)?

Whether you're a beginner or an expert, you will find this Glossary useful.

Knowledge process outsourcing refers to a form of outsourcing core, information-related work activities executed by employees in different companies or by a subsidiary of the same company in order to save cost and resources.

Knowledge process outsourcing definition (KPO)

Knowledge process outsourcing refers to a form of outsourcing core, information-related work activities executed by employees in different companies or by a subsidiary of the same company in order to save cost and resources.

KPO involves high-value work like research, development, analysis and consultany, carried out by qualified staff. Sometimes KPO firms offer services of making low-level, easily recalled business decisions on behalf of the source company.


Reasons for knowledge process outsourcing

Companies generally take KPO into consideration in situations like:

- when they are looking for specialized knowledge and expertise

- when they have a shortage of skilled professionals

- when they have the opportunity to reduce costs by hiring skilled workers earning lower wages in another location

 Basically companies do it when they feel they can improve their value chain.


Pros and cons of knowledge process outsourcing

- reduces the costs of company's operations or products

- makes up for shortage of skilled employees in a particular field

- frees up human capital to do other work

- security can be compromised and proprietary information can be lost

- difficult to retain talent in outsource positions

- takes time and resource to establish succesful KPO

- develops challenging communication due to language/cultural differences



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