July 2007

Wealth creation in India by KPOs

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The KPO sector has been one of the largest absorbers of skilled graduates and post-graduates in recent years, and is expected to remain so in the coming years.

Introduction

India has been a traditional leader in global outsourcing of information technology (IT) services and Business Process Outsourcing (BPO) for some years now. In fact, the basic foundation of India's strength in the outsourcing domain has been the information and communication technology (ICT) revolution witnessed by the country in the 90's. Thomas L. Friedman rightly argues this point in his book 'The World is Flat', where he reasons the massive laying of high-speed cables and optical fibre lines in the 90s, and the consequent availability of low-cost telecommunication services to India. Though India was always endowed with skilled talent, as is evident by the number of Indian engineers that migrated to Western countries in the 70's and 80's, accessibility to this workforce was dramatically improved by advent of several ICT channels, most prominently, the internet. 

Knowledge process outsourcing (KPO)

Outsourcing in India has moved up the value chain over the last 5-7 years in terms of quality of services provided, and ventured into Knowledge Process Outsourcing (KPO). This essentially means delivering high-quality and 'value-added' knowledge services to clients. The major domains for KPO include business research, investment research, market research, intellectual property, data analytics etc. A major differentiating factor between a BPO and a KPO is the skill set of employees. A KPO, in general, requires qualified professionals from different fields. This includes engineers, MBAs, doctors, statisticians, and chemists etc. This is even more suited to the Indian scenario, due to the rigorous Indian education system that churns out a large number of qualified professionals.

Role of ICTs in KPOs

Similar to other outsourcing services, ICT channels have played a critical role in the rise and growth of the KPO industry. The most prominent ICT channels utilized by the KPO industry include the Internet and fixed/mobile telephony. Both these communication channels form the basis of day-to-day operations in any KPO.

To elaborate further, the KPO industry primarily utilizes two research techniques

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