The Difference Between BPO and KPO Outsourcing TipsChris JankulovskiJanuary 28, 20153 At a mention of it, business process outsourcing not only rings a bell, it shakes the bell. In contrast, a mention of knowledge process outsourcing often doesn’t even touch the bell. In other words, business process outsourcing, or BPO, is more known than knowledge process outsourcing, or KPO. But exactly what is KPO, and how is it different from BPO? Are they operations you can interchange, or do they match specific needs? If you’re a businessman interested in advancing your company through outsourcing, you may want to learn the answer to these fundamental questions. What is BPO? Image Credit: david chubb When you contract a business process to a third-party company, that is business process outsourcing. It is often a means to manage critical front and back office processes, while cutting back on costs. These companies don’t have to be your partners in the country (or onshore outsourcing), they may be from another country (which would be offshore outsourcing), or from your neighbor country (which is nearshore outsourcing). Of course you’d only outsource processes that don’t carry your competitive edge. Meaning, the core processes of your company would remain to be done in-house, and especially focused on. Such processes you may send overseas, that other companies usually outsource, are payroll, tech support, and marketing. What is KPO? Image Credit: Rory Hamilton When you contract your core processes, on the other hand, that’s knowledge process outsourcing. It isn’t specifically for lightening up the load, but it does help that way. Partnering with another company to deal with your tasks that are leveled at high complexity does not mean that you’re letting another company control yours, what it does mean is that you’re getting expert help for the advancement of your business. KPO is the analyzing to BPO’s reading, so you can say it’s a step up from the latter. What are the differences of the two? A lot of the key qualities that differentiate the two from each other comes from the fact that the other one attacks the core of the business. Thus follows the difference that KPO involves experts and highly skilled professionals to help a business, while BPO doesn’t require as high a professional level. KPO professionals then don’t deal with transactions, they instead analyze the results of the transactions, in order to improve the quality of the company’s product or services. BPO professionals, on the other hand, handle transactions, such as customer service, enabling companies to deal with the bigger fish–which is again, their core needs. When it comes to cost, it is highly likely for you to cut back with BPO rather than with KPO, given the high expertise level you’re requiring with the latter. You’re instead after quality and the leverage of knowledge for your company by acquiring the services of KPO professionals. Although these two are not the same operations, they don’t go abreast, to be clear. KPO is only an extension of BPO, which means one is not better than the other. It’s just that you may need one more than the other. So which one does your business need? It depends on what you’re looking for. You do have the choice to have both their services, so you can get the best of both worlds. Special thanks to: jordan_petrocchi for the main image, follow him on Flickr.