VIEWS: 15 PAGES: 2 POSTED ON: 3/22/2010
Knowledge Process outsourcing Wealth creation in India by KPOs Introduction The KPO sector India has been a traditional leader in global that churns out a large number of qualified professionals. has been one of the outsourcing of information technology (IT) services and Business Process Outsourcing Role of ICTs in KPOs largest absorbers of (BPO) for some years now. In fact, the basic foundation of India’s strength Similar to other outsourcing services, ICT channels have played a critical role in the skilled graduates in the outsourcing domain has been the information and communication rise and growth of the KPO industry. The most prominent ICT channels utilized by and post-graduates technology (ICT) revolution witnessed by the country in the 90’s. Thomas L. Friedman the KPO industry include the Internet and fixed/mobile telephony. Both these in recent years, rightly argues this point in his book ‘The World is Flat’, where he reasons the massive communication channels form the basis of day-to-day operations in any KPO. and is expected to laying of high-speed cables and optical fibre lines in the 90s, and the consequent To elaborate further, the KPO industry primarily utilizes two research techniques – remain so in the availability of low-cost telecommunication services to India. Though India was always secondary and primary research. Secondary research is an Internet based technique, coming years. endowed with skilled talent, as is evident by the number of Indian engineers that which involves using search engines and paid databases to gather information. As migrated to Western countries in the 70’s is evident, this technique wouldn’t exist and 80’s, accessibility to this workforce without the Internet. It is impossible to was dramatically improved by advent of imagine antiquated research methods several ICT channels, most prominently, such as scanning books and journals in the internet. libraries in today’s scenario. The Internet has facilitated access to thousands of Knowledge process research papers, consultancy reports etc. outsourcing (KPO) at the click-of-a-mouse. This has made Outsourcing in India has moved up it possible for a company located in the value chain over the last 5-7 years India, to have access to the same level of in terms of quality of services provided, information which a company in the US and ventured into Knowledge Process might probably have. Consequently, this Outsourcing (KPO). This essentially has enabled Indian companies to carry out means delivering high-quality and ‘value- and deliver research to companies located added’ knowledge services to clients. outside India, without compromising on The major domains for KPO include the quality of information. business research, investment research, Primary research is another important market research, intellectual property, data technique, which involves conducting analytics etc. A major differentiating factor telephonic interviews, and electronic or between a BPO and a KPO is the skill set email based surveys. This is most often of employees. A KPO, in general, requires used to fill information gaps left even after qualified professionals from different fields. performing secondary research. Of course, Soumitra Sharma This includes engineers, MBAs, doctors, in areas like market research, it becomes Business Analyst, Evalueserve, India statisticians, and chemists etc. This is even the only tool to interact with consumers email@example.com more suited to the Indian scenario, due and analyse their opinions. As is evident to the rigorous Indian education system from the description, this technique is July 2007 | Vol. V No. 7 | www.i4donline.net 13 predominantly based on fixed or mobile telephony, and the Internet. It is only these ICT channels that have enabled, say an analyst based in India, to communicate with the CEO of a company in the US. Advanced communication channels have left the concept of ‘distance’, meaningless in this context. In addition, many KPOs are also using advanced telephony services such as IP telephony, to further refine their communication mediums. Another important aspect of the KPO industry, where ICT has played an important role, is client communication. It is imperative that there be an open communication channel between the client and the service provider. ICT channels, such as telephone and email based communication, have provided a convenient communication medium between clients and service providers. This has given added confidence to offshore clients, in ICT enabled Wealth Creation by KPOs terms of having a good understanding with the service vendor and The size of the Indian KPO sector is expected to reach close to ensuring that their requirements are met by the service provider. US $ 12 billion by 2010. The Indian KPO industry employed On the other hand, it has benefited Indian KPOs by ensuring close to 75,000 people in 2006. This is expected to reach close to prompt consultation and feedback with the client. Therefore, 250,000-280,000 by 2010. The sector has been one of the largest ICT channels have ensured that the KPO industry acquires absorbers of skilled graduates and post-graduates in recent years, international credibility. and is expected to remain so in the coming years. The starting A sub-set of the above issue is the medium of sending the salaries in this sector are one of the best by any standards, with research deliverable to the client. Email based communication graduate engineers and fresh MBAs commanding between 3-4 has left traditional methods such as physical mailing redundant lakhs per annum. The Indian KPO industry is expected to serve in the KPO industry. An important aspect of ensuring client close to 5,000 global companies by 2010. satisfaction is that the results of the research and analysis are While the per hour billing rate for BPO operations is about delivered to the client on-time, and in a user-friendly format. The USD 8-11, it typically hovers around USD 22 for a KPO, with KPO industry utilizes tools such as MS-Excel and PowerPoint to certain high-end projects getting billed at even higher rates of close make the deliverable user-friendly. Email communication further to USD 30-40 per hour. On the other hand, capital investment ensures that the deliverable reaches the client without any delay, per seat is similar in both cases. This ultimately translates to higher and provides instant access to the results of the study. Another revenues for the company. Therefore, the IT enabled Indian KPO emerging trend in KPOs is the creation of an FTP link on the industry is generating both employment and wealth. internal server, which can be accessed by the client as a web link through the Internet. This, in fact, solves the problem of email ICT related Challenges in the KPO Industry congestion on servers. It would not be wrong to say that, without Though ICT has played a stellar role in the KPO sector, certain the above mentioned advanced communications channels, the issues still remain to be resolved. Convenient ICT channels such KPO industry would have been nipped in the bud. as Internet have also led to data security issues. There is a real Advanced ICT channels have also facilitated the concept of risk of client deliverables and other client-specific information ‘Offshore Research Centres (ORCs)’. This essentially implies a getting leaked out through email. There have also been instances of dedicated team of analysts working full-time for a particular client. breach in client confidentiality. Another challenge is unreliability ICT channels, such as email, ensure a constant interface between of certain data/information sources on the Internet. Extensive use the team and the client. This results in a working environment of Internet research has also been seen to promote plagiarism in very similar to a conventional situation, where both stakeholders certain instances. work together at the same location. Therefore, the KPO industry will have to take necessary steps In addition, ICT has enabled quick invoicing and financial to maintain client confidence with respect to data privacy ad dealings through secure Internet transactions. This has left confidentiality issues. This will ensure that ICT continues to play foreign bank transfers, which lasted a few days, redundant. a constructive role in the KPO industry. Another important value-proposition of the Internet has been convenient access and tracking of Request for Proposals (RFPs). Conclusion The traditional methods of referring to advertisements etc. are ICT has played a crucial role in the birth and development of the time-consuming. However, websites such as dgmarkets and KPO industry in India. The sector continues to generate both devbusiness, have enabled KPOs to conveniently track new RFPs wealth and employment, and has bright future prospects, provided that are uploaded from time to time. This further provides a companies are able to resolve ICT related challenges such as data continuous stream of business to the KPO industry. protection and privacy, client confidentiality and plagiarism. i4d | July 2007 | Vol. V No. 7 14
"Wealth creation in India by KPOs"