35
A Knowledge Process Outsourcing (KPO) strategy can aid you acquire expertise from a third-party vendor as an alternative of hiring and training specialized professionals in-house.
The KPO industry in India offers services like data analytics, legal processes, IT services, etc., at inexpensive prices. This helps firms increase profitability, access specialized professionals, and develop quality end-products – making India the right KPO destination!
In this text, we’ll learn more in regards to the Indian KPO industry’s benefits, cons, and popularly outsourced processes. We’ll also look into the five best KPO firms to assist outsource your enterprise functions to India.
Table of Contents
Let’s begin!
An summary of the KPO industry in India
KPO is a subset of Business Process Outsourcing (BPO). Within the KPO model, firms outsource information-based business activities like data analytics and financial service to third-party vendors in countries like India, the Philippines, China, etc.
These processes need professionals with more technical knowledge like programming skills and software proficiency than within the BPO industry. Hiring such employees could also be expensive in western countries just like the USA, UK, etc.
But why has India emerged as one in every of the highest KPO destinations on the earth?
India has seen a formidable growth rate within the KPO industry lately, taking on nearly 70% of the worldwide KPO market. The rationale for such tremendous growth is principally because of:
- Availability of highly qualified KPO professionals.
- Advanced software and technology.
- Sixth highest English language proficiency in Asia.
- Well-established KPO service providers and Information Technology Enabled Services (ITES) industries.
- Adoption of quality standards like ISO 9000 and Six Sigma.
- Multiple KPO business models.
And more.
What are these KPO business models?
The Indian KPO sector offers three knowledge process outsourcing models to suit specific client needs:
1. Captive business model
In a captive business model, a foreign company opens its centers in countries that supply operational efficiency with low costs and expert professionals. These captive centers cater exclusively to the parent company’s needs.
Since establishing captive centers in foreign countries requires considerable investment, it’s often followed by large organizations. Some firms with captive centers in India are McKinsey, Morgan Stanley, Goldman Sachs, etc.
2. Third-party service providers
Many small and large-scale firms operate as KPO service firms in India. In the event you don’t have the resources to begin your individual captive center, you may outsource your KPO processes to those third-party agencies.
Here’s how third-party service providers aid you:
- They cater to multiple clients, which adds to their domain expertise and specialization.
- Most third-party agencies work on a project basis. So you may employ these agencies as and when your firm has outsourcing needs.
- Some third-party service firms tailor their services to satisfy clients’ requirements.
Popular third-party service providers in India are Aranca, Evalueserve, and WNS.
3. Virtual captives
A virtual captive center is a hybrid model that gives features of captive centers and third-party service providers.
Here, a KPO firm sets up a captive center on behalf of your parent company, enduring all infrastructural, labor, and technological costs. You’ll have the opportunity to totally manage the outsourced processes while the seller maintains the venue for you.
Virtual captives are on the rise in India because of the advantages it offers, corresponding to:
- Cost transparency.
- Foreign firms retain complete control.
- Effortless set-up.
- Low associated risks.
Still not convinced?
Let’s take a look at the highest KPO services outsourced to India.
5 popular KPO services in India
In accordance with Deloitte, India is probably the most preferred country for outsourcing services like finance, media, energy, etc.
But that’s not all!
Listed below are the highest five KPO services in India:
1. Data evaluation and management
To make higher business decisions, it’s essential to remodel vital information on sales, customer satisfaction, market trends, etc., into actionable insights. But hiring analysts with apt domain knowledge in analytics, data management, etc., may very well be expensive in countries just like the US.
For instance, a knowledge analyst’s average annual salary in India (USD 4,448) is low in comparison with the common annual salary within the UK (USD 78,643) and the US (USD 87,000).
That’s why western firms outsource data analysis-based processes to India. KPO firms in India offer expert professionals with specialized knowledge and use advanced software like SPSS, SAS, etc., to satisfy client requirements.
2. Engineering services
Engineering Services Outsourcing (ESO) involves outsourcing engineering activities corresponding to product design, production, maintenance, etc.
India has a preferred engineering KPO sector because of the provision of expert engineers, low wage rates, and ready-made infrastructure like offices, engineering software, etc.
You too can enjoy faster turnarounds by adopting a 24-hour development cycle, as you’ll have two teams in numerous time zones working on projects concurrently. It will aid you reduce the time your products take to succeed in markets.
Major industries that profit from outsourcing engineering services to India include:
- Automobile industry.
- Aeronautical industry.
- Telecom industry.
- Industrial machinery manufacturing industry.
3. Financial service
You may outsource financial services like business model developments, company valuations, and evaluation to India.
For instance, Goldman Sachs established their captive center in Bangalore, which provides services like asset management, business research, equity operations, etc. Morgan Stanley has their very own fixed income and equity research centers in India.
Outsourcing your firm’s financial service to India will help hire qualified KPO professionals like MBA graduates or Chartered Financial Analysts at minimal costs. In consequence, you’ll have the opportunity to make good financial decisions, scale your organization higher, and offer quality services to your clients.
4. Legal services
Many legal process outsourcing firms hire dual-qualified Indian lawyers who’re experts in American and European laws. Which means that your outsourced legal team could be higher qualified than your in-house team.
Legal research, litigation support, drafting contracts, etc., are some commonly outsourced legal processes. Here’s how outsourcing legal services to India might help your enterprise:
- Ensures accuracy and faster results as most Indian legal process outsourcing firms use AI-powered legal management software to envision contract legalities.
- Offers 24-hour availability and night shifts to assist pick a shift suitable for your enterprise and make sure that your legal needs are met on time.
- Focuses in your projects higher than your in-house team as outsourcing firms work on a project basis, as an alternative of handling multiple tasks concurrently.
Furthermore, when you outsource services like accounts, software development, data evaluation, etc., to India, it makes more sense to outsource legal services too.
Indian legal teams may handle local employment laws, outsourcing contracts, etc., higher than your in-house team as they’re higher versed within the country’s laws.
5. Research and development (R&D)
Currently, India holds nearly one-third of the worldwide R&D sector, contributing around USD 18.3 billion. That is primarily because of the:
- Access to a big sample size.
- Quick data evaluation because of advanced technology and software.
- Massive expert workforce.
Pharma, healthcare, marketing, and biotechnology sectors are some popular industries outsourcing their R&D processes to India.
For instance, major firms just like the Mckinsey Knowledge Center, have outsourced their research processes to India.
Next, let’s take a have a look at the advantages of outsourcing to India.
5 key benefits of the KPO industry in India
The Indian KPO sector is booming due to its several benefits, corresponding to:
1. Large talent pool
Countries just like the UK, the USA, Australia, etc., are facing a shortage of skilled graduates in fields like R&D, healthcare, data evaluation, etc. In consequence, these countries have a small talent pool, resulting in high labor costs.
Meanwhile, India has a formidable educational infrastructure that produces around 1.4 million graduates annually. So outsourcing KPO services to India will aid you tap into an experienced, qualified, and trained workforce, helping you optimize your enterprise process.
2. Cost efficiency
Typically, developing countries like India have a low price of living, resulting in low minimum wages.
Other than an economical workforce, outsourcing knowledge-based services allow you to increase profitability by cutting costs corresponding to:
- Infrastructural costs.
- Technological and software investment.
- Specialized worker training.
For instance, pharmaceutical firms like AstraZeneca have relocated their clinical trials to India. This strategy helps them speed up the trial period with low production, infrastructural, and labor costs.
Try the average salary in India to learn more in regards to the salaries within the country.
3. Supportive government policies
The Indian government offers business-friendly policies and laws that help ease foreign firms’ entry into the country, making a positive outsourcing experience.
Some governmental policies that help promote the KPO industry in India are:
And more.
4. Data security
India offers several rules and regulations to legally protect your organization’s data, corresponding to:
A. IT Act, 2011
Under the IT Act, 2011, listed here are some rules Indian KPO firms should follow:
- Seek the client’s permission before sharing sensitive data like customer name, address, etc., with third parties.
- Receive written consent of concerned outsourcing firms before obtaining sensitive information from overseas firms.
- Ensure compliance with International Security Standard IS/ISO/IEC 27001.
B. National Cyber Security Policy, 2013
Listed below are some National Cyber Security Policy requirements:
- Designate a Chief Security Officer in firms to oversee cyber security.
- Develop legal frameworks that address sensitive areas in cloud computing, social media, and mobile computing.
- Address cyber security threats through National Critical Information Infrastructure Protection Centre (NCIIPC).
5. Round the clock availability
Outsourcing knowledge based services to India lets you offer 24-hour service to your clients.
How?
You may leverage the time difference by adopting an around-the-clock operational strategy. It will aid you finish your enterprise processes sooner than in countries just like the USA, UK, etc.
For instance, an American company outsourcing automobile engineering to India can send their Indian team tasks at the top of their (US) work hours. The Indian team can work and submit results at the top of their local work hours – which could be the subsequent work day within the US.
It’ll aid you gain a competitive edge over your rivals through an uninterrupted workflow.
However the Indian KPO industry comes with just a few drawbacks too. Let’s take a look at a few of them to aid you make an informed decision.
3 disadvantages of the KPO industry in India
Listed below are just a few challenges you could face while outsourcing KPO services to India:
1. Communication barriers
India’s language and cultural differences from its European in addition to American counterparts may affect communication, workflows, and repair quality.
Indian KPO firms may find it obscure the parent company’s work culture or specific colloquial terms. In such cases, it may well be difficult for outsourcing firms and KPO firms to sort out issues and convey instructions.
You may solve these issues by ensuring proper communication channels where each parties can openly communicate. Moreover, you may conduct team meetings between in-house and outsourced teams to know one another’s values in addition to culture.
2. Lack of control over outsourced processes
Time zone differences and physical distances may make it difficult for you to envision your outsourced team’s productivity. In consequence, you could find it difficult to:
- Ensure similar quality standards as your parent company.
- Optimize your outsourced processes as employees may slack off work when unsupervised.
Don’t worry!
These issues could be easily solved by adopting appropriate measures that help monitor your team’s performance and maintain consistent work quality.
3. Exchange rate fluctuations
Currency rate fluctuations may significantly impact your cost savings when outsourcing to foreign countries.
For instance, when you’re a foreign firm based out of the UK, the USA, or Poland, a rise within the Indian Rupee’s value together with rising labor costs can reduce your outsourcing profit.
In the event you think these issues could be worked out, let’s take a look at just a few top KPO firms that may aid you with outsourcing.
3 best KPO service providers in India
Outsourcing works best whenever you partner with KPO providers that understand your organization’s goals and quality metrics. Listed below are three KPO firms that may aid you outsource to India.
1. Ugam
Ugam is an analytics and technology services company with its headquarters in Mumbai. It supports fields like market research, retail, healthcare, etc.
Key KPO services
- Cloud and data engineering
- Data visualization.
- Research design and programming.
2. WNS Global Service
WNS Global Service was founded by British Airways in Mumbai. Spread across 60 delivery centers worldwide, WNS Limited works across financial, life sciences, and travel industries.
Key KPO services
- Human resource management.
- Regulatory compliance and risk management.
- Data analytics.
3. Conneqt Corp
Conneqt Corp, based in Bangalore, is a digital transformation KPO provider. It goals to arrange firms for the digital age by utilizing analytics, automation, and cognitive technology through its 21 delivery centers in India.
Key KPO services
- Digital finance services.
- B2B product support.
- Robotic process automation.
Wrapping up
An amazing knowledge pool, increased scalability, and tailor-made services make India a preferred KPO selection.
Although you could find some difficulty in performance monitoring, it’s nothing you may’t solve with an excellent outsourcing partner.
You may outsource processes like data management, legal services, R&D, etc., to rent highly-skilled experts the country offers.
So use this detailed guide to envision if India ticks all boxes and is the proper KPO destination for your enterprise.
