Demand for knowledge process outsourcing seen to rise

MANILA, Philippines - The demand for knowledge process outsourcing (KPO) is increasing as majority of the industry players said they will be hiring more workers in the coming months, a survey conducted by the Business Processing Association of the Philippines (BPA/P) and Outsource2–Philippines (O2P) showed.

Almost 60 percent of respondents providing KPO said their firms will increase their employee base between 11 percent and 200 percent this year, while 10 percent will maintain their current base and 29 percent will expand from less than five percent to 10 percent.

KPO is “an extension of BPO involving greater business complexity and focusing on knowledge-intense business processes that require significant domain expertise. Knowledge workers delivering these services are highly educated and trained, and trusted to make important decisions on behalf of their clients.”

The respondents were optimistic about industry growth. When asked about future prospects for KPO delivery from the Philippines, 37 percent of the respondents said the prospects were good, 44 percent very good and 13 percent said it is excellent.

Overall, 60 percent of respondents to the survey said that their firms provide KPO services, and almost half of those respondents said between 50 percent and 100 percent of the services they provide are considered KPO.

The survey was conducted from August 6-24. The type of KPO services offered by respondents’ firms varied widely, and included advertising and Web 2.0 services, animation, back office KPO such as procurement and supply chain management, business intelligence, and financial and legal KPO.

North America is the largest market for KPO services providers, with 59 percent of respondents indicating their clients are primarily located in that region. Asia was the second largest market, with 46 percent and the EU was third with 37 percent.

The tight labor market was seen as the biggest threat to KPO sectors by 53 percent of respondents providing KPO services. Retaining knowledge workers was next at 45 percent. Complex training requirements was a barrier to growth according to 33 percent.

 Meanwhile, on business continuity, most respondents reported minimal downtime in terms of business continuity, with 64 percent indicating zero or less than one day of downtime in the previous 12 months.