Let us now look at the head-to-head differences between BPO and KPO.
Table Of Contents
Difference Between BPO vs KPO
BPO vs. KPO – These days, outsourcing is used by almost all sectors, multinational companies, all industries. It is hiring a third-party service provider for various services and solutions. Many services like marketing, operations, human resources, technical support, customer support, etc. They are outsourced to save cost, time, and workforce by companies using KPO and BPO.
- BPO is Business Process Outsourcing. It is referred to as the outsourcing of non-primary activities to the third-party service provider for service to decrease the company's cost and increase productivity and efficiency of company activities of BPO are call center, human resources training, recruitment, technical support, etc.
- On the other hand, KPO is a Knowledge Process Outsourcing. It is referred to as outsourcing highly skilled personnel as it transfers or assigns knowledge plus processes related to another company. For example, KPO is data analytics, investment research services, legal process, marketing research analysis, etc.
This article will look at the differences between BPO and KPO.
What is Business Process Outsourcing (BPO)?
BPO stands for Business Process Outsourcing. It can be defined as outsourcing non-primary activities to a third-party service provider or service to decrease costs and increase productivity and efficiency. Therefore, BPO is the outsourcing of mainly processes and functions.
BPO is of three types. They are as follows: -
- On-shore BPO – When a company outsources services to another company within the country.
- Nearshore BPO – When a company outsources services to another company in a nearby country.
- Offshore BPO – When the company does outsourcing services to another company located overseas.
BPO can handle the below activities: -
- Human resources – training, recruitment, payroll processing.
- Customer care – call center, help desk
- Technical support
- Technical solutions
- Finance and accounting services
- Website services – website maintenance, updating, etc.
What is Knowledge Process Outsourcing (KPO)?
KPO stands for Knowledge Process Outsourcing. It refers to outsourcing highly skilled personnel to transfer or assign knowledge and processes to another company. The company hires other outsourcing companies that can fulfill a company's requirements. It can be in the same country, or the main overseas intention is to minimize its cost. It performs a task requiring high skill with depth knowledge, expertise, and interpretation power.
KPO can handle the below activities: -
- Investment research activities
- Market research activities
- Data analytics
- Business research services
- Legal process outsourcing
BPO vs KPO Infographics
Here, we provide you with the top 10 differences between BPO and KPO: -
BPO vs KPO – Key Differences
The key differences between BPO vs. KPO are as follows: -
- BPO stands for Business Process Outsourcing. In contrast, KPO stands for Knowledge Process Outsourcing.
- BPO can be defined as outsourcing non-primary activities to the third-party service provider for service to decrease the company's cost and increase productivity and efficiency. At the same time, KPO refers to outsourcing highly skilled personnel to transfer or assign knowledge and processes related to another company.
- BPOs are human resources, customer care, technical support, technical solutions, finance and accounting services, and website services. In addition, KPO offers investment research, market research, data analytics, business research services, and legal process outsourcing.
- BPO is based on rules. Whereas, KPO is based on judgment.
- For BPO, good communication skills staff is required. For KPO, qualified professional staff is required.
- BPO focuses on low-level processes. Whereas, KPO focuses on high-level processes.
- In BPO, low coordination and collaboration are needed. Whereas in KPO, high coordination and cooperation are required.
- BPO is less complex. In comparison, KPO is much more complicated.
- BPO needs process expertise while KPO involves knowledge and expertise.
- BPO is volume-driven. Whereas, KPO is insights-driven.
- BPO relies on cost arbitrage. On the other hand, KPO relies on knowledge arbitrage.
- The BPO process is pre-defined. Conversely, KPO requires application and understanding of business.
BPO vs KPO Head-to-Head Differences
| Basis | BPO | KPO |
|---|---|---|
| 1. Full-Form | Business Process Outsourcing. | Business Process Outsourcing. |
| 2. Definition | BPO can be defined as outsourcing non-primary activities to a third-party service provider to decrease the company’s cost and increase productivity and efficiency. | BPO can be defined as outsourcing non-primary activities to a third-party service provider to decrease the company’s cost and increase productivity and efficiency. |
| 3. Based on | Rules. | Rules. |
| 4. Degree of Complexity | BPO is less complex. | BPO is less complex. |
| 5. Requirement | It needs process expertise. | It needs process expertise. |
| 6. Driving force | Volume-driven. | Volume-driven. |
| 7. Coordination and Collaboration | Low. | Low. |
| 8. Talent Required | Good communication skills. | Good communication skills. |
| 9. Focus on | Low-level process. | Low-level process. |
| 10. Services | Human resources, customer care, technical support, technical solutions, finance and accounting services, and website services. | Human resources, customer care, technical support, technical solutions, finance and accounting services, and website services. |
Conclusion
Outsourcing is in practice across industries. Outsourcing is hiring a third-party service provider for various services and solutions. Many services like marketing, operations, human resources, technical support, customer support, etc. They are outsourced to save cost, time, and human resources by companies using KPO and BPO.
BPO refers to outsourcing non-primary activities to the third-party service provider for service to decrease the company's cost and increase productivity and efficiency. On the other hand, KPO refers to outsourcing highly skilled personnel to transfer or assign knowledge and processes to another company. BPOs are human resources activities, customer care-related activities, technical support, technical solutions, finance and accounting services, website services offered by KPOs, investment research act activities, market research activities, data analytics, business research services, and legal process outsourcing. KPOs and BPOs are needed by companies based on the need to choose them.
KPO and BPO work in the B2B environment. The company's intention of hiring BPO is cost arbitrage, and KPO relies on knowledge arbitrage. KPO is an extended version of BPO. But now, BPO is losing its existence. Nowadays, these outsourcing companies are providing KPO and BPO services simultaneously to the company.
