Product Type: Market Research Report
Published by: Datamonitor
Published: April 2009
Product Code: R313-50486Description Introduction
The maturing knowledge process outsourcing (KPO) market represents a significant growth opportunity for vendors. As well as defining KPO, in relation to the broader outsourcing market, this report will assess how vendors can best position their offerings in order to take full advantage of the sector's blossoming potential.
Scope- This report provides a definition of knowledge process outsourcing and illustrates the broad range of services offered by KPO vendors;
- It describes the development of the KPO market, from its foundations in the late 1990s, through a period of hype to its current state of maturity;
- The report contains in-depth analysis of the leading KPO vendors, from global outsourcing giants to niche KPO specialists;
- It also looks at how shifts in sourcing models are causing vendors to look at other low-cost regions, in addition to India, as delivery locations.
Highlights
Knowledge process outsourcing (KPO) represents the next step in the evolutionary cycle of the outsourcing market. Just as the success of IT outsourcing paved the way for the growth of business process outsourcing (BPO), so the growing maturity of the BPO industry has led to the development of KPO.
The origins of the KPO industry can be traced back to the late 1990s, but it was not until 2003 that the market really began to take off. KPO was the subject of a large amount of hype which led many within the industry to make bold claims about how fast it would grow. The intensity of this hype has gradually died away as the market has matured.
Unlike the established horizontal BPO areas, such as F&A and HRO, which focus on non-core aspects of the client's business, KPO involves the outsourcing of core business functions. Clients are often reluctant to relinquish control over such areas, with quality and security being the major areas of concern.
Reasons to Purchase- Defines the KPO market, and illustrates how it fits into the broader business process outsourcing market;
- Provides a detailed analysis of the current state of the KPO market;
- Offers recommendations to vendors looking to grow their presence in the KPO market.
Table of Contents - Overview
- Catalyst
- Summary
- Key Messages
- KPO represents the next stage in the evolution of the business process outsourcing market
- The KPO market continues to grow in maturity
- Offshore delivery has remained a constant feature of KPO
- Clients have concerns over the outsourcing of core business functions
- The KPO market remains extremely fragmented
- Table of Contents
- Table of figures
- Table of tables
- Market opportunity
- Defining Knowledge Process Outsourcing
- Definitions of KPO include a broad range of services
- Contract signings and M&A activity illustrate growing maturity of KPO
- KPO acquisition activity
- Many KPO vendors focus on specific vertical markets
- The financial services industry is an ideal market for KPO
- The current recession represents a major challenge for providers focused on the financial services sector
- KPO vendors aim to go beyond cost arbitrage
- Service Evolution
- The Origins of the KPO Market
- The KPO hype begins to grow
- Growing maturity opens up significant opportunities
- Offshore delivery has remained a constant feature of KPO
- India remains the pre-eminent offshore location
- Multi-shoring models are gaining traction
- Evaluating emerging KPO delivery locations
- China
- Philippines
- Sri Lanka
- Hungary and the Czech Republic
- Canada
- Mexico and Brazil
- Customer Impact
- Clients have concerns over the outsourcing of core functions
- Vendors can take steps to alleviate client concerns
- KPO offers clients a range of potential benefits
- Vendors place focus on 'intellectual arbitrage'
- Large organizations consume the most knowledge-based services
- Drivers behind dominance of KPO industry by large corporations
- Breaking into the mid-market is a challenge for many vendors
- Competitive Landscape
- Global giants have struggled to establish themselves in the KPO market
- India's leading outsourcers have well-established KPO offerings
- The leading pure-play BPO vendors have strong presence in the KPO market
- KPO specialists are able to target specific industries and service areas
- Captive operations remain part of the KPO landscape
- Go to Market
- Scale is of lesser importance in KPO than BPO
- Size does bring advantages
- Niche providers can outperform industry giants
- Technology as an enabler for KPO
- Potential impact of the current recession on the KPO industry
- Vendors may need to look beyond financial services
- Recommendations
- Investigate potential for growth in vertical markets outside of financial services
- Look to develop a multi-shore delivery model
- Use multi-shore delivery model to target emerging geographic markets
- Recognize that strong client relationships are vital to the success of KPO deals
- APPENDIX
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: India's Top 10 BPO Providers, 2007-2008
- Table 2: Acquisitions of KPO Vendors Since 2006
- Table 3: Assessment of emerging KPO locations
- Table 4: Analysis of key KPO vendors by service line
- List of Figures
- Figure 1: Rate the importance of the following factors in your decision to enter into a BPO contract (1 - Least Important; 4 - Most Important)
- Figure 2: Total Contract Value of Outsourcing Deals ($m) against Number of Contracts, January 2008 to February 2009
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