What are the differences between BPO and KPO?

What are the differences between BPO and KPO?

OAMPI Admin
June 23, 2014

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The abundance of proficient workforce and outsourcing firms offering call center services in the Philippines made the country a leading BPO (business process outsourcing) capital in the world. For these same reasons, BPO has become synonymous to call centers. What many people may not be aware of, however, is that the services outsourced to the country are not limited to minor tasks but also core processes that require expertise on certain fields.
The BPO boom in the Philippines has likewise opened opportunities for foreign companies to entrust important business aspects to highly skilled professionals in the country. This is when knowledge process outsourcing (KPO) evolved as a BPO sub-sect.
BPO and KPO both thrive on the improved services and expansion they provide to clients. BPO’s main selling point is that it allows companies to focus on their core duties while cutting down costs. KPO also does the same, but more than cost efficiency, it is the high-quality work that attracts foreign businesses to delegate important roles to the Philippine workforce, especially if skill is scarce or even unavailable in their local labor pool.
BPO and KPO are similar and interconnected in these ways, but they also have differences, particularly in these areas:

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1. Focus

BPO handles services that support the main processes of a company. KPO, on the other hand, takes care of core processes or advanced duties that are directly tied a company s core competencies.

2. Services offered

Aside from call center solutions, BPO companies usually provide data processing, data entry, email support, tech support, and account setup services. Common KPO solutions, on the other hand, are related to design, animation, insurance, legal work, healthcare, research, education, and biotechnology.

3. Market

The KPO sector caters to certain types of markets, and its services are geared towards specific types of customers. This is why KPO tools are often customized. The BPO industry caters to more types of businesses, and its services are characterized more by size rather than by what they focus on.

4. Hiring process

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Both BPO and KPO firms put careful attention to the qualifications and attitude of those who aspire to be part of the industry, but KPOs are more meticulous when it comes to the skills of the people they hire.

Since KPO services are industry-specific, candidates must be highly proficient in their chosen fields. BPOs also benefit from professionals with specialized skills, but there is a high preference for jacks-of-all-trades who can perform a wider range of tasks.

BPO in the Philippines has experienced immense growth over the decade, and KPO seems to be on its way to trailblazer status as well. KPO may have emerged from the larger industry of BPO, but it may one day stand alone as an independent, bigger sect if the Filipino workforce and labor cost remain competent.

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