IT- BPO firms take KPO route to raise profits
By siliconindia   |   Saturday, 12 January 2008, 17:29 IST
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New Delhi: With Nasscom estimating that the Knowledge Process Outsourcing (KPO) industry is poised for a 45 percent per annum growth, leading business process outsourcing (BPO) firms such as Infosys BPO, Zensar, TCS, Patni are fast growing their KPO business. KPO business is expected to touch $17 billion by 2010, reported Business Standard. Current KPO hotspots are engineering and design, basic data search, integration and management and biotech and pharma. Moreover, the Indian outsourcing industry is facing a rising rupee that is eating into their rupee profit margins, says Boston Consulting Group. Some analysts say that increasing the percentage of KPO work in their BPO businesses is a good way to augment the balance sheets. "Creating, protecting and monetizing knowledge is becoming very critical with the global economy turning increasingly knowledge and information intensive. KPO is more knowledge driven, while BPO is more of process expertise, KPO is more of domain expertise," explains Anish Zaveri, Associate Director, KPMG. For instance, Infosys BPO, which began its foray into knowledge services two years back, receives nine percent of its revenues knowledge services. Patni's BPO too is growing its knowledge services in 2008. "We have begun to handle complex outsourced processes like actuarial services and financial analytics for clients and we have been buoyed by the growth witnessed," says Sanjiv Kapur, Senior VP and Head (BPO), Patni. He adds, "BPO will always be our support business, but knowledge based process in the financial, insurance and compliance services will be the money spinner for Patni BPO." However, niche KPO firms are already battling high attrition of their employees to companies like Infosys and Patni. In the face of a stiff competition, the KPO industry is also facing a skill-set shortage that is worse than the shortage faced by the BPO industry.

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