Tue. May 21st, 2024

Difference between BPO and KPO

With the customer-centric approach of new brands, every enterprise wants to invest to enhance customer satisfaction. Outsourcing the customer service segment is one of the major investments every brand makes. Outsourcing comes in two main types: BPO (Business Process Outsourcing) and KPO (Knowledge Process Outsourcing).

Difference between BPO and KPO
Difference between BPO and KPO

Generally, BPO and KPO, these two terms are sometimes used interchangeably. But there are distinct differences between them in terms of the complexity of tasks they handle and the level of expertise required, which are essential to grasping effective outsourcing strategies

So in today’s article “Difference between BPO and KPO”, we will delve deep into  “BPO” and “KPO” and will understand the major differences between both.

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Without further ado let’s start the topic “Difference between BPO and KPO”

Difference between BPO and KPO

Before diving deep into the difference, let’s first understand BPO and KPO with some general definitions.

What is BPO?

BPO stands for ” Business Process outsourcing “. BPO is commonly known as a call center or contact center and can be best described as :

” The process of outsourcing a business to a 3 party vendor”.

It simply means hiring a call center to handle certain business tasks like customer service, collection, retention, verification, etc. Outsourcing the business to a BPO helps brands focus on their other business activities (sales, revenue, operations, etc.) while letting dedicated specialists handle different parts of their operations.

 

Difference between BPO and KPO
Difference between BPO and KPO

 

BPO aims to streamline operations, reduce costs, and improve efficiency by leveraging external expertise, often through offshore or nearshore locations.

Now let’s understand What is KPO.

What is KPO?

KPO stands for ” Knowledge process outsourcing “. As the name refers, when a brand outsources its knowledge-related business, like – data analysis, insights, gathering, or other information-related business to a BPO or contact center, is known as a KPO.

Likewise, BPO, KPO is a form of outsourcing, but it involves handling knowledge-intensive tasks, such as research, analysis, and decision-making processes.

It leverages knowledge-based resources to deliver strategic insights, innovation, and high-value outcomes. KPO plays a pivotal role in supporting decision-making processes and driving competitive advantage for businesses across various industries.

After understanding the basic definition of BPO and KPO, let’s now understand the Difference between BPO and KPO on 5 common yet important parameters.

1. Services Offered :

  • As mentioned above, BPO offers business outsourcing services for sales, collection, retention, customer service, Tech Support, etc.
  • On the other hand, KPOs are specific to knowledge-based businesses such as research, legal, analytics, etc.

2. Level of  Expertise :

  • BPO often required only basic hiring criteria of graduation or 12th pass and no specific expertise in industry or domain. A BPO or call center representative has to go for basic process training.
  • While KPO demands specific expertise in a domain or a higher level of expertise as compared to BPO. In addition to the specialized knowledge, some KPOs have additional hiring criteria of analytical thinking and problem-solving skills.

3. Focus Industry :

  • BPO or call centers often provide services to almost all industries like telecom, customer service, finance, sales etc.
  • KPOs are specific to a few industries like healthcare, legal, market research or finance.

4. Data Security :

Irrespective of the outsourcing option, data security is one of the major challenges in general.

  • Often BPO handles nonsensitive data. 
  • KPO  handles sensitive or proprietary information requiring confidentiality and security measures.

5. Final Outcome  :

  • The final aim of outsourcing a business to a BPO or call center is to reduce costs and streamline the operations function.
  • While KPO aims for analysis, insights, recommendation, and strategic decision support.

Now, let’s explore the variance through the table provided.

Parameter BPO KPO
Abbreviation Business Process Outsourcing Knowledge Process Outsourcing
Expertise Level Basic Skills and Training Specialize expertise
Client Engagement Negligible High level
Data Sensitivity Low or Medium High
Services Offered Customer Service, Sales, Retention, Collection etc. Market Research, Legal , Analysis, Insights etc.
Nature of Work Easy and Recurring Complex and Challenging
Market Demand High In Volume Low in Volume

Conclusion :

After reviewing the differences, we can conclude that while both BPO and KPO are common forms of outsourcing a business, they have distinct functions, serve specific tasks, and provide different benefits to the businesses.

BPO primarily handles recurring and routine tasks and mainly focuses on operational efficiency and cost reduction, whereas KPO emphasizes specialized knowledge-intensive tasks, providing strategic insights and recommendations.

FAQs

Now let’s answer some common FAQs of “Difference between BPO and KPO” ?

1. How is BPO different from KPO?

Ans: BPO and KPO generally offer the same purpose of outsourcing a business but BPO offers its services in customer service, sales, collection, retention, etc. while KPO primarily focuses on outsourcing business like legal, account, analysis, and strategic insights etc.

2. BPO vs KPO What is the difference?

Ans: As mentioned above 3 common differences between BPO and KPO

  • Services offered to industries.
  • Level of Expertise
  • Final Outcome

3. What is KPO in simple words?

Ans: KPO stands for Knowledge process outsourcing. KPO involves outsourcing specialized tasks requiring advanced skills and expertise, such as research, analytics, and consultancy services.

 

I hope you like the article “Difference between BPO and KPO”. If you have any questions or suggestions you can reach me via callcentertalks26@gmail.com

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