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Not just BPO but KPO

Not just BPO – the rise of KPO

Changes are happening quickly in the BPO world. In order to not be left behind it is crucial that the Philippines pay close attention to trends that have the potential to alter the industry. If the country fails to keep pace with the changing landscape, it could well find its economic growth stagnating further.

As the demand for non-voice services continues to rise, there is a growing need for what has been described as Knowledge Process Outsourcing (KPO). KPO is defined as the outsourcing of core data-based business activities to another company, which plays an important role in a company’s value chain by providing highly specific expertise.

While obviously aimed at cutting costs, KPO is also a value adding activity. Core processes served by the KPO sector are wide ranging and include:

  • Market research

  • Fraud analytics

  • Equity research and investment banking

  • Insurance and actuarial

  • Engineering services

  • Web development

  • Data integration

  • Project management

  • Research and development

  • Medical transcript preparation and legal processes

The KPO industry is already seeing strong growth in India and Europe, where it has been easier to find the highly qualified employees needed to work in this new industry. Globally, from 2013-2018, the KPO market is expected to grow at a CAGR of 23.12 percent.

Currently in the Philippines, call center and voice operations make up about two-thirds of the BPO sector, however the government has recognized the trend moving towards KPO. As such, it is attempting to create an attractive investment environment, and is working with companies in order to identify key areas of specialization and training needed to create a competitive workforce. As a result, KPO’s share of the market is steadily gaining ground in the country and some of the world’s largest KPO service providers, such as J.P. Morgan and AIG, are already operating in the country.

If government reforms continue, the future of KPO and BPO in the country looks bright. This feeling has been reiterated in the highest levels of Philippine government – at a recent meeting, President Aquino stated, “We are determined to prove to the world an important truth about our country: In the Philippines you will find a place where the government is focused on investing on its greatest resource, its people; a nation where entrepreneurs are viewed as partners, and where everyone works to prove that, for tourists and businesses alike

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