“Knowledge Process Outsourcing,” or KPO, happens when an organization outsources knowledge and/or information work to another company. This isn’t like outsourcing call centers or basic tech support; we’re talking R&D people, lawyers, talent development specialists, web designers, doctors, accountants, investment analysts…high-level stuff that requires an advanced level of education and/or skill, but doesn’t necessarily require someone to be right there, on site, in the flesh, at all times. These folks might be located in close physical proximity to where we work, but more and more we’re seeing KPO services being offered from places like Sri Lanka and Chile. It’s a multi-billion dollar industry and has been for over a decade, so we really can’t blame knowledge and information workers for wanting to get in on the action.
Why would we do this? Well, there are several reasons. First, these types of people tend to be expensive to hire internally and train, so sometimes companies opt to outsource...not necessarily to save a buck, but to get their hands on top talent that they might not otherwise be able to get.
Second, since knowledge and information work are so specialized, there are not a whole lot of experts running around out there. Outsourcing to a company that specializes in what we need can help take care of that labor shortage problem.
And third, knowledge and information jobs add value to an organization’s bottom line. Outsourced experts are still experts, right? So if their ideas end up being awesome for our company, then we get to reap the financial rewards, even if they’re not actual employees of our firm.