Knowledge Process Outsourcing (KPO) Explained

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Outsourcing is one of the most valuable, and also one of the most misunderstood, options available for businesses today. Outsourcing can save you 50-70% on labor costs, and knowledge process outsourcing (KPO), from R&D to finance consultants, is just one of the many ways you can save on labor costs with a professional offshore team.

In this article, we’ll examine the meaning of KPO, its pros and cons, and how your business might benefit from offshoring these roles and responsibilities.

What is KPO? Knowledge process outsourcing (KPO) refers to a business outsourcing activities that include highly technical tasks or require experts who have advanced knowledge in their field. These professionals provide insights based on the data they review. Types of KPO include:

Analytics and Insights

When businesses are looking for solutions to problems, they often hire a KPO expert to help with data analytics. The expert is then able to provide new insights about the issues, enabling the business to create effective solutions.


When a business is unsure of its market or has questions about the best path forward, they use KPO services to provide relevant and highly accurate research. The business can then use the new information to make decisions about its business strategy and target market.

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Reporting and Performance Management

This type of KPO involves a management consulting expert coming in to measure performance. The expert offers advice about how to improve performance, and helps create a plan for how to achieve these goals.

Data Management

This type of KPO means the employee provides the best solutions for data entry, retrieval, sharing, and management.

Real-World Knowledge Process Outsourcing Examples

Many different industries use outsourced company employees to provide the special skills they require, and these services include:

What Other Types of Outsourcing Are Available?

KPO process outsourcing is just one piece of the outsourcing puzzle, however. If your business needs additional IT support, for example, there are other options.

Business Process Outsourcing (BPO)

If your business needs assistance handling its everyday activities, Business Process Outsourcing provides a simple solution. Many businesses use a KPO firm to take care of tasks like payroll, accounting, customer service, and sales.

Information Technology Outsourcing (ITO)

ITO is the most commonly used service within the KPO industry. As IT services require employees with a high level of specific technical skills, it can be a challenge to find skilled employees to fill these gaps. Outsourced ITO workers handle such tasks as software development, tech support, website maintenance, and cybersecurity.

Recruitment Process Outsourcing (RPO)

If you don’t have an in-house team to handle recruiting, you may choose to use an RPO company. They take care of the entire recruiting process, finding qualified candidates for your business. These tasks may include job postings, interviews, onboarding, and admin duties.

What is KPO

What Are the Main Advantages of Knowledge Process Outsourcing?

Let’s examine the pros and cons, and why KPO is used by so many businesses.

Decrease Costs

The biggest advantage many businesses notice when using KPO is that it is very cost-effective. Skilled employees for roles do not come cheap. Using KPO can decrease a business’s labor costs by up to two-thirds. It also helps reduce operational costs and overhead, since the employees are externally located.

Find Skilled Employees More Easily

Knowledge process outsourcing is not just about cutting costs. It also helps businesses fill gaps in their teams when workers with specialized knowledge are in short supply. Millions of employees left their jobs during the Covid-19 pandemic, and as a result there is still an ongoing labor shortage.

Businesses struggle to attract employees with the knowledge and expertise they desperately need.

It’s expensive and time-consuming to find and train new employees for skilled roles. Top KPO companies provide employees who are already trained and ready to begin work, and have world-class experience in their field. The best KPO partners have hundreds of highly knowledgeable workers with excellent English-language skills.

Knowledge Process Outsourcing
Source: Outsource Accelerator

Reduce Employee Turnover

Many workers have quit their jobs, retired, or switched careers over the past few years. It’s now more difficult and expensive to find and retain employees, and KPO helps solve this dilemma. Outsourced employees consider these jobs more prestigious than American workers.

They are likely to remain in the same role for much longer and have higher job satisfaction, improving your business’s employee retention rates.

Expand Into New Markets

Growing your business in other countries is a huge challenge. You need to be aware of local trends, culture, and potential risks. A KPO expert can help you navigate the legal language and cultural barriers of a new market. They provide knowledge and insight into the region and its people.

What Are Some Potential Disadvantages of Knowledge Process Outsourcing?

The top KPO companies have perfected their partnership process and offer the highest quality employees. The potential risks surrounding KPO stem from using untrustworthy companies.

Less reputable companies have seen an opportunity to get into the growing KPO industry, but lack the knowledge and training to provide high-quality services. Businesses that work with these companies not only face quality challenges, but may also deal with risks to their intellectual property. These pitfalls highlight the importance of choosing a trusted provider.

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When selecting the best KPO company, make sure to check reviews and check into Outsource Accelerator for additional information. 

Some of the possible downsides of KPO include:

Lack of Control or Transparency

Your KPO services provider should work closely with your business and enable you to have control over all aspects of the process. If the company can’t address basic concerns you raise, or they don’t want you communicating with your KPO employees, it’s a huge red flag. They probably won’t be providing a high caliber of work.

Poor English Language Skills

If your customer base is located in North America, ensure that you choose a KPO provider with employees who have a high level of English language competency. Low-quality KPO companies may not focus on employees with a deep understanding of spoken and written English.

Low Skill Level

Disreputable KPO companies often do not provide adequate training for their employees. As a result, the employees are not able to provide quality products and services. Again, look for companies with stellar reputations and ask detailed questions about your relevant field.

KPO process outsourcing

Where Can I Find the Best Knowledge Process Outsourcing Services?

Remote Employee is one of the top KPO companies in the industry. We are based in the Philippines, and all our employees have impeccable English-language skills.

We provide highly trained employees for a variety of industries, providing expertise in the KPO sector. No matter what type of knowledge and expertise you need, Remote Employee has you covered.

Interview and select the employees that best fit the needs of your business, change your team at any time, and maintain all normal business processes. We only recommend the best fit from our hiring pool.

To learn more about your outsourcing options, contact us online.

Featured Photo Source: Pexels

Author Bio: Ruffy Galang

CEO and Co-Founder, Remote Employee

Ruffy Galang is a dynamic and forward-thinking leader in the remote work industry, currently serving as the CEO and Co-Founder of Remote Employee. With his leadership beginning in May 2022, Galang has been instrumental in steering the company towards innovative solutions for remote work challenges. His expertise in business development and management, honed over several years, has been pivotal in Remote Employee's growth and success.

In addition to his role at Remote Employee, Ruffy is the Co-Founder and Managing Partner at CORE Solutions since June 2018.

Before founding Remote Employee, Galang had an impressive career at Cloudstaff, where he demonstrated his prowess in business development. He climbed the ranks from Account Manager to Vice President of Business Development, a position he held from January 2020 to October 2021.

With a Master's degree in Business Administration and Management and a Bachelor of Science in Information Technology from Angeles University Foundation, Galang’s solid educational grounding has provided him with a deep understanding of both the technical and managerial aspects of running a successful business in today's digital world.

Ruffy's unique perspective on business is also shaped by his diverse cultural background. Having grown up in the United States until graduating high school, he then moved to the Philippines to pursue his college education. This bicultural experience has equipped him with an in-depth understanding of both Western and Philippine cultures, enabling him to effectively assist clients in creating successful offshore teams that are culturally attuned and efficient.