Knowledge process outsourcing (KPO) is an emerging part of outsourcing plans of many financial firms. It is a segment with significant potential for growth, but the successful execution of outsourcing in this segment requires a modification to the traditional approach taken for BPO/ITO outsourcing engagements. The greatest benefits of a KPO engagement are derived from accelerated revenue growth achieved by expanding access to scarce skill sets that can create differentiation. The engagement should release senior onshore staff to carry out a higher proportion of high-value-added tasks, and new products can be developed that might not have received funding with an onshore model.

Author:
Andrew Houston, CFA, is a co-founder of Amba Research. He was previously Head of Asia Regional Research at Jardine Fleming Securities/JPMorgan and Asia Equities Strategist. Andrew has an MBA from London Business School.