Key Aspects of KPO

The objective must be to deliver world-class quality at often even improved service levels. Successful KPOs measure quality and get feedback for each individual project sometimes as small as a few thousand US dollars. In-depth expertise is required as well. For example, customers require Junior Analysts to understand the market dynamics in Oncology when creating a valuation model for a pharmaceutical company active in Oncology. The expertise required can be in industry verticals, functional areas (e.g. Risk Management) or in geographic knowledge (e.g. understanding mid-sized German companies).

The 'Jack in all Trades' approach is not likely to work in KPO. The work at KPO requires domain expertise and therefore the culture and customer requirement of KPOs and BPOs vary significantly. Hence, it is important that KPOs develop expertise in few areas and excel in them. There is a reason for why Western Law Firms, for example, do not offer R&D and Insurance Claims Analytics and Call Center Operations at the same time. KPO companies have the unique opportunity to create new markets, since their price points allow them to offer new types of services simply not available in high-wage countries for cost reasons.

However, buyers who offer Innovative services will differentiate successful KPO companies from players who offer cost arbitrage and will give them a sustainable place in the world markets. Selling KPO services in the West will require a Western sales force and significant branding efforts in the medium-term. As of now, tapping the SME potential and selling into Continental Europe requires local support. Successful branding will be another necessary ingredient to generate a sufficient 'pull' in the market.

One of the Best practices in KPO is the huge investment (about 15% of the total work time) and developing skills sets such as, functional skills, cross-cultural skills, as well as managerial skills. Recruiting the right people is critical and requires significant hiring, building brand equity at the right schools and in the open market. Successful players can attract better people. The interview-to-offer ratios of successful players are about 25:1 and the offer acceptance rates are as high as 80%. Developing professionals faster and better than anyone else will translate directly into better quality, productivity, retention and success in the market place.