KPO refers to process of outsourcing knowledge intensive tasks and functions and
is a dominant
player in this market with 70% market share. Indian KPO players offer market
research, data analytics, legal services, content and publishing services,
pharma data processing etc. Evalueserve estimates Global KPO industry to grow
to $ 17 billion by 2014, from current $9 billion in 2011 and is expected to
grow at an annual rate of approximately 24% for the next four years (2010-14). India
Chart: 1 Global KPO Industry Market Size and Number of FTEs (2006-2014)
KPO firms in
would employ approximately 205,000 professionals generating revenue of $ 10
billion by 2014 from current $ 5.95 billion and 135,000 professionals in 2011.
Evalueserve predicted Global KPO market will reach $17 billion revenue by 2011
in 2005. KPO market slowed down due to the Global financial crisis. With tough
competition form Latin American, Eastern European and some Asia Pacific countries,
India KPO market is expected to grow by 20% annually lower than KPO industry
annual growth rate of 24%. But India
is expected to retain its dominant position in near future. India
KPO Industry Market Size and Number of FTEs (2006-2014) India
NASSCOM estimates on KPO MarketAccording to Nasscom-Crisil study, knowledge services outsourcing industry in
ASSOCHAM estimates on KPO Market
The Associated Chambers of Commerce and Industry of India has projected KPO industry’s size growing to US$ 8 billion in 2011 and 10 billion mark by 2012 with a growth rate between 25-27%. Currently, the KPO size is estimated to be around US$ 5.7 billion and the sector has grown at around 15-17% in last few years. According to ASSOCHAM, domestic KPO industry is facing stiff competition from countries like
China, Poland and as these are emerging
strong contenders. Hungary
in KPO India
Indian KPOs have significant competitive advantages in terms of low-cost offerings, skilled manpower with sales and marketing capabilities, domain expertise and knowledge of regulatory compliances. Highly educated professionals in engineering, medicine, management, accountancy, company secretary, legal fraternity are available in
The Indian KPO providers offer a range of solutions to various industry
segments such as FMCG, engineering, automobile, telecom, R&D, BFSI, etc.
Specialized professionals with specific domain knowledge, problem solving and analytical
skills and experience are required who demand 15-20% higher salaries that BPO
With tight SLAs and quality services, Indian KPO vendors deal with confidential data, including financial data, treasury and cash management functions and investment portfolio decisions. Indian KPO Vendors not only ensure safety of confidential client data but also have better work tools and processes, more sophisticated client centricity, higher billing rates and more domain focused organizations.
The KPO industry was affected by Global financial crisis that caused significant slow down in revenues and presently KPO industry is maturing. The range of services has expanded from initial research and analytics. And as the market has developed, variety of offerings such as legal process outsourcing and clinical trial management are included. KPO industry is also facing the challenge of adequate talent availability and high attrition rate among young professionals. Skills shortages particularly relating to pharma clinical trials etc are major concern in India KPO. Wage inflation is another cause as
is loosing out on the lower
cost advantage. India
Investments are to be made in developing the infrastructure, buying tools and technologies, develop risk management and to protect confidential client data. The KPO market is expected to grow significantly in coming five years and so is competition from other countries, In Asia Pacific,
Philippines and are
becoming viable destinations particularly for Pharma, healthcare and Accounting
related KPO respectively. Sri Lanka Russia
and Eastern European countries like Poland,
are also emerging as attractive KPO destinations for engineering and design
related KPO. Near shoring is advantageous for Latin American countries as they
are near to US and Hungary .
Current European debt crisis and US Economic slowdown are causing concern for India KPO industry. Global Financial crisis in 2008 had a drastic affect on the industry where clients cut down spend and KPO industry slowed down and missed its revenue targets. India KPO vendors are gearing up to such a scenario with reducing prices, improving the skill sets, investing in new technologies and looking for high end work that is going to help the clients to overcome slowdown and crisis. Particularly there is focus on improving and acquiring the Pharma, healthcare and life sciences related skills and professionals as significant investments are announced by US and other governments.
India KPO Vendors understand the challenges that exist and they are developing the necessary strategies and acquiring the relevant skills to overcome short term challenges and significantly grow revenues in long term.