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Knowledge Process Offshoring
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by R. Dogra, A. Chaudhary, A. Bagla, A. Khurana 36 Global Workplace

Published by Evalueserve

Knowledge Process Offshoring (KPO) – A ‘Win-Win’ Situation

Executive Summary

Indian KPO sector, with revenues of 0.72 billion in 2003, accounted for 56% of the global KPO sector. According to Evalueserve, share of Indian KPO sector is expected to increase to 71% of the Global KPO sector, with revenues of USD 12 billion, by 2010.

Evalueserve estimates that the Indian KPO market is expected to grow at a CAGR of 49.5 percent between 2003 and 2010, compared to a CAGR of 30.6 percent for Indian BPO market, and a CAGR of 44.5 percent for global KPO market over the same period.

The service sector accounted for 51 percent of India’s GDP in 2003, much higher than 28 percent in 1950 and also one of the highest among the developing economies. Evalueserve estimates that the share of service sector is expected to rise to 57 percent in 2010 and the phenomenal growth of IT software and services sector has remained one of the major components of the Indian service sector growth.

Outsourcing of high-end jobs is a win-win situation for both the end client and the KPO vendor. Evalueserve analysis shows a positive change in the cost structure of the clients (cost-cutting of as much as 40-70 percent) due to outsourcing of jobs to low- cost destinations like India.

India with its large pool of chartered accountants, doctors, MBAs, lawyers and research analysts, is expected to dominate the KPO sector along with the BPO sector. In fact, India’s edge in providing KPO services will help it stay way ahead of other low-cost outsourcing destinations in the global outsourcing market.

There are immense opportunities in high-end KPO for Indian firms. The potential high-end opportunities are in the areas, such as pharmaceuticals, investment banking, market research and competitive intelligence, bioinformatics, data search, integration and management.

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