Monthly Archives: December 2010

Knowledge Process Outsourcing – Facts of Interest

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Knowledge Process Outsourcing – Facts of Interest
KPO means knowledge process outsourcing and is a more sophisticated type of BPO.  KPO generally refers to accounting, legal, software, and outsourcing that involves research and good analytical skills.
History of BPO & KPO
The history of the Business Process Outsourcing industry dates back to the 1980’s when a handful of European airlines started using Delhi as a location for their back office operations.   Later, American Express consolidated its Japan and Asia Pacific back office operations also to Delhi and the NCR region (which is near Delhi).  In the 1990’s, General Electric was next to follow suit and start back office operations in Gurgaon, which is a satellite city of Delhi.  These initial BPO operations were done using a business model that consisted of parent companies and “captives” which are companies that have an exclusive relationship with the parent company.  Independent BPO operations didn’t start until the 1990’s although the industry didn’t have much strength until after 2000.
IT outsourcing
In 2002, all major Indian software companies were involved in the BPO industry including Infosys, Inforlinx, HCL, Stayam, and Patni..  Spectramind was bought by Wipro, and the team that started Specramind, created Quatrro in 2006.  Daksh got bought by IBM, and MphasiS was acquired by EDS.  Accenture, IBM, Hewlett Parkard and Dell, Convergys and Sitel also created venues in India which created a lot of high paying jobs.  These new high paying jobs in India are the reason why the phenonimon of the reverse brain drain from America to India started accelerating from 2004-2009.
KPO Services
Investment research, Business research, Data Analytics, Market research, Valuation, Legal research are the main core of what are considered to be specialties in the KPO business.  IT, Software, and Web services can also be considered to be KPO services, although research oriented jobs better reflect how many think of KPOs. LPO means legal process outsourcing which includes a wide variety of legal back office services.  An LPO is a type of KPO as well.  The distinctions between the various outsourcing terms can get blurry, and terms can have definitions that overlap with other related terms as well.  Putting distinctions aside, KPO is a dream come true for India, where they can get a nice market share of higher paying skilled labor and have evolved past the stage of only getting grunt work and software labor.
Biotechnology & Pharmaceutical Research
Indian companies are now engaged in more and more biotechnology, and pharmaceutical analytical work. This is one of India’s most rapidly growing industries in the KPO sector. Israel is also very prominent in KPO as they have many companies who are very advanced in medical research.
Where are KPO’s typically located?
To run successful KPO companies, you need a good skilled labor pool.  India dominates roughly 70% of the world KPO market, and each metro in India has a different focus. Delhi is more oriented towards legal, accounting, and call center work.  Bombay is more oriented towards business.  Hyderabad and  Chennai gravitate towards IT, Data, and Transcriptions, while Bangalore is India’s hub for any type of highly skilled technical or analytical work.  Bangalore has the highest amount of highly skilled workers of any Indian metro and the majority of higher paying KPO jobs are in Bangalore.  Visit our Bangalore KPO page to see search results for KPO companies in Bangalore.

(1) KPO means knowledge process outsourcing and is a more sophisticated type of BPO.
(2) KPO generally refers to accounting, legal, software & outsourcing that involves research and good analytical skills.
(3) The HISTORY of KPO, BPO, and LPO
(4) Looking at a long list of KPO services, what defines them as KPO vs. BPO services?
(5) How do you distinguish what would be classified as a KPO vs. a BPO service?
(6) India dominates roughly 70% of the world KPO market, and each metro in India has a different focus.

You might also like:

How to find great offshore companies to do your back-office work!

Roadblocks in the BPO outsourcing profession

BPO India – Current Developments

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BPO India – current developments
IBM first entered the Indian BPO market in 2004 with its acquisition of Daksh.  IBM now has BPO operatons in eight cities in India.
Many experts note that India will have to move higher in the value chain to maintain market share in the BPO market.  As India raises its prices for BPO labor, the skill level and level of specialization also needs to rise.  Knowledge and Analytics are the new focus in the India BPO sector now, but for the companies that are only offering grunt work, they need to increase their overall quality offering, otherwise less expensive countries will be likely to gauge their market share.
South Africa has recently announced that it will be having incentives to attract business process outsourcing cmpanies.  These incentives could stimulate a rise of South African outsourcing that could pose a real threat to Indian BPO’s market share.  The largest market share for outsourcing is currently in India.  BPO’s springing up in other countries, especially those who have many who excel at English, will eventually cause India to lose its market share of the global market.  Since the global market continues to expand, India’s total dollar value of outsourcing services is not expected to shrink.
Since many in South Africa speak English as their native language, and often have an accent that is similar to British English, they have a huge edge over countries where English is their second language.  Another helpful factor for South Africa is that their time zone is very similar to England’s making it easy to make phone calls during business hours.  Both the U.K. and South Africa also have a similar financial system.  South Africa has been an untapped resource until recently for outsourcing, but they will be able to quickly gain market share and become the world’s fourth largest outsourcer behind India, China, and the Philippines.

Data Entry, Data Mining Information

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Data Entry General Information

Data Entry Clerk – job description
What is data entry and what does it involve? Data entry involves a data entry clerk or typist who reads hand-written or printed records and manually types them into a computerized database. Some data entry clerks are temp workers, while others are regular employees. Larger companies have enough data entry work to keep full time employees busy.

Typical jobs for data entry clerks might involve typing in tracking numbers of shipped goods, typing reference numbers for shipped goods that didn’t reach their destination, data input of medical information.

Optical character recognition technology allows a data entry clerk to read a report generated by an optical character scanning machine. The data entry clerk is still responsible for reviewing the results of the report for incorrect or omitted information.

Data entry work outsourcing is done heavily in many parts of the Philippines and India. Employees in those companies enjoy much higher than average salaries which affords them a lifestyle that includes restaurants, travel, entertaining, and other niceties that are not possible for the average person in their respective countries.

Many BPO companies in India do only Data Entry and data related services. But, many other BPOs in India offer a mixed bag of services including call center, data entry, and a variety of other back office services.


Data Mining Introduction
Data mining is the process of extracting patterns from particular data and is commonly used for marketing, surveillance, and fraud detection. One example of data mining is when a computer program or human extracts email addresses from a large directory type website, and compiles a list of email addresses to spam. Data mining has been used for centuries to find hidden patterns in data. One interesting example include the computer programs that look for mystical word and letter combinations / patterns in the Torah which originally was a really long scroll of letters with no spaces between the words.

Data Mining in Business
Data mining is used heavily in customer relationship management. Many businesses realize that identifying patterns of customer tastes and behaviors can help them to provide better and more targetted services to their customers. Since its expensive to contact customers, it is practical to identify which customers would be ideal to contact for specific purposes. If you are having a special on hotel rates, contacting customers who travel once per year might not be as efficient as contacting customers that travel once per month. If you are offering a discount on drinks at a bar, contacting teetotaling vegetarians will net you a big fat zero, while contacting avid wine connoisseurs might work better assuming your wine list is up to par. Mass mailings are done with the same principle – by identifying individuals who would be most reponsive to a particular message.

Identifying Ideal Customers or Employees
If you crunch the numbers, you might be able to create algorithms to identify which employee is the best and why. You have to look through data of many employees to find this information. Certain customers are worth more than others too. Some customers spend more than other on high profit items, while other customers spend very little and tie up your phone lines with endless bickering. Data mining can help you determine who is who which can help you figure out who to target to be your customer or employee, and can even tell you how much effort its worth to win someone over. Unfortunately, through data mining, we can put a price tag on everyone’s head. By the way, you (the reader) are worth exactly $5.28 to me! Just kidding – you are worth much more than that!

Customer data can be analyzed to learn about spending trends and customer profiles. This is why supermarkets such as Ralphs have Ralphs cards. It helps them develop not only customer loyalty, but helps them analyze who is buying what. Are you a single white male who buys lots of Gatoraid and Ramen noodles? Or are you the head of an Asian American family who purchases twenty pounds of pasta sauce per year? You may think that Asians eat won-tons, but those who understand data mining and data analysis know that behind closed doors, Asians are really eating pasta with marinara sauce and cheesecake in unbounded proportions– at least in California (just a hypothesis based on observation). That way, after interpreting customer data, a company who is advertising in an Asian neighborhood in California can have a smiling Asian lady who is devouring pasta; and display a bottle of tomato sauce with the name of the company on it. That, my friend is market segmenting and profiling in a nutshell — or in a pasta sauce jar.

Other Uses
Data mining can also be used to study educational research to see how students learn most. It can also be used to study drug safety issues, equipment testing, and even genetics. Gene mapping can be studied with techniques that include data mining.

Diary of a Night Owl Who Enjoys Outsourcing

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Diary of a Night Owl Who Enjoys Outsourcing
The night is young from a night owls perspective and the Indian programmers have already finished installing ten new pages with meta-tags, meta-titles and links.  The night owl says, “Wow, this is the way to do business — I didn’t even go to bed yet, and the work is done…. lets assign more”.  A feeling of relief that the Indian Software company in Pune is so fast on the draw, that the entire stack of emails that have the information for five dozen new pages will be done soon.
I’ve been writing customized SEO pages for dozens of pages for my new site for a few weeks now.  They are going online one by one, and google is responding generously to my hard work.  But, its so nice that with my odd schedule, I can find companies that are in full function, when I am in full function with my Leo schedule.  Its hard doing business with Americans.  By the time I get out of bed, have my mocha, finish my emails and other pressing matters, its too late to call the East Coast, and the West Coast only has a few hours to go. 
India is perfect.  If only we could move it to Australia, then it would have the perfect time zone for my schedule, but I’m not complaining, its excellent already. If only all companies could be like Indian Software companies!   Emails are the way I communicate these days.  Sure, a phone call is easier if there is a lot of back and forth in the communication.  But, emails are best for straight instructions and perhaps one or two quick questions for what the work entails.  Its amazing for me to get back and forth at 10pm when I’m in full swing, and America is unconscious.
My schedule is only normal when I take my break and go into the redwoods.  Its a six hour drive to Santa Cruz from here and the various state parts are waiting for me.  There is a feeling of peace there in any of the redwood forests, especially when there is a slight drizzle.  The earth is so soft as its composed of disintegrating pine needles.  Thats the only time I wake up as a civilized hour.  Last trip up North I woke up at 6am the last day and went hiking near Felton, CA at Henry Cowell state park.  I save all of my hundreds of business calls to the East coast for when I go on my trips.  Thats the only time I’m not a night owl.  Its up North that I do my welcome calls for new clients, and reminder calls for existing clients.  I wouldn’t be able to call India from there because I fall asleep at 10pm when India has just gotten to work since its +13.5 hours.
If you are a night owl who is in a software business, Indian Software companies are a dream to work with.  Try it!

Do Americans Need To Worry About Losing Their Job?

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Do Americans Need to Worry About Losing Their Job?

Americans have become a fearful people in the last few years. Unemployment is high, and outsourcing is an industry that continues to grow. If your job is not automized in the next six months, it could be shipped to India, China, or the Philippines.

What Americans need to realize is that “American” jobs have been shipped overseas since the 80’s and if there were a finite number of jobs in the world, our job loss would leave 80% of us unemployed by now. This is simply not the case. With all of the new labor saving technology and outsourcing, Americans are busier now than we ever have been. So, why the high amount of jobless individuals?

Many news articles blame unemployement on internal domestic issues. However, if you take a closer look, the factors might be more specific than you think. If a company is forced to offer benefits to a new employee, the cost of hiring someone with unknown potential suddenly gets very expensive. If there are legal issues or risks involved in firing someone, then companies might be skeptical about hiring in-house employees. Many unemployed individuals have personality issues that make it hard for them to work with others, which is why American companies often find it easier to outsource work overseas. Many of the unemployed in America have skills which are no longer marketable in the current economy, and those individuals need to learn some new skills that meet the current technological needs (which keep changing every two years). Some workers are so slow, that its not cost effective to pay the overhead for renting the square feet they occupy plus the management costs for managing them. The cost of hiring someone and processing payroll for them in the U.S. is sky high. If a job can be outsourced, it doesn’t make sense to have it done here.

In the long run, if we keep losing jobs, the labor rate will go down. We have already seen that salaries for programmers have come down a bit in many cases due to stiff competition from India. Minimum wage has not gone up that much in the United States in the last decade and has not kept up with inflation, making our standard of living lower. If Americans would work for less, and work a little faster (with a shorter lunch break) then outsourcing wouldn’t be such an attractive option in the first place.

The fact is that Americans who are capable of doing work that is marketable in today’s economy are really busy. They don’t have time to return phone calls and will keep you waiting a long time to get work done. Additionally, people in America rarely give me the impression that they are willing to fight for my business. If you want work done in a hurry, you have no choice but to outsource because Americans simply don’t have time to help you on short notice.

As time rolls on, India has hit some roadblocks to its expansion of its outsourcing empire. Labor costs are sky high, attrition rates are out of control, workspaces are really expensive, overpriced, and in short supply, and roads are so crammed, that companies can not realistically relocate to the outskirts of their metro unless their workers live nearby. India’s rates for outsourcing will become so expensive that outsourcing will eventually slow down, or so I think. Additionally, a crisis with Pakistan is inevitable and could shut the whole country down if it got out of hand.

America is the land of infinite road capacity, large buildings with elbow room for employees, political stability. If America decides to lower its rates, it can easily reduce outsourcing in a flash. If America decides to find a way to employ its unemployed, or to make incentives to give unemployed individuals even a part time job, our jobless rate would reduce overnight with or without outsourcing or automation.

Additionally in the future, as India and China get richer, they will need more American soap, cars, beef, and other commonly exported products which means more jobs for Americans! Outsourcing karma comes back to you. What you lose, you gain back in another form in no time at all!

Americans need to fear the internal domestic inflexibilities that cause unemployment and not outsourcing.