Reports released in the year 2007 predicted that “Knowledge Process Offshoring world-wide is expected to grow to US $ 16.7 billion in revenue by 2010-2011 implying an annual growth rate of 39 percent and it will employ approximately 350,000 professionals by March 2011.”
According to this report, countries like India, China, Russia, Poland, the Philippines, Hungary and many republics from the erstwhile Soviet Union have been creating a knowledge pool, which is the result of enhancement in education standard, globalized learning and growth in English speaking population across the world. This was the major consideration for the study report.
Interestingly, NOA (National Outsourcing Association), UK’s only outsourcing trade association reported that year 2008 would be the year of outsourcing in knowledge process and enhancement would be driven by the looming credit crisis. Albeit, the question ‘will KPO be the next big boom after BPO’ still remains unanswered. KPO by virtue of being independent of exclusive IT based services was expected to spearhead the growth compared to other outsourced processes.
Though long term prospects look bright for business process outsourcing, the growth decelerated to 7 to 8 percent during 2009 from 16 percent in the year 2008 due to the credit crisis. In May 2009, reports were circulated that anticipated a growth rate of 17 percent between 2009-2010 and 2013-2014 for Business Process Outsourcing. Meanwhile, the KPO sector is expected to outpace the average BPO growth trend during this period. An expected CAGR of 21 percent has been reported by valuable resources. If we look at the revenue split, though cost on outsourcing remains almost at same levels, overall revenue has been growing upwards.
Revenue-wise, India is expected to touch $47 billion in the year 2009 (financial year ending March 2010) in BPO, while KPO is expected to touch $7 billion during this time.
Gap in supply vs. demand is identified to be in the areas of FRO (Financial Research Outsourcing), LPO (Legal Process Outsourcing) and Data Analytics services.
Summarily, while KPO is expected to show interesting CAGR during the next few years, BPO will still lead the race in terms of revenue. |
