Understanding The Difference Between KPO and BPO: Which Outsourcing Is Best For You?

Outsourcing has been around for years. In the Philippines, the industry continues to grow as the country is one of the top outsourcing destinations in the world. A recent report by The Everest Group, a Texas-based global consulting and research firm, revealed that the Philippines will remain to be the top call-center destination in the world, taking in 16 to 18 percent of total outsourced services worldwide. This puts the Philippines ahead of India, its nearest competitor as far as outsourcing is concerned.

When it comes to outsourcing, there are two types of processes that companies can choose from namely business process outsourcing (BPO) and knowledge process outsourcing (KPO). Whether its BPO or KPO, outsourcing offers a wide range of benefits such as:

  • Lower cost of labor. Outsourcing work offers lesser labor costs compared to hiring your own people in your own country for performing tasks such as customer service. You would have to spend for infrastructure, equipment, electricity, internet, and wages.
  • Value for your money. One thing that discourages businesses from outsourcing their work is the potential revenue. Many companies think that outsourcing may just be a waste of money. However, outsourcing can give value for your money and is a worthwhile investment.
  • Focus on core tasks. Outsourcing companies will handle the non-core tasks of your company which means that you can now focus on the more important tasks of your business. You can now concentrate your efforts on strategizing and putting those strategies to work.

If you are planning to venture into outsourcing work, you might be wondering whether BPO or KPO is the right one for your organization. In this article, we shall take a look at the difference between BPO and KPO.

Major Differences

  • BPO is based on a set process and rules; KPO on knowledge, expertise, and judgment of the personnel.
  • BPO is less complex and is volume driven; KPO is more complicated, requiring knowledge and dealing with insight experiences and expertise.
  • BPOs hire employees with basic education, strong communication skills, and general computer knowledge.  KPOs look for more highly skilled and professionally qualified individuals.
  • BPOs focus on low-level processes while KPOs deal with knowledge, information, and high-level processes.
  • BPOs have a monotonous routine and set targets while KPO provides insights, speculates, forecasts, and may report directly to client.

Services Offered

BPO companies are engaged in handling front end and back end operations of an entity. Some of its tasks may include customer care, human resources, technical support, finance and accounting-related services, website services, and transcription. BPO outsourcing companies allow their clients to focus on the core tasks of their operation. This gives businesses more time to focus on tasks that are extremely important to them.

Knowledge process outsourcing (KPO), on the other hand, include work that are considered high end. These tasks are those that require more concentration such as analysis of numbers and data and research. Services offered by KPO companies include investment research, market research, data analytics, business research, and others. KPO services may also involve corporate training and education and learning solutions. KPO may also specialize in data and product development, web design, and web content creation.

Target Market

Knowledge process outsource targets a specific type of customer. BPO companies, on the other hand, cater to different types of businesses and its services are characterized more by size rather than what they focus on.

Hiring Process

Both KPO and BPO put careful attention to the qualifications and attitudes of potential employees. However, the former is more meticulous when it comes to the skills of the people they hire. KPO aspirants need to be highly proficient in their chosen fields. Although BPOs may also hire people with specialized skills, there is a high preference for jack-of-all trades who can perform a wide range of tasks.

It is worth noting that KPO stemmed from BPO. However, time will come when KPOI will become a stand-alone industry.

Which Outsourcing Process Is For You?

While both BPO and KPO will be beneficial for you, your choice will be dependent on your type of business and what types of jobs you wish to outsource. The skill level you wish to outsource will also be crucial in choosing between BPO and KPO.  airisX has options for both needs, providing resources from entry level e-mail customer support up through project managers, bookkeepers, branding managers, and more.


airisX has solutions for all sizes and types of companies. Getting started is as easy as scheduling a consultation with us, so go ahead and