Effect of Global Recession on the KPO Industry

101 6
KPO industry to reach 17bn by 2013-14

Evalueserve, Saratoga, California, August 2010: As the Knowledge Process Outsourcing pioneer Evalueserve approaches its ten-year anniversary, it has revised its industry forecast and believes the recent Great Recession has taken a three-year bite out of the KPO industry's growth.

In its widely accepted report in 2005, Evalueserve predicted that KPO industry revenues would reach USD 16.7 billion by 2010-11. However, primarily due to the Great Recession, the global research and analytics firm now estimates revenues of 17 billion will not be achieved until 2013-14. ‘While it may seem counterintuitive, recessionary times actually meant slower overall growth for offshoring knowledge services, since many firms were forced to shift their focus to survival mode,' comments Evalueserve Chairman Dr. Alok Aggarwal, ‘Most major offshoring initiatives were shelved or significantly stalled during the depths of the crisis as leadership was cutting to the bone and, understandably, worrying about their own personal situations.'

Unlike the more mature Business Process Outsourcing (BPO) and Information Technology
outsourcing (ITO) practices that have become strictly cost-saving commodities, Knowledge Process Outsourcing (KPO) services are more complex and still evolving. ‘These services are customized, require deeper experience, skills and domain knowledge in particular sectors such as legal, technology or telecom,' explains Aggarwal, ‘While cost savings are certainly a factor, many savvy firms are now viewing KPO 2.0 as a truly transformational opportunity which, when managed properly, can also provide new sources of revenue.' Aggarwal believes this bodes well for the future growth of KPO.

‘Firms are more strategically evaluating the most efficient implementation of a disciplined, global research and analytics platform to also support the launch of new products and services, in fact often targeting emerging markets,' adds Aggarwal. ‘Therefore, while India continues to be the largest provider of KPO, the industry has gained traction in other developing countries as offshoring combines with onshore and near-shore outsourcing in a hub-and-spoke model. Firms are now seeking the best value rather than simply focusing on the cheapest cost.' Evalueserve predicts that the market share of the Indian KPO industry will fall to 59% of the global market by 2013-14 from over 70% four years ago. However, with India and China producing the greatest number of talented and fresh candidates armed with KPO potential, both countries are still poised to remain the most important spokes in the knowledge services wheel.
Subscribe to our newsletter
Sign up here to get the latest news, updates and special offers delivered directly to your inbox.
You can unsubscribe at any time

Leave A Reply

Your email address will not be published.