Is BPO Obsolete? – The BPO-KPO Debate

Due to the evolution of technology and the discovery of new forms of service areas, many fear that the most basic form of outsourcing will eventually become irrelevant in today’s service-oriented business society. There is a more advanced form of process outsourcing that is stealing the show from the former star.

So many new services are cropping out ever since people discovered the multidimensional nature of outsourcing and how it can permeate through any profession.  In the past, for instance, outsourcing services that require extensive knowledge and expertise seem preposterous. You must be there to submit physical documents and ascertain that these technocrats are actually being productive. However, that was a past where computers were confined to ‘computing’ functions and had not yet reached their present cross-cutting characteristics. So when computers began to evolve a notch higher, becoming more complicated, so did the possibility of outsourcing.

Business process outsourcing (BPO) became a household name at the turn of the 21st century, but its first expressions were already in place through offshore manufacturing firms in China, India, and other sleeping giants in the continent of Asia. A lot of machinery, equipment, and processed goods had spare parts made in these countries even if the whole product itself was patented in the United States or in Europe. BPO was essentially derived from this set-up but it took up an entirely different form – one that can be made possible only through the wonders of computer technology and the Internet phenomenon.

Known BPO services constitute, among others, simple frontline services, which, despite their simplicity, are very much necessary to make businesses thrive. Call centers are the bulwark of these BPO services as they have contributed to the growth of the industry over the years. BPO call center jobs like outbound telemarketers, inbound customer service representatives, appointment setters, and technical support representatives have surfaced into the mainstream employment sectors, especially in developing countries whose call center service packages are friendlier to Western investors.  Transcription and data entry have also emerged in the wake of this BPO revolution. On a more humanitarian note, the establishment of BPO call centers has increased employment rates in several developing countries, allowing them to experience working in a technology-driven industry and earn industry-grade wages.

But for all its advantages, many supporters of BPO innovation are alarmed by nihilistic prophecies that BPO will soon lose its place in this globalized world, and in its stead will be the flourishing of a more profound, more knowledge-based type of outsourcing. Better known as “knowledge process outsourcing (KPO),” services that come under this bracket have gained more and more popularity in the recent years. KPO services include, to wit, jobs in the accounting and finance, information technology, web design and graphics, health care, research and copywriting, and human resource industries. Administrative jobs and basically any technical job at the back office are also covered by KPO.

With the entrance of KPO into this technology-driven world, where does that leave BPO? There is actually no controversy if you look at it in a consensual point of view. BPO can actually work side by side with KPO, allowing both facets of outsourcing to simultaneously grow and mutually promote each other. If BPO is less complicated and more frontal, KPO on one hand is very complicated and tends to specialize in backoffice operations. They complement each other, and the absence of one may likely put firms with outsourcing projects in a state of imbalance.

BPO or KPO – it is a no-contest, because they are essentially different. Thus, neither one’s existence will cancel out the other’s. Both BPO and KPO are able to push outsourcing in general to greater heights, helping it achieve mainstream success in the realm of transnational and international commerce. Thanks to BPO and KPO, goods and services have been able to circulate across countries without costing them more than they could chew. They have presented viable alternatives to time and money-consuming processes that only suck dry a business’ potential for success.

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