The Indian outsourcing industry is all set to take a giant leap forward with the high-end knowledge processing work coming its way from across the globe. The success story of the Indian Business Process Outsourcing (BPO) industry owing to the underlying factors of low labor cost, operational efficiencies, talented workforce and improved quality of service has encouraged many foreign firms to outsource their high-end knowledge work to India. Thus, the latest buzz in the outsourcing industry in India is Knowledge Process Outsourcing (KPO) and if the trend continues then KPO is the next big revolution to take place in India. But India has to overcome certain impending difficulties before it can become a KPO superpower. This article focuses on certain challenges that India is facing and how it can overcome those challenges to achieve the KPO revolution.

Knowledge Processing Ooutsourcing (KPO) is the latest and the newest form of outsourcing. It involves the transfer of knowledge-intensive business processes that require significant domain expertise to KPO firms in other geographic locations. KPO firms provide highly value-added process and domain-based business expertise which is necessarily required for the accomplishment of the high-end knowledge process work outsourced to them. KPO services are not restricted to IT or ITES sectors, but spread to other sectors such as Intellectual Property, Business Research and Analysis, Legal Research, Publishing, Market Research, etc.

KPO is a step ahead of BPO. KPO firms provide domain-based processes and business expertise, rather than process expertise. KPO is not an extension of BPO as the premise of KPO is to include it into a global delivery team, the requisite skills that support an organization's core process. While KPO is driven by depth of knowledge, experience and judgment, BPO in contrast is more of size, volume and efficiency. KPO involves high-end outsourcing service, while BPO involves low-end outsourcing service. In BPO, clients provide the business process requirements and the outsourcing-provider in India follows the need of the clients. But in the case of KPOs, Indian companies will be asked to provide vertical business segment-driven specialized knowledge base. It needs vertical business alignment and strong networking with specialized consulting firms. So, it can be said that KPO is a step ahead of BPO.

India is being considered as a favorable destination for knowledge-based work by businesses across the world. The underlying faith of the clients can be attributed to the several factors. Firstly, India has a huge pool of educated youth population in various areas such as pharmacy and medicine, legal and paralegal content, education and training, design and animation, research and development, engineering, bio-technology and intelligence services. Secondly, India is a low wage destination as compared to many other countries. Thirdly, the perception of the global business community that India can only produce and provide `cyber coolies' is fast changing. Moreover, the reports by leading consultants like GlobalSourcingNow and Evalueserve strongly support the fact that India has immense growth potential in KPO business. According to a report by GlobalSourcingNow, the global KPO industry is expected to reach $17 bn by 2010, out of which.

HRM Review Magazine, Indian Outsourcing Industry, Business Process Outsourcing, BPO, Knowledge Processing Ooutsourcing, KPO, IT and ITES Sectors, Intellectual Property, Business Research, Market Research, Global KPO Industry, Networking Management, Government Policies, Indian KPO Firms.