KPO is about offshoring the core processes of the organization to the foreign country. This can be beneficial to the companies as it will help in value addition by a multi-cultural judgment and input by knowledge workers having global perspective. But risk involved in offshoring the core processes is much higher. The quality of services should not suffer. The competency or the judgment of the knowledge worker would be crucial for protecting the offshoring organizations goodwill, market share and image.

India inherently had the tradition and inclination towards a knowledge-based economy. In true sense knowledge is becoming power today, with Indians providing their knowledge to the world sitting right in their homeland. The official or more appropriate term for the same would be Knowledge Process Offshoring (KPO).

Though for this article I have used Offshoring and outsourcing as synonyms, it is not exactly a synonym. Outsourcing is defined as the transformation of day-to-day execution of an entire business function to a third-party service provider. When the same is done to a third-party in a foreign country, it becomes "offshoring". Thus, outsourcing means sharing organizational control whereas "offshoring" represents a relocation of an organizational function and need not necessarily involve transfer of control to third-party in a foreign land.

Porter's competitive advantage of nation's model propagated the factors for competitive advantage; labor was one of the factors. Since long, nations have practiced this theory of outsourcing commodities and products from those nations who had a comparative advantage over others in terms of natural resources, infrastructure, regulatory environment and many more. This was practiced to achieve manufacturing efficiencies and economies of scale. But the labor factor was not always moveable. Even this gave rise to an advantage for the nation. Due to the restriction of movement of labor, there can be an advantage to the nation having high-level knowledge work force.

Global CEO Magazine, Knowledge Process Offshoring, Knowledge-based Economy, Natural Resources, Indian Companies, Software Product Development, Indian KPO Sector, Organizational Environment, BPO Companies, BPO Industry, Globalization, Intellectual Resources, Offshoring Organizations.