Difference between BPO and KPO

Key Difference: BPO, abbreviation of Business Processing Outsourcing, means getting a business process implemented using the channel of outsourcing. On the other hand, KPO, abbreviation of Knowledge Process Outsourcing, means outsourcing a process which requires processing knowledge in one form or another.

Distinguishing between BPO and KPO, there are a number of notable differences. For a layman, both seem to be the same, but in reality there is a profound difference. Let’s get an idea about the terms: BPO and KPO.

BPO, short for Business Processing Outsourcing, is the business that focuses on tasks, ranging from manufacturing products to providing customer care. It usually consists of the back office or front office operations. It is a process where a number of people are working for a specific business. It is originally associated with the firms' production of goods for use or sale using labor and machines, tools, chemical and biological processing, or formulation, such as Coca Cola that outsourced large sections of its supply chain.

The trend started in the late eighties when businesses sent parts of their processes to be completed in foreign countries. It is helpful for those who are under-graduate or graduate and are not able to be employed in any company. If one has skill, he will definitely be employed in BPO. Nowadays, it has become a fashion or trend for youngsters in some countries to work in BPOs just for time pass. Data entry, call centers are some examples of BPO operations.

Different types of services by BPO industry are:

  • Customer Support Services
  • Technical Support Services
  • Telemarketing Services
  • Employee IT Help-desk Services
  • Insurance
  • Processing Data Entry Services / Data Processing Services
  • Data Conversion Services Scanning,
  • OCR with Editing & Indexing Services
  • Book Keeping and Accounting
  • Services Form Processing Services

KPO, short for Knowledge Processing Outsourcing, is the latest outsourcing process, which involves the application of training and expertise to research, data analysis, and other information-based activities. KPOs are usually more specialized and knowledge based. It requires a lot of R&D (Research and Development) services. The services like capital and insurance market services, legal services, biotechnology, etc., are also the usual activities that are held in KPOs.

Countries which are particularly famous in Knowledge Process Outsourcing include India and Eastern Europe. KPO provides great quality work and deliver everything on-time with uninterrupted services. Initially, they are focusing more on data collection, updating models, patent searchers and basic data mining, but no doubt, in a few years they are the next big thing in the outsourcing sector.

KPO segments are:

  • Analytics
  • Business Research
  • Design & Animation
  • Engineering Service Outsourcing (ESO)
  • Financial Research Outsourcing (FRO)
  • Legal Process Outsourcing (LPO)
  • Marketing Services
  • Market Research Outsourcing (MRO)
  • Publishing Outsourcing

Both, BPO and KPO, help businesses to streamline their operations, making them cost effective, but the six elements that separate these two processes are focus, process, specialization, driving force, activities, and client contacts.

Some of the key differences are listed in the table below:





BPO provides services like customer care, technical support through voice processes, tele-marketing, sales, etc.

KPO provides in-depth knowledge, expertise and analysis on complex areas like Legal Services, Business and Market Research, etc.

Stands for

Business Processing Outsourcing

Knowledge Processing Outsourcing


Good communication skills and basic computer knowledge

Specialized knowledge


Low end services

High end services


Pre-defined process

Requires application and understanding of business


Not so qualified employees

Skill and expertise of knowledge employees

Expertise in



In a nutshell, one can say that KPOs emerged from BPOs. If one wants to work in KPO, they will require higher skills as compared to BPO.

Image Courtesy: tvtworld.com, vardhmansoft.com

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