Oct 282012


Knowledge Process Outsourcing or KPO based on research performed

Let us continue with our posts on Knowledge process outsourcing or KPO, in the last post we discussed an example of KPO from mortgage underwriting perspective. We classified the mortgage underwriting process as a KPO based on decision-making authority and capabilities. As promised in this post we will examine a business that can be classified as KPO or knowledge process outsourcing based on the type of work performed by the employees.

Let us assume you are a big wall street firm and you have been engaged by a client who is planning to come out with an IPO or Initial Public Offering. Now the clients wants to make sure that they bring the IPO in market at the best possible price  which will give them maximum value of the stocks being offered in market at the same time you don’t want to charge so high that no body will buy your stocks or dump it on the first available opportunity once the stock is listed ( Facebook remember that IPO?).

So  you the big wall street firm want your researchers to do the research find the following things:

  • Who is the competition in market for the client-the established players, new companies that came up in last few years/
  • How many of them are listed and what is their stock prices.
  • The valuation the market offers to the competition
  • Size of the market
  • Growth rate of the market
  • Risk factors that the investors and clients should be aware of
  • Compliance issues
  • Technological advantages the client and its product have over competition
  • .Any deals that have happened in this space in last few years

Now a lot of this information may be available in public domain through diverse sources like internet, libraries, government records, etc. But all of it will be in different formats and comparisons will not be available easily. The other challenge would be a big competition may be deriving only a small fraction of the revenue from your clients line of business. So in such cases the KPO company comes into picture and they will work with the wall street firm to come up with a detailed report that will be based on the information available and the research done by the KPO company to come up with a report that will be

  • Structured
  • In a template that is easy to comprehend
  • Assumptions based on the data available regarding the growth rate of market, market size etc.
  • Comparisons of apple to apple e.g. removing any revenue that came from a one time gig like an asset sale.
  • Recommendations in the report with the reasoning for the recommendations.

Based on the detailed report the client and the client of the client i.e. the company coming out with IPO will decide at what price they want to come up with IPO or even if they need to come up with IPO or should go for private placement to raise more funds if they feel they will not get a lucrative enough price from the IPO market.

So here we saw that the KPO company swings in action once they have been given a mandate to come up with a report based on certain parameters given by the client. After that the KPO or the knowledge process outsourcing company was on its own to do the research, comparisons etc.So this will be an example of a KPO or knowledge process outsourcing company which is research based and does research on to the financial and marketing aspect of a client requirement.

Thus so far we have seen 2 examples of KPO or knowledge process outsourcing

  1. Mortgage underwriting based on the financial decisions taken.
  2. Financial and Marketing research by the KPO by scrutinizing various source of information and then collating and presenting that information to the client in a form that it can be used to take critical decisions.

Please send your questions and comments and any examples you may have for KPO organizations and the work they perform. We will be very happy to incorporate the same in the coming posts.

Team Cafe BPO

 October 28, 2012  Posted by at 7:11 PM Business of BpO Tagged with: , ,  Comments Off on What the Hell is Knowledge Process Outsourcing – KPO-III