Knowledge Process Outsourcing

Description
BPO has become an accepted and widely adopted way of doing business, due to the success of early movers who opted to gain efficiencies through outsourcing non-core activities. In fact, more than 70% of businesses are outsourcing today - it is hard to compete without it.

n How does a firm move beyond simply
replacing on-shore transactional
staff, and invest in supplementing
knowledge workers with the best
strategic insights the global labor
market has to offer?
More and more businesses in every
vertical are asking these very questions
and many are finding the answer
in what has been called Knowledge
Process Outsourcing (KPO).
Introduction
BPO has become an accepted and
widely adopted way of doing business,
due to the success of early movers
who opted to gain efficiencies through
outsourcing non-core activities. In
fact, more than 70% of businesses
are outsourcing today – it is hard
to compete without it. The logical
question now becomes, “What’s
next?” At Capgemini, we boil the
question down to a few fundamental
components, including:
n How does a firm continue to drive
productivity and, increasingly
important in challenging economic
times, realize greater cost savings?
Business Process Outsourcing the way we do it
Knowledge Process
Outsourcing
Harnessing Intellectual Arbitrage to Capture Value
When conceptualizing what KPO is, it
is helpful to think about it as Business
Process Outsourcing (BPO), however
at a higher position in the intellectual
value chain. While business processes
are generally rule-based and repetitive,
knowledge processes can be any
activity which requires a deep level of
domain knowledge and/or analytical
thinking. To that end, the activities that
can fall under the KPO umbrella are
vast and will vary depending on a firm’s
individual business focus and industrial
vertical. Over the last few decades, BPO
has enabled firms to reduce operating
costs and increase productivity.
While the benefits of BPO are still
very relevant, firms will continue to
be pushed to operate more efficiently
in the increasingly challenging global
marketplace. Thanks to KPO, firms will
drive productivity and realize greater
cost savings while harnessing the best
strategic insights that the global market
place has to offer.
Figure1 illustrates how engaging
domain knowledge and analytical
thinking transforms the outsourced
Thanks to KPO, firms will
drive productivity and realize
greater cost savings while
harnessing the best strategic
insights that the global
market place has to offer.
process from a rule-based activity
to a role- or analysis-based activity.
Rule-based activities are clearly-defined
processes with standard steps and
a predictable outcome. Typical
rule-based activities include invoice
processing, data entry and service
level reporting. Role-based tasks
are predicated on a higher level
of understanding, experience and
qualification. The tasks themselves are
often less defined, more complex and
require a greater level of independent
thinking. Examples include radiologists
reading x-rays, engineers maintaining
operating manuals and CPA’s managing
general ledgers. Analysis-based activities
are those complex and dynamic tasks
generally associated
with higher order corporate decisions
and strategy. As such, these tasks are
best carried out by individuals who
exhibit strong critical thinking and
decision-making skills in addition
to their deep domain knowledge.
Examples of these sorts of tasks include
competitive analysis, market strategy
and product portfolio analysis.
1
Figure 1
V=VALUE C=COST P=PRODUCTIVITY E=EXPERTISE I=INSIGHT
unified team. This balance enables us to
deliver the optimum solution for your
business needs.
The number of industries and
professions to which KPO can be
successfully applied is limited only by
imagination. Figure 2 outlines some
of the current KPO offerings and
corresponding activities.
expertise is on the rise. It is estimated
that the annual value of KPO will reach
at least US$10 billion by 2010[source].
The talent pool for these activities
is being found in many areas of the
globe. Rightshore
¨
, Capgemini’s global
delivery model, can help bring together
our best talent from the right balance
of onshore, nearshore and offshore
locations and work with you as a
As the equations in Figure 1 illustrate,
the value of the activity increases as the
domain knowledge and requirement
for analytical thinking increases. In
moving up this value chain, the activity
begins to fall under the KPO umbrella.
In so doing, the process emphasizes
intellectual arbitrage and enables clients
to unlock topline growth rather than
simply save cost. It is also important
to note that while the SOW-based
work is primarily focused on the
replacement of FTE’s, moving up the
value chain will require a combination
of replacement of head count but also a
stronger emphasis on supplementation
of activities and collaboration with the
onshore team.
As KPO services have matured, the
boundaries between “outsourceable”
and “non-outsourceable” activities have
shifted significantly. Currently, the
volume of both activities that require
analytical skills and high domain
Business Process Outsourcing the way we do it
Figure 2
Financial Data Management Research Marketing & Communication
Managed RDM Services
- Acquisition
- Input/Validation
- Distribution
Data Integrity Services
- Cleaning
- Meta Data Management
- Profiling
Data Analysis
Asset Classes Supported
- Securities Data
- Client & Counterparty Data
- Pricing Data
- Corporate Actions
Anti Money Laundering
Compliance
Market Analysis
- Sizing
- Forecasting
- Feasibility Analysis
- Entry Strategy
Corporate Intelligence
- Market
- Competitor
- Supplier
- Customer
Benchmarking
- Competitive
- Process
- Functional
Equity & Fixed Income
Web Content Management
- Authoring and Collateral
creation
- Maintenance & Localization
services
- Publishing
Web analytics and
merchandising
- lick stream analysis
- Price monitoring
- Product database management
Editorial and Translation
Services
Learning & Development Engineering Services Sales Support & Operations
Traning & development
management
Content development and
Instructional design
Training & Certification
co-ordination
My Learning Administration
Technical Content Management
- Manual Creation Maintenance
- Illustrations
- Wiring Diagrams
CAD/CAM/CAE
- Modeling
- Detail Design, Analysis and
Validation
- Avionics Testing
- NC Programming
Metodixing
- Process Sheet
- Operation Sketch
- Test Procedures
Tooling
- Assembly Tool Design; Jig &
Fixture Design; Test RIG Design
Knowledge Management
- Standard Bid Content
- Credential Index
- KM Communications.
- Creation/
Maintenance of KM Portals
- Bid Support
- Proposal Authoring
Competitive Intelligence
- Account Research
- Competitor Info
Sales Hotline
Sales Operations
- Fin Reporting
- Funnel Management
- Report Analysis
- Tech & Audit Support
Knowledge Process Outsourcing 2
Can Our Knowledge
Be Outsourced?
Similar to the development of BPO
over the last few years, we are now
seeing a large increase in the companies
engaging in KPO services. A growing
number of businesses are looking for
ways to cash in on the efficiencies
gained through role- and analysis-based
outsourcing. They are using these
relatively new, yet increasingly mature
and cost-effective resources to maintain
their competitive edge.
If you are curious to learn whether or
not KPO services may help keep your
organization or business unit ahead of
the curve, we can help you find the
answers. You can begin investigating
whether or not KPO services may be
able to add value to your business by
exploring the following questions.
n Is it a priority for you to cut costs
in the short-term?
n Are attractive strategic projects
delayed because you don’t have the
capacity to explore them?
n Could divisions of your company
benefit from customized and
relevant insight to support sales,
marketing, design, development,
acquisition,
etc. decisions?
n Are you challenged by the choice
of whether to scale up internal
knowledge staff (a cost that is
fixed and hard to manage) or to
hire consultants (who require close
supervision and take time to learn
your business)?
n Do your best knowledge workers
have the support they need to grow
your business?
n Is the value contribution of
your top knowledge workers
commensurate with their potential?
If not, are they spending too much
time on important but non-critical
tasks?
n Does success in your business
depend on staying informed of
rapidly changing external forces
(competitors, markets, customers,
suppliers)?
Conclusion
Many companies are searching for
ways to reduce costs and remain
competitive. Given the success that
early adopters of KPO have attained in
leveraging offshore resources for more
core-aligned activities, there is a rapidly
growing number of senior executives
that are finding that competitive edge
by harnessing KPO. Many have found
that it was the logical and natural next
step to take after engaging in more
traditional BPO practices. Experience
in outsourcing more routine activities
is however, not a prerequisite to a
successful KPO engagement. The only
prerequisite is the ability to ask the
tough questions in search of ways to
stay ahead of the competition.

3
Knowledge Process Outsourcing 4
Business Process Outsourcing the way we do it
Case Studies
Reference Data Management
Business Issue Solution Benefits to the client
- A leading financial services provider
specializing in procurement, processing and
distribution of financial information was
under tremendous market pressure to
increase coverage of securities”
- With the Financial Securities market
growing
- We have set up a team of 180 resources in
Mumbai, Kolkata and Krakow with experi-
ence in ?nancial data administration
- The team supports four client subsidiaries
US, UK, Germany and Singapore covering
both simple and complex securities for Euro
Bonds and US Markets
- Multiple languages supported
- A specialized core team has been set-up
for supporting hybrid securities (most
complex securities)
- Top Line Benefit: 45% increase in data
management capacity for the client to
support key markets (UK, US, Germany and
Singapore)
- Bottom Line Benefit: Achieved 35% cost
savings of data operations through offshor-
ing and productivity gain.
- As a value added service Capgemini helped
create and set up a Hedge Fund database
which will provide additional revenues
through portfolio extension into a new data
product
Business Research
Business Problem Solution Benefits to the client
- The client needed to understand all regula-
tory issues and business opportunities
across four developing markets within the
Telecom sector.
- Detailed secondary research covering
country dynamics, telecom industry over-
view, market sizing, technology and market
trends identi?ed
- Based on secondary research inputs, in-
depth interviews were conducted across key
industry stakeholders to identify and validate
opportunity areas across the telecom sector

- Final inputs derived based on analysis of
primary and secondary research
- Detailed understanding of four select
markets with regard to overall country
dynamics and current telecom market
- Current market size and future estimates
of telecom business in select four countries
estimated; giving the client a clear roadmap of
how the telecom sector would evolve in future
- Identi?es speci?c business opportunities
within 3 segments of telecom sector
- Identi?ed an addressable base of 54 Mn
subscribers as an opportunity area for
client to target by launching speci?c telecom
services
- High level estimates and ranges of EBITDA
margins estimated on launch of telecom
services in select markets
- Service speci?c entry strategies identi?ed
for client to target customers within the
select markets
- Regulatory understanding based on which
client to ?nalize mode of entry
- Benchmarking of peer countries to under-
stand current and future business
5
Web Content Management
Business Issue Solution Benefits to the client
- The client – A large North American
computer equipment manufacturer wanted
to improve quality and productivity over
existing processes and reduce total cost of
operations while improving control and work
collaboratively with 3rd party outsourcing
operations.
- The Capgemini team in Bangalore manu-
ally scrubs the Website for page and content
quality.
- The IBM Rational Policy Tester is deployed
to determine compliance with standards and
user accessibility issues.
- Capgemini implemented a Work Manage-
ment System to track completion of audits
and issue closure.
- Bottom Line Bene?t: Capgemini achieved
costs savings of approximately 40% for the
client
- Industrialization of processes which result-
ed in reduction in head count and effective
cost savings of additional 10%
Sales & Marketing
Business Issue Solution Benefits to the client
- The client wanted to offshore some of the
Sales & Marketing functions from their 30
different global locations to one nearshore/
offshore location which met with their busi-
ness requirements beyond costs in terms of
language support, accurate & sophisticated
demand & capacity planning and Industrial-
ization of processes.
- Set up a centralized Sales and Marketing
team which supported activities like, Bid
support, Knowledge management, Creative
services, Competitive Research and Sales
reporting.
- Set up a Industrialized pool of resources
with process Blue books
- Customer Feedback system put into
place at every request level which was then
reported back to the customer
- Top Line Bene?t: The SLA driven model
saw savings in duplication of work and
industrialization to the tune of 40%
- Bottom Line Bene?t: ndustrialization has
lead to a reduction in head count of 7
resources for an initial team size of more
than 100 resources
- Created a Dashboard available 24/7
to enable the customer to view online
requests, feedback and valuable analysis
of sales and marketing activities
Engineering Services - Technical Publications
Business Issue Solution Benefits to the client
- A leading designer and manufacturer of
aviation products wanted to reduce costs
by 10-15% for all its aircraft programs, while
improving service quality and reliability to
customers by providing accurate aircraft and
parts information
- Set-up a team of 150 people to support the
on-going maintenance / updating of speci?c
“Aircraft Technical Publication” manuals
- Perform specific activities related to
authoring / writing changes, illustration
changes and publishing
- Top Line Bene?t: Improved service quality
and reliability to customers by 30%
- Bottom Line Bene?t: Ef?ciencies both in
costs and operations of approximately 45%
- Transform technical publications services
into revenue generating value added service
Aashish Sharma
+91 98 203 24 334
[email protected]
Joy Seletsky
+1 917-213-2025
[email protected]
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www.capgemini.com/BPO
Copyright © 2009 Capgemini. All rights reserved.
Capgemini, one of the
world’s foremost providers of
consulting, technology and outsourcing
services, enables its clients to transform and
perform through technologies. Capgemini
provides its clients with insights and
capabilities that boost their freedom to
achieve superior results through a unique
way of working - the Collaborative Business
Experience™. The Group relies on its global
delivery model called Rightshore
®
, which
aims to get the right balance of the best talent
from multiple location, working as one team
to create and deliver the optimum solution for
clients.
Present in more than 30 countries, Capgemini
reported 2008 global revenues of EUR 8.7
billion and employs over 92,000 people
worldwide.
More information is available at
www.capgemini.com
About Capgemini and the Collaborative
Business Experience

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