RPO Market Drivers

The emergence of the KPO/RPO industry
A more recent trend, albeit similar to that in the overall IT and Business Process Outsourcing (BPO) industry, is the emergence of off- shoring high-value-added processes, namely business and financial research support services and intellectual property-related support services. This represents a new emerging area: Knowledge Process Outsourcing (KPO). Market research, competitive intelligence and data search, and integration will be the fastest-growing segments of all the various research activities.

Research Process Outsourcing (RPO) is a part of the overall KPO industry. In the recent few years, this market has witnessed tremendous transformation. From the administration of telephonic surveys and questionnaires using call centers in the early years of the 21st century, the industry has progressively moved to handling information search and compilation activities on various business, technology and economic aspects. At present, high-end tasks such as competitive intelligence, preparation of company profiles, and financial analysis and modeling, are being handled by companies in India.

In line with this evolution, the RPO market has also seen the emergence of a diverse range of players across a wide range of services. The financial research area for instance is dominated by captives set by large global players such as Goldman Sachs, Lehman Brothers and JP Morgan. In case of other areas, such as business research, data analytics, legal and IP services, there is a mix of captive and third-party providers such as Scope eKnowledge Center and Office Tiger.
Predominant growth drivers for the RPO industry.

Given below are the prominent growth drivers for the RPO industry:
• Technology and content related.
• Economic and market related.
• Organizational related.

Key benefits of RPO
Some of the major benefits of RPO include:
• Cost savings (about 30 per cent to 40 per cent, depending on the research deliverable being outsourced)
• Access to a large talented workforce
• Improved scale of operations (a typical investment banking analyst can increase the coverage of stocks several fold)
• Free up critical resources to focus on core competencies
• Leverage specialized knowledge and expertise
• Enhance innovation and productivity levels creating stronger intellectual property (this smoothes out fluctuations in resource demand and reduces time to market)
• 24×7 operations.

Off-shoring: the lessons learnt
Based on the experience of many companies working with global clients in the research space, some of the key points to bear in mind include:
• Benefits are linked to scale of the project: the bigger the project, the better the benefits
• Outsourcing involves time and effort from your side too, especially in the initial stages
• Be wary of outsourcing processes that you are not familiar with or that are not working internally
• Always carry out a pilot project first and start with low-risk projects
• Have realistic savings estimates: 70 per cent is not possible; 30 per cent to 40 per cent is possible
• Productivity gains will stem from a learning curve, albeit with time
• Be clear on the final deliverable, including its structure and nature
• Define quality parameters and delivery schedules
• Look at the offshore company as a long-term partner not a vendor
• Finally, communicate, communicate, and communicate!

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