India set to ride the KPO wave: Report

Releasing the report "Knowledge Process Outsourcing (KPO): Unlocking top-line growth by outsourcing 'the core,'" during an outsourcing industry event organized by Nasscom in Mumbai, Edgidio Zarrella, global partner-in-charge, IT advisory, KPMG, said that KPO, which is seen as the third generation of the outsourcing process, is fast becoming a mainstream outsourcing option and has "come of age."

Unlike other outsourcing methods, KPO involves outsourcing more highly skilled processes and within the financial sector it is the most mature form of outsourcing, being used to take care of credit scores, loss protection calculations and fraud analytics.

According to Zarrella, in financial services sector alone, the market for KPO is expected to touch $5 billion in the next 2-3 years and this form of outsourcing will extend to other industries in the near future.

"KPO may still only represent a small percentage of the total outsourcing market but, with the financial sector demonstrating just what it can be used for, I think that all of these numbers are set to increase exponentially," Zarrella said.

According to the study, India currently leads the KPO sector globally, accounting for around 70 percent of revenues. However, many new locations like Estonia and Wales are springing up to create niches and attract work for themselves and other countries like Canada, China, Australia, Singapore, South Africa and parts of the UK are now competing for a piece of the action.