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October 07, 2006

Is KPO the answer to the Indian BPO industry's problems?

Business Today has a survey of the Indian Business Process Outsourcing (BPO) sector.
With its vast pool of well-trained professionals like doctors, engineers, teachers, lawyers, chartered accountants, MBAs to even journalists, India is experiencing a second wind in the BPO space, doing everything from equity research to business and technical analysis to animation to IP filing to accounting advisory services. In other words, the top end of the BPO value chain is the KPO industry. Unlike voice-based work, in KPO the billing rates can be as high as $26 or Rs 1,222 per hour per seat and the margins are also correspondingly higher. In 2005-06, of the $6.3 billion earned by the Indian BPO sector as a whole, $1.2 billion or nearly a fifth of it came from KPO work. India's it Ministry estimates that by 2010, India can tap 15 per cent of the $54 billion (Rs 2,53,800 crore) global KPO opportunity.

Arun Natarajan is the Founder of Venture Intelligence, which tracks private equity and venture capital in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.