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Skill Shortage Is Stoking Demand for KPO Service

Growing demand for specialized skill sets will continue to drive demand for knowledge process outsourcing and prompt the industry to grow 23% over the next four years, according to technology research firm Technavio.
With huge armies of trained professionals and favorable business environments, many countries in Asia and Latin America are ideally positioned to cash in on the demand. North America accounts for a majority of KPO buyers while most of the service providers are based in Asia.
“The majority of demand for KPO services offshoring is created from regions like the Americas and Europe,” stated the report. “The [Asia-Pacific] region leads the market from the delivery perspective.”
Last year, India held over 60% of the global KPO market share, followed by China. The Philippines, Russia, and Indonesia are also making a push to grab their share of the pie.
Banking, financial services, and insurance (BFSI), as well as healthcare and retail, are the sectors where there is high demand for KPO service. Thanks to need for processing a large volume data, BFSI sector became the earliest adopter of KPOs.
With incidents of fraudulent claims increasing, insurance companies are turning to predictive analytics. “These models are also helping companies predict opportunities for up-selling and cross-selling,” said Amit Sharma, an analyst with Technavio.
KPO service providers are in an endless hunt for talented professionals armed with the expertise to handle complex sets of financial data generated from different sources and multiple countries. “Emerging countries will look to fulfill these requirements with their large talent pools over the next four years,” said the report.
Similarly, the report says, the retail sector is witnessing an emerging need for drawing insights from data generated from various in-store and promotional activities. In fact, outsourcing in the retail sector is gaining traction, as it has already helped several retail companies expand their businesses.
According to the report, the healthcare sector is one of the biggest buyers of knowledge-intensive services, particularly for clinical research and drug discovery. The report says some healthcare providers are “making strategic acquisitions with managed services providers and leading KPOs” in a bid to enhance timely reporting, reduce supply chain costs, and automate patient service.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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