HR Practice Scenario in Indian KPOs

Introduction The trajectory of growth of outsourcing as a strategy and a significant management tool over the last decade has been noteworthy notwithstanding the momentary hit due to the global economic meltdown. What began from manufacturing outsourcing progressed to information technology (IT) and business process outsourcing (BPO) and elevated to a somewhat elite branch of outsourcing known as knowledge process outsourcing (KPO). KPO is the offshoring / outsourcing of high-end knowledge intensive processes requiring considerable domain expertise which necessitates a shift of execution from standardized processes to processes that demand superior analytical and technical skills as well as decisive judgement (Evalueserve, 2004). Currie et al. (2008, p.95) define a knowledge process as "a sequence of intellectual activities involving analysis pattern recognition, design, judgement, which converts unstructured and poorly defined inputs into a well defined, often original output". The presence of domain and functional knowledge in a person is essential in doing this work correctly and successfully (Swami and Sekhar, 2005, Venu, 2005) as the essence of KPO is the specialized knowledge services its professionals offer. Yet another description of the distinct nature of KPO has been given by Banerjee et al. (2007, p.4) as "Knowledge process offshoring is about getting high-end, value-added work done by resources whose co-location with the end client is not necessary, where the effort is people-intensive, and the end product is arrived at through rigorous methodologies. Because this type of work requires a high level of judgment, subjective analysis and interpretation, the end results can vary from practitioner to practitioner". People and location attractiveness are the main factors contributing to the strong growth of the Indian outsourcing sector (Budhwar et al., 2006a, b; Evalueserve, 2005a). Its success over the past many years is clearly reflected in its transition from IT and IT enabled services to KPO (Evalueserve, 2005b). According to Aggarwal (2007) the initial years of outsourcing of knowledge work in India remained tepid with only a few recognized players in the field and the distinction between KPO and BPO came to light when Ashish Gupta, COO, Evalueserve, coined the term KPO in October 2003 to emphasize the difference in the kind of services his company provided from other BPO activities. The five years from 2000 to 2005 were the growth years for KPO during which niche service providers established offshore knowledge centers in India, making it a leading destination for KPO (Tandon, 2006). Of the total global revenue of USD 4.4 billion earned by the KPO industry in 2006-07, USD 3.05 billion was generated by 75,400 billable professionals in India (Aggarwal, 2007; Sachdeva, 2007a). According to Ashish Gupta, COO, Evalueserve, the knowledge process market in India is likely to foster USD 10--12 billion by 2012 (Sachdeva, 2007b). Interestingly, a study by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) says that shortage of knowledge professionals in India would shrink the KPO business by nearly 30 percent by 2012 (The Economic Times, 2007). Notwithstanding global recession, KPO is expected to grow and India could maintain its supremacy with good management, a reasonable sized talent-pool of human expertise in different fields and stable government policies (Financialexpress.com, 2009). Given the share of India's pie and promising growth prospects of this burgeoning sector (Makhija, 2005; Zachariahs and Pandya, 2005; Rediff.com, 2005; Aggarwal, 2007; Sharma, 2007) more can be done to tap it to full potential. Thus despite differing views and projections about growth and success, the truth remains that KPO being a people centric industry comprising ambitious knowledge professionals bound to have great expectations from their jobs there is a need to align and focus on the human resource management area to meet the challenges in fulfilling the promising expectations set for this industry. …