Knowledge Management in BPO Industry

Knowledge Mgmt:
Knowledge Management (KM) comprises a range of strategies and practices used in an
organization to identify, create, represent, distribute, and enable adoption of insights and
experiences. Such insights and experiences comprise knowledge, either embodied in
individuals or embedded in organizational processes or practice.

BPO Industry – An Introduction:

Business Process Outsourcing (BPO) is a form of outsourcing that involves the
contracting of the operations and responsibilities of specific business functions (or
processes) to a third-party service provider.
BPO is typically categorized into back office outsourcing - which includes internal
business functions such as human resources or finance and accounting, and front office
outsourcing - which includes customer-related services such as contact center services.

Knowledge management is emerging in BPO industry:

The interest in KM implementations in the BPO sector resulted from concerns by KM

gurus on outsourcing one of the three key components of intellectual property of an
organization; customer capital. Subsequently most KM projects concentrated on this
very aspect, capturing & making sense of information’s capture during customer or
prospect interaction .KM adds values to various functions & specific processes in a BPO
as the industry matures to handle more knowledge intensive processes.

Exist KM in BPO in the form of:

Induction & Daily/Weekly/Monthly Briefings

Process Training
Process Knowledge Test
Process training Manuals
Resource Database
Client Database
HR Database (Leave & Attendance, compensation etc.)
SOP’s, TDD’s, SRT’s etc.
Day-to-day Team Meetings
Metrics & reporting
Reward & Recognition
Fire Drill
Learning & IJP’s Database
Admin Transport Database
Quest Ideas Database
Applications information
Cafeteria
Internet Websites

Example of KM in BPO:
Opportunities and Challenges of KM in the BPO Industry

The challenge is in collating and assimilating all information and experiences, which
may, in the case of some organizations, be spread across geographical boundaries.
Even if knowledge is captured, getting people to contribute and utilize stored knowledge
assets is a challenge. With these come further challenges, which are precipitated either
because people are not aware of the involved technology or are not cognizant of the
benefits of such an exercise.
However, if these challenges are taken care of a lot of benefits emerge for organizations
as a whole. A robust KM system leads to development of service intensity, better quality
of work and culture, globalization and uniformity of processes across the organization,
shortening of product life cycles, and removal of redundant processes. This in turn leads
to faster services/ products to market, employee retention, valuable knowledge asset
creation, innovation and idea generation, reduced costs, and effective delivery of
organizational goals to employees.

KM in BPO: Opportunities and Challenges

Intellectual capital and the effective use of it will be the trigger for gaining competitive
advantage in the rapidly growing global economy. The success of organizations will
depend on their ability to attract and retain their best workers. This will be made possible
if they have effective performance management systems to enable continuous learning
and motivate the employees. The firms would need to encourage knowledge sharing as
part of the organization culture, i.e. organizations would need to view KM as an implicit
part of daily work and create an environment where knowledge sharing is encouraged.
This stands true in the new businesses that organizations are getting into globally. Prime
among these business domains are the Business Process Outsourcing (BPO) business
and lately the Knowledge Process Outsourcing (KPO) business.
Each process in the BPO industry involves work on a specific functional area, viz. HR,
Finance – insurance, collections, payments, Quality etc. Each of the business functions
or processes which are outsourced to third parties require the use of human capital
which has some specialized knowledge and / or experience of working in that particular
function. These people would then be qualified to be called knowledge workers for that
particular function. For example, a process involving loans and mortgages would require
employing personnel who are well acquainted with the concepts or those who have an
idea about the concepts and will require extensive training on them. To build a robust
process in this area, the organization will therefore be required to leverage the
intellectual capital, which is recruited to increase revenue and reduce costs and to justify
the business case. To enable this, it will be required to channelize collective learning,
capture learning assets, share knowledge while working, innovate on set up processes,
integrate appropriate technology and optimize workflow. The process will be successful
when the organization is able to leverage, capture, and store what their learning is and
share it in consequent phases with a new set of employees without much time and effort
in its growth phase.
Therefore, organizations would need to develop a methodology by which they can
optimally tap their intangible human assets, explore knowledge which is captive in the
mind and in the variety of experiences that can be utilized in the future even if its existing
set of personnel float across to other players in the industry. From a BPO perspective,
KM also involves harvesting new knowledge for gaining competitive advantage, enabling
access to a vast amount of project and process information and sharing best practices
evolved in the course of working those processes. Further, it also involves applying
management strategies and technology that support all the mentioned functions
including groupware and intranets. Having said that, it would be quite a challenge to
make KM implementation happen in a diverse work environment, which is a
characteristic of the BPO industry.
Creating a “Knowledge – friendly” work culture is difficult if it is not intrinsic to the culture
because it involves selling an elaborate plan for change management to the
organizations’ leadership.
Likewise, a few of the other challenges that are faced by organizations can be
enumerated as under:
1. Absence of knowledge systems that can capture tacit elements of knowledge from
existing set of employees
2. Absence of a continuous learning i.e. a learning organizational culture
3. Lack of sharing of best practices across various departments, and upgradation of best
practices with change in processes.
4. Lack of openness and inadequate dissemination of information between different
stakeholders in the knowledge capture and storage process.
5. Employee reluctance to share information amongst themselves
6. Lack of avenues for searching knowledge sources and lack of mechanisms for
constituting communities of practice.
7. Lack of motivation in the employees to accept and incorporate industry best practices
into their operations
8. Loss of knowledge when people move across departments as part of changes in job
roles.
9. Lack of understanding of the company’s business goals, models, and strategies
10. Lack of understanding of metric measures and the Knowledge Management
program.

In the context of these challenges, there are many opportunities that Knowledge
Organizations have, over other organizations. A few can be enumerated as follows:
1. Provision of the right knowledge at the right time for any user that wants it
2. A repository of all knowledge items where all knowledge assets can be collected and
stored.
3. Effortless handling of routine and simple tasks simply by sharing best practices
4. Increased innovation and spread of ideas in process
5. Complex and unexpected tasks will be handled competently making effective use of
past experiences in the same kind of tasks
6. Costs of training and building learning assets are lowered after the knowledge
repository is in place.
7. Employee retention is enhanced as employees are recognized for their contribution to
repositories and recognized in the performance management process
8. Operations get further streamlined by sharing of best practices and redundant
processes can be done away with.

Compiled by:
Kiran Rana
Sagar Vetal
Kumar Sathe
Ameet Naik