7 Trending KPO Sectors for 2018 in the Philippines

by | Feb 14, 2018 | KPO | 0 comments

We will show you the hottest Trending KPO (Knowledge Process Outsourcing) Sectors for 2019 in the Philippines. 

Our detailed assessment of where you can find KPO sectors that will pay well and companies World Wide are seeking skilled talent in these sectors.

Did you know that outsourcing is a mature industry in the Philippines? It has brought in billions in revenue and has overtaken India in Voice sector of call centers.

They are now also catching up with India in the KPO or Knowledge Process Outsourcing sector.

In the 1990s, the country’s Business Process Outsourcing (BPO) began and since then the country has become a major player in this market.

However, as a demand for highly qualified staff has grown, the Philippines have expanded into Knowledge Process Outsourcing.

Now, both BPO and KPO are big contributors to the economic growth of the country and this is set to expand even further in 2018.

Perhaps you don’t know a lot about Knowledge Process Outsourcing and are not sure if it’s for you. If that’s the case this guide should help you to decide.

What is the Difference between KPO and BPO?

The Philippines have done very well in setting up an investor-friendly environment for the Knowledge Process Outsourcing business.

It works just as well for those companies who want to outsource to the Philippines and also those who want to set up KPO companies in the country.

Knowledge Process Outsourcing is the allocation of high level tasks to third party organization. It is characterized by small scale and niche offerings from companies who employ highly skilled people.

It is very different from Business Process Outsourcing. In BPO, the processes are standard and the outcome predictable.

Examples of these types of jobs include call centers, customer service, data entry, and IT maintenance.

KPO services on the other hand, include legal services, medical services, specialized training, consultancy, graphics design, animation, video, pharmaceuticals research and biotechnology disciplines.

To work in these fields, you need to have a high level of specialized expertise, advanced technical and analytical skills.

Unlike BPO’s, which follow a certain pattern, the outcomes in KPO’s do not follow rigid rules or procedures. For example, if you dial a call center about your bank account, the outcome is predictable.

The call center agent will answer your questions and the situation will be resolved. However, if you are working as a lawyer, it is impossible to predict the outcome of a case.

 

Skills for BPO and KPO differ in education and expertise. BPO requires their staff to have administrative skills and basic professional expertise.

KPO on the other hand, needs people with analytical and technical skills and advanced degrees or professional certifications. It draws its strength from the knowledge of the employees, while BPO is more concerned with efficiency.

In effect it’s not difficult to run a BPO company. You can even get freelancers to do the work. However, it’s harder to deliver KPO as it is more complex. Above all else, people working in Knowledge Process Outsourcing need to be able to make sound decisions on their own.

While BPO is straightforward, KPO can be further divided into two sections, role-based and analysis-based. A doctor making a diagnosis would be considered role-based, as would an engineer be maintaining a manual. Analysis-based activities on the other hand, are case dependent and complex.

 An investment analysis by a hedge fund manager would require in depth analysis and research, leading to an unknown conclusion. The outcome here cannot be determined at the beginning of the case.

It is not required that someone setting up a KPO business has established a BPO company. In fact, some small companies have set themselves up as KPO providers from the outset.

It is interesting to note that KPO in the Philippines is growing faster than BPO and is set to reach the same market size soon.

When did Knowledge Process Outsourcing Begin in the Philippines?

Knowledge Process Outsourcing began in India back in the 1980s, while the Philippines were just involved in Business Process Outsourcing.

However, in the early 90’s Knowledge Process Outsourcing took the Philippines by storm. Now in 2018 KPO holds over 40% of the outsourcing market in the country.

 

Most of the outsourcing companies are in the capital city of Manila, but even this has expanded and now there are outsourcing companies in Pasig City, Quezon City, Easton and Mandaluyong City.  Other areas of the country are growing rapidly as well.

Cebu City is has become a low-cost competitor for Manila based BPO’s and KPO’s. Other outlying cities that could be considered price competitors are Bacolod and Dumaguete as well as Davao.

The growth of Knowledge Process Outsourcing in recent years is due to the advancements in technology and the increased need for skilled staff.

 

Particularly from countries where there is high demand for skilled labor and a shortage of graduates. Highly skilled individuals are the key to success in the Philippines and the country checks all the boxes.

Why are the Philippines a Good Choice for KPO?

The Philippines is now a contender in the Knowledge Process Outsourcing industry, or back office services as it is sometimes referred to.

Perhaps you are wondering why they have come so far, so quickly? First, the Philippines is known for its warm, friendly and generous people.

Next the country is producing upwards of 500,000 college graduates yearly with a majority of those entering the BPO or KPO sectors. Check out the video located here from Bigoutsource.

If you outsource to the Philippines, you will find that you are earning more, while spending less. The Philippines is an emerging market economy with lower labor cost and equally low cost of living.

The BPO and KPO employees can afford to live styles comparable to the US and our Western Counterparts with their incomes.

 

Inflation has been steady and predictable in the Philippines for years. That means you can feel confident that you won’t suddenly be confronted with a much higher wage bill for the services you require.

In fact, labor costs for English speaking Filipino professionals are among the lowest in the world.

The Philippines have a cultural connection to the West, in particular the United States. The Philippines used to be a US colony, so the people are well aware of the lifestyle in America, a lot of which has spilled over culturally.

In addition, English is taught at every grade level and is often the primary language in Colleges and University.

You will find that the time-zone difference between the Philippines, US and Europe is substantial.

 

This helps you to reach your deadlines on time. It also means that your company will be working around the clock.

Thus, meeting quotas and deadlines you were not able to achieve prior to outsourcing your skilled labor to the Philippines. All this at a fraction of the cost.

The Philippine government has come to realize how important it is to keep their skilled workforce in the country and to nurture it.

They don’t want professionals leaving the country and taking their revenue with them. As a result, the government has dedicated their full support to Knowledge Process Outsourcing.

The infrastructure once considered inadequate, has taken huge strides in delivering high speed internet, roadways and electricity that now rival their competition.

There is a lot of low-cost high-quality real estate in urban as well as rural areas. Additionally, you will find a steady political environment that is considered pro-business.

There are of course some risks, but you would take these risks with any outsourcing company in the world.

To start with, there is the question of the security of classified information. In addition, you are not assured about the character of an employee. KPO is time consuming.

Delays due to geography, communication and culture due occur. However, the advantages far outweigh the disadvantages.

If you find an outsourcing company you are happy with, you will be able to rest assured that they have interviewed and employed suitable people. Remember your KPO needs quality employees to compete just like you!

Learn More From  Anderson : Click Here! 

Knowledge Process Outsourcing as a Strategic Tool

Managers know that they are going to get outsourced employees at massively lower costs than compared to in-house staff. As a result, they are not looking for the cheapest option, but for the best value for money.

To get maximum benefits from your outsourcing team, you need to establish a relationship with your outsourcing provider.

Longer term relationships are usually preferable to short term gigs.

With longer lasting relationships you can build value through training, experience and understanding the needs of both parties

Knowledge Process Outsourcing Sectors

KPO utilizes expertise and knowledge and it expects service providers to possess both analytical and technical skills. Here we have a description of most of the sectors competing for your business.

Legal Services

The Philippines are already competing strongly with India when it comes to legal and paralegal services. Their main target is, not surprisingly, the United States.

Because the Philippines was a US colony in the past, the laws are similar.

This makes it easier for the lawyers to carry out their work. Services offered include drafting contracts, reviewing litigation documents, legal research, knowledge management, and prosecuting patents.

To do these jobs, analytical and research qualities are required, as well as a law degree.

Banking and Finance Services

One of the leading Knowledge Process Outsourcing jobs in the Philippines is in the finance and banking sector.

Financial institutions provide many services, including underwriting, training, consulting, risk mitigation, and profit and loss.

They also provide analytical research on financial matters, such as payroll.

To work in this field, you would need to have a degree in Finance or Accounting. A knowledge of banking and investment would be advantageous.

Medical Services

Those with a medical degree, with specialized knowledge in a specific field, can work in this sector.

You would be involved in such assignments as oncology testing and genetic profiling. HIV and allergy tests could also be part of your job.

The Philippines has over 250,000 nursing graduates at its disposal for Knowledge Process Outsourcing. With proper training the Philippines is set as a leader in the healthcare services industry.

Greater attention to security issues surrounding HIPAA requirements and tightening compliance procedures around medical information is moving the countries medical services sector forward.

In addition, Chinese pharmaceutical firms which specialize in research and development have set up offices in Manila. The cost of rent and operating costs in the Philippines has been a huge enticement.

People suitable for this area of work are those with a doctorate or master’s degree in science. They would deal with drug research and development, as well as clinical research.

Learn More from Naveen Gulati : Click Here! 

Engineering Research and Development

This requires knowledge in CAD/CAM (computer-aided design and computer-aided manufacturing)applications, product design, and drafting and modeling.

You will be involved in such tasks as value engineering, technical specifications for tenders, and conversion from 20 to 30 finite analyses.

Marketing Research and Analytics

The business community has a shortage of writers today. Business leaders are scrambling to keep up with the content demands in an era where content drives marketing and sales.

The Philippines is an option for many. You can find very good qualified writers at a fraction of the cost of similarly qualified writers in the US.

The business community has a shortage of writers today. Business leaders are scrambling to keep up with the content demands in an era where content drives marketing and sales.

Here you will writers who have a mastery of English and the ability to write formal and informal styles, creative as well as technical articles.

The Philippines is an option for many. You can find very good qualified writers at a fraction of the cost of similarly qualified writers in the US.

Writing and Content Development

The business community has a shortage of writers today. Business leaders are scrambling to keep up with the content demands in an era where content drives marketing and sales.

Here you will writers who have a mastery of English and the ability to write formal and informal styles, creative as well as technical articles.

The Philippines is an option for many. You can find very good qualified writers at a fraction of the cost of similarly qualified writers in the US.

 

Graphics, Animation and Design

The Philippines has become a very successful animation and design outsourcing destination.

The global animation industry has been growing at 20 – 30% over the last few years which has created a demand for a low-cost, but highly skilled workforce.

The outsourcing animation business began in the Philippines in the 1980s with such companies as Burbank Animation Inc. and Asian Animation.

By 2008, the Philippines had over 50 animation companies. Most of them are small, but larger companies include Animation Roadrunner.

The Philippines employ over 7000 people in the animation business and the revenue has reached over $100 million.

Attractiveness of the KPO in the Philippines

The Philippines are placed high in the KPO business scale around the world. This has been mainly due to their proficiency in a business environment as well as people skills and availability.

Although the Philippines has just 90 million people and is one tenth of the size of India and China, it is still one of the top ten outsourcing companies in the world. This says a lot for the Knowledge Process Outsourcing skills of the Filipinos.

Business Environment

The Philippines have done very well in setting up an investor-friendly environment for the Knowledge Process Outsourcing business.

It works just as well for those companies who want to outsource to the Philippines and also those who want to set up KPO companies in the country.

Many benefits have been set up to make this an exciting prospect. There is an income tax holiday for four to eight years, a deduction of labor expense for the first five years, a VAT exemption on local purchases such as the telephone, water, and electricity, and a domestic sales allowance of up to 30%.

This all adds up to a very attractive package that few would ignore.

Conclusion

Today Knowledge Process Outsourcing is still evolving in the Philippines, but the prospects look good and the Filipinos can do nothing but gain from this experience. Although the Philippines have a smaller talent pool than India or China, what they do have is a highly educated, skilled, and experienced workforce.

The country produces around 370,000 college graduates each year which certainly isn’t bad as far as Knowledge Process Outsourcing is concerned. The country is set up to provide jobs for intellectual and analytical people with salaries that exceed BPO standards as well as the wages they would get in an ordinary Filipino company.

In the space of a few years, Filipino doctors, engineers, lawyers, and so on won’t have to leave their homes and travel abroad for work as it will be on their doorstep. The great thing is that the government totally supports the KPO industry as it wants to keep skilled citizens in the country.

2018 is going to be a great year for Knowledge Process Outsourcing in the Philippines. If you own a business, you will want it to grow and expand so why not start this journey with the best outsourcing provider there is. Give the Philippines a chance. You won’t regret it.

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