BPO vs KPO: What Are the Key Differences You Need to Know?

Posted on:
August 12, 2022
min read
Mark Daniel
Table of Contents
What are the benefits of outsourcing to developing countries?
What are the challenges of outsourcing to developing countries?
Top 5 Most In-demand Developing Countries for Outsourcing
What are some successful examples of companies that have outsourced to developing countries?
What are the best practices for outsourcing to developing countries?
BPO vs KPO: What Are the Key Differences You Need to Know?
KDCI Outsourcing
September 6, 2023

BPO vs KPO — these terms are often compared in terms of their scope of support, processes, and degree of complexity. But what sets them apart from each other? Most importantly, how will you know if your business needs BPO support or KPO support? Let's find out by highlighting the critical differences in this blog post.

Everything about Business Process Outsourcing (BPO)

You've probably heard of BPO before. Certainly, when you hear it, you might think of customer service operations. However, customer service is only a minor service under BPO. Let's learn more about the BPO industry and the services you may want to outsource in the future.

What is BPO, and how does it work?

Business process outsourcing (BPO) is simply the practice of hiring a third-party service provider to perform a critical business function or task. Meanwhile, a BPO company is a company that provides specialized services to businesses to perform their non-core activities.

For example, your company may decide that hiring customer support from another company is more efficient than hiring full-time employees. The BPO company you hire will act as an extension of your company, providing a wide range of services, including but not limited to back-office support.

When moving your operations externally, it's crucial to consider the following for a successful outsourcing venture:

  • Business functions to be outsourced
  • Goals and objectives of outsourcing
  • Linking outsourcing to corporate strategy
  • Relationship between outsourcing and the company's core competencies
  • Factors influencing the organization's decision to outsource
  • Scope of services to be outsourced
  • Risks associated with outsourcing
  • Duration of the outsourcing relationship with the vendor

What are the different types of BPO?

Most businesses turn to these three types of BPO: nearshoring, offshoring, and onshoring. While they all refer to paying a service provider to do work for your company, it's important to know their main differences.


It refers to the practice of outsourcing to a third-party company located in a different geographic location, preferably nearby or on the same continent. For example, companies in the United States that outsource to Canada or Mexico practice nearshoring.


It is an approach to outsourcing in which certain parts of a company are relocated to another country. An example of offshoring is when a company based in the US decides to build its marketing team in the Philippines to cut operational costs.


Unlike offshoring, this type of outsourcing enables businesses to relocate their operations to a lower-cost location within the country. For example, a US tech company could "onshore" their customer support by closing a call center in India and opening one in Tennessee.

It refers to the practice of outsourcing to a third-party company located in a different geographic location, preferably nearby or on the same continent. For example, companies in the United States that outsource to Canada or Mexico practice nearshoring.

A dedicated bpo team, comprised of five diligent Asian staff members, working diligently inside the office with a laptop on.

What are some examples of BPO services?

The BPO industry has a long list of services you can choose from. To sum up, these are some critical functions you should outsource as you grow your business:.

1. Back office support

Back-office support roles are not directly related to customer service, but they improve customer experience. This service encompasses a variety of tasks such as admin support, data management, and record maintenance. Here at KDCI, we offer the following back-office support services:

2. Finance and accounting​

It's a service that gives businesses access to a full accounting department. In general, it handles your daily transaction coding, accounts payable, accounts receivable, payroll, and management financial reporting with consultation and planning. KDCI has been providing the following finance and accounting services to our valued clients:

  • Bookkeeper / Accountant
  • Accounts Payable Specialist
  • Accounts Receivable Specialist
  • Financial Statement Prep
  • Revenue Accounting Expert

3. Contact center services

This service employs a variety of innovative channels to resolve customer issues promptly. In addition, it offers multichannel and omnichannel contact center services. Let's go over their main differences to grasp their customer service roles better.

Multichannel contact center services let customers interact with agents over multiple channels such as phone, email, or live chat.

Meanwhile, omnichannel contact center services cover the entire client journey. It functions on all conceivable channels, just like a multichannel contact center, but it has more advantages.

The services in a multichannel contact center do not overlap, resulting in gaps in overall operations. As a result, agents must frequently re-enter data and repeat issues while switching between channels. This isn't wholly a drawback because some processes, such as data management and financial services, would benefit from having their own workflow.

On the other hand, omnichannel means that all information is shared across many platforms. This enables agents from several channels to collaborate to resolve customer issues quickly.

4. Call center services

It refers to a service designed to handle customer inquiries, usually relating to a company's products or services. This service has two different types: inbound call centers and outbound call centers.

An inbound call center service receives incoming calls from customers. Unlike outbound call center services, which are focused on sales, this sort of call center is focused on taking incoming customer phone calls.

While inbound call center services prioritize customer service, outbound call center services give businesses outgoing sales and marketing functions to generate leads and sales.

Outbound call center services aim to contact as many potential or existing customers as possible and sell or market a product or service within a specific time limit. Outbound agents call prospective customers to uncover greater upsell and cross-sell chances.

5. IT services

In general, this service provides a wide range of information technology roles businesses require. It encompasses services such as infrastructure, maintenance, support, and software development and programming. Below are some of the frequently outsourced IT functions:

  • Development of applications/software
  • Web design and hosting
  • Application support or management
  • Help desk/technical assistance
  • Database creation and management

6. Healthcare BPO

This type of BPO service provides healthcare providers with intelligent health operations. Here, service providers remotely manage complex clinical workflows.

Healthcare facilities and hospitals can focus on their core competencies by outsourcing non-core tasks like medical billing and transcription. Below are some examples of in-demand healthcare BPO services:

  • Medical Coding And Billing
  • Claims Processing
  • Data Entry Services
  • Medical Transcription
  • Medical Records Indexing Process

7. Legal BPO​

Legal BPO refers to services that a law firm or corporation outsources to obtain information-driven legal knowledge relevant to the overall litigation process.

Rather than using dedicated internal resources, discrete legal services are outsourced to outside firms, local lawyers, or paralegals. Some of the offshore legal professional roles that law firms may hire are listed below:

  • Legal Transcriptionist
  • Paralegal
  • Legal Secretary
  • Corporate Lawyer
  • Legal Assistant
  • Liaison Officer

Everything about Knowledge Process Outsourcing

Knowledge Process Outsourcing (KPO) has been around for a long time. However, it does not receive nearly as much attention as BPO. They are, in fact, interconnected, and their differences are not as stark as you might think. Get to know more about KPO and determine if this is what your business needs today.

kpo vs bpo, outsourcing asian staff smiling at the camera

What is KPO, and how does it work?

KPO is another type of outsourcing in which knowledge and information functions are outsourced to third-party service providers. KPO intends to provide a more focused set of expert services in areas such as research, marketing, and data analytics.

To sum up, KPO hires highly trained and professionally qualified individuals. Meanwhile, BPOs hire people with simply a high school diploma, good communication skills, and a basic understanding of computers.

Again, KPO is a subset of BPO. That means it is nothing but an extended version of BPO. While BPO focuses on the organization's low-level procedures and peripheral operations, KPO focuses on knowledge, information, and high-level processes.

What are some examples of KPO services?

Businesses that require in-depth knowledge, judgment, and subject matter expertise in their domain can choose KPO services. Services that rely on specialist expertise are stated as follows.

1. Financial consulting

Businesses can use this service to understand better their assets and what they want them to accomplish for them in the future. A financial consultant, for example, can propose the sort of retirement account to use, suggest specific investments, and answer concerns about how much to save if you want to prepare for retirement but aren't sure how.

2. Management consulting

This service assists businesses in improving their performance by providing expert guidance on how to handle challenges and expand.

In simple terms, this service provides clients with an audit of current procedures, improvement recommendations, and an execution plan. For example, they might be hired by a company to advise top management on a specific project or the company's overall structure and operations.

3. Research and development​

An organization may choose to outsource if the research involves a specific experiment that cannot be carried out in-house. They will not only have access to advanced technologies. They can also save money on research-related facilities and equipment.

4. Data analytics​

Here, businesses can entrust their data to a service provider in exchange for intelligent reporting. At the same time, the service provider manages infrastructure, data management, and data analysis.

5. Creative design​

This service encompasses all parts of design services, including print, graphics, web design, motion graphics, and content production. Your business should outsource this service to get a brand new perspective on your branding and marketing strategy.

Which one is better for your business?

If you're still on the fence about outsourcing either of these two, you need to understand what your business needs first. 

Do you seek support with your non-core business tasks so that you can concentrate on your core functions? If yes, you may need to outsource services such as customer service and technical support under BPO. 

Do you require a specialist's in-depth knowledge to solve complex business issues? If yes, you'll need KPO services to handle more specialized, analytical, and knowledge-based tasks.

If you want to inquire more about KPO services, such as creative design and marketingKDCI is ready to walk you through. Do you want to learn more about our services? Then, contact us today to get your FREE consultation with one of our experts.

Contact Us

Share via:
Build Your
Outsourcing Team
Talk to us about outsourcing needs
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Related Articles
We Provide Amazing Services
Our training and strategic outsourcing services have helped thousands of organizations succeed
Get in touch with us
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Philippine Office
3008 One Corporate Centre, Julia Vargas Avenue, Ortigas Center, Pasig City 1605, Metro Manila, Philippines
USA Office
552 E Carson St. Suite 104, Carson, CA 90745, USA
Contact Sales
Contact Recruitment