Knowledge Process Outsourcing Market Size, Share & Trends Analysis Report By Service, By Application (BFSI, Healthcare, IT & Telecom, Manufacturing, Pharmaceutical, Retail), By Region, And Segment Forecasts, 2018 - 2025

Report Overview

The global knowledge process outsourcing market size to be valued at USD 124.29 billion by 2025. The increasing need for higher flexibility in Service Level Agreements (SLAs) and ease in change management practices along with cost-cutting is anticipated to boost the growth of the knowledge process outsourcing (KPO) industry.

Outsourcing critical processes involved in their system enables industries to save a significant amount of time and money. The rising demand for professional services such as training, research, managed services, and maintenance is further instrumental in accelerating the industry's growth. In emerging economies such as China, India, and Philippines, there are highly skilled professionals such as engineers, lawyers, and architects among others who are ready to provide professional services at lower costs as compared to their western counterparts.

The presence of an abundance of data across the globe has made it difficult to extract useful information from the available sources. In such a case, companies approach KPO firms that hire knowledge experts in various fields and apply different tools for analyzing business processes and simplifying decision making.

However, increasing regulations pertaining to unemployment in specific regions, owing to lack of talent, are expected to hamper the growth of the market. Moreover, skilled workforce is paid average salaries and expected to perform tasks at a low cost as KPO firms are facing high attrition issues, thereby posing a challenge to the market growth.

Knowledge Process Outsourcing Market Trends

The increased competition in global business has resulted in a shorter product and service introduction cycle time. Customers want high-quality services therefore businesses need to implement processes and business models that not only increase operational efficiency but add strategic value to their products and services. KPO assists businesses in reducing design-to-market lead times, managing key hardware efficiently, conducting market research and competition, product and service research, and improving organizational efficiency in business administration, and dealing with changing business scenarios. KPO's value proposition is to offer enhanced services and customized solutions.

KPO service providers are a realistic choice for businesses. A variety of large and small businesses serve as third-party service providers enhancing KPO services. One of the main advantages of using third-party service vendors is that operations are scaled up according to the need. Third-party vendors on the other hand provide clients with more customization and flexibility.

One of the segments to showcase good growth is engineering design outsourcing often known as Engineering Services Outsourcing (ESO) which is the practice of outsourcing engineering-related work to other organizations in order to take the cost advantage. In Europe, for example, an intensive automobile design costs USD 800 per man-hour, whereas, in India, it costs USD 60 per man-hour. ESO comprises outsourcing a variety of tasks, including design, manufacture, and maintenance. Automotive, aerospace, hi-tech/telecom, utilities, and construction/industrial machinery are among the key industrial sectors that profit from ESO.

Almost all organizations in today's world are data-driven, and this data aids firms in developing new goods and providing better service to clients. With the growing relevance of data in enterprises, every industry is observing an increase in demand for knowledge process outsourcing.

KPO industry faces challenges like shortage of manpower and knowledge issues concerns for data security and poor infrastructure, and rise in real-state costs. All of these factors combined tend to be huge challenges for the industry to grow and prosper. For example, the KPO industry requires professionals with the right skill-sets and domain knowledge but there’s a shortage of such professionals especially in developing economies.

COVID-19 had a severe and huge impact all around the globe. Outsourcing firms are shifting to cloud-based work platforms, which aid in the reduction of manual labor, lead to job automation, and increase staff productivity. However, the IT industry will soon rebound, and outsourcing firms concentrate on long-term investments and retain contact with prospects and partners.

Services Insights

Legal process outsourcing is estimated to emerge as the fastest growing service segment in the knowledge process outsourcing market, owing to the efficiency of services provided and reduction in cost. The segment is expected to grow at a CAGR of 21.5% from 2017 to 2025. Legal functions that are usually outsourced include legal analytics, contract management, and litigation management.

Analytics and market research services have captured the largest market share in the KPO industry due to an increased demand for business intelligence and analytical tools that reduce employee burden. The analytics and market research segment was valued at a market size of USD 10.54 billion in 2016.

Apart from these, other services, which include engineering & design, financial process, and research & development outsourcing, are expected to grow at a faster pace over the forecast period. Technological advancements have resulted in the development of new tools to provide knowledge-based services to clients.

Application Insights

The adoption of knowledge process outsourcing services in IT & telecom sector is gaining traction. The segment is presumed to grow at a CAGR of 20.8% over the next eight years. Owing to extensive database in the IT and Telecom sector that is fragmented and increasing over a period of time is expected to accelerate the market growth over the forecast period.

The BFSI segment is dominating the market owing to large number of applications in the segment. The BFSI segment includes sensitive information regarding customers and financial databases of numerous banks. In order to maintain information efficiently, companies outsource processes such as financial analytics, equity research, and data management, among others. Few companies that provide financial services to other firms are CRISIL Ltd., Credit Suisse Group AG., and WNS (Holdings) Ltd. among others.

Regional Insights

The Asia Pacific region was valued at USD 22.23 billion in the year 2016 that dominated the market with a maximum number of KPO firms and consultancies in the region. This can be attributed to the rapid off-shoring of critical processes and professional services. The increasing presence of skilled professionals such as engineers, architects, lawyers in emerging economies, such as India, China, and Philippines, is driving the market growth.

Latin America is expected to emerge as the fastest-growing region that is anticipated to reach a CAGR of 20.0% over the next eight years. Enterprises in the region are increasingly focusing on R&D and developing their analytical insights, which is estimated to propel the market growth over the forecast period.

Key Companies & Market Share Insights

Prominent players dominating the market include Accenture, EXL Services, Genpact, McKinsey and Company, Moody’s Investors Service, Inc., Mphasis, RR Donnelley & Sons Company, Wipro Limited, and HCL, among others.

Industry players are primarily focusing on exploring opportunities in order to develop newer ways and techniques for offering their services to clients. In a bid to maintain a strong position in the market, companies have appointed different teams for performing research on tools and implementing them while providing services to clients. For Instance, in 2016 McKinsey launched a new brand named Digital McKinsey, that comprised special team of data engineers, developers, designers, and advanced analysts among others. On the similar grounds Accenture PLC (U.S.) launched a Digital Hub in 2017, responsible for development and delivering solutions to the clients.

Recent Developments

• In April 2022, ExlService Holdings, Inc. was selected by HealthPartners (U.S.) to develop a next-generation care management platform. HealthPartners can now integrate its population health analytics directly with its care management process, resulting in more focused, timely, and successful interventions as well as increased member engagement.

• In July 2021, Accenture acquired HRC retail advisory to increase retail strategy capability. According to Accenture, HRC Retail Advisory has a long history of assisting large retailers across North America in improving profitability and working capital while better satisfying expanding customer, employee, and investor expectations.

• In May 2022, Wipro Limited and Informatica declared a partnership to deliver cloud-based data analytics to the market with the Wipro fullstride cloud data platform. Wipro’s well-known analytics, data, and artificial intelligence (AI) skills, paired with Informatica’s comprehensive AI-powered data management solution, will aid cloud-based transformations to achieve scale.

Knowledge Process Outsourcing Market Report Scope

Global Knowledge Process Outsourcing Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global knowledge process outsourcing (KPO) Market on the basis of services, applications, and regions:

• Service Outlook (Revenue, USD Million; 2014 - 2025)

  • Analytics & Market Research

    • Customer & Marketing Analytics

    • Operations & Supply Chain Analytics

    • Competitive Intelligence & Industry Analysis

  • Engineering & Design

  • Financial Process Outsourcing

  • Legal Process Outsourcing

  • Publishing Outsourcing

  • Research & Development Outsourcing

  • Others

• Application Outlook (Revenue, USD Million; 2014 - 2025)

  • BFSI

  • Healthcare

  • IT & Telecom

  • Manufacturing

  • Pharmaceutical

  • Retail

  • Others

• Regional Outlook (Revenue, USD Million; 2014 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

  • Asia Pacific

    • China

    • Philippines

    • India

  • Latin America

    • Brazil

  • Middle East & Africa (MEA)