Financial services KPO industry to become $5 billion by 2010: Report

New Delhi, Feb 14 (UNI) The Indian Knowledge Process Outsourcing (KPO) industry will have revenues in the range of 10-17 billion dollars by 2010 a study said and added that financial KPO alone will have a value of five billion dollars.

According to global consultancy firm KPMG, the industry financial services KPO market in the country is growing due to reasons such as availability of high quality and often certified talent in offshore locations, moves taken to push outsourcing strategies beyond traditional businesses and global recognition of standards, qualifications, skills and experience.

''Success in offshoring business operations has encouraged many multinationals to start outsourcing key business processes and high-end knowledge work. Cost savings, operational efficiencies, access to a highly talented workforce and improved quality are all expectations driving the offshoring of high-end knowledge based processes,'' Global Partner-in-Charge Sourcing Advisory KPMG, Pradeep Udhas said.

India is expected to remain a preferred location for KPO activity, but organizations are expected to look for alternative locations for additional delivery centers, both from a customer and service provider perspective.

There are a few limitations on the potential growth of the KPO industry over the next three years. Issues that can potentially hamper that growth include skill set shortage, a declining US dollar and compliance and regulatory pressures.

KPO delivers high value to organisations by providing domain-based processes and business expertise rather than just process expertise. These processes demand advanced analytical and specialized skill of knowledge workers that have domain experience.

Some of the key challenges that can emerge in the KPO industry are maintaining higher quality standards, investment in KPO infrastructure, lack of talent pool, requirement of higher level of control, confidentiality and enhanced risk management.

''Just a few years ago, talk of KPO seemed far-fetched, especially as businesses were still struggling to come to terms with what the earlier forms of outsourcing could do for them. Our study looks at the financial services KPO space which is driving the KPO evolution. Along the way we aim to show that KPO is a business phenomenon in its own right, not merely an elaboration of Business Process Outsourcing,'' Edge Zarrella, Global Partner-in-Charge IT Advisory KPMG said.

KPO may still only represent a small percentage of the total outsourcing market but, with the financial sector demonstrating just what it can be used for, I think that all of these numbers are set to increase significantly,'' he added.

UNI BJR PDT BD1950