Knowledge process outsourcing (KPO) will help the Indian market move up the value chain beyond mere processing, said Anish Nanavaty, CEO knowledge services at WNS. “We believe the industry is at a real watershed point; there is an opportunity for us to add a lot of value to our customers,” he said in a challenging presentation to the FT Outsourcing conference in London this week.

So far, the definition of KPO has been driven incrementally by the many small ways in which people have been exposed to the industry, so what is it? Nanavaty claims it can be explained as the creation of knowledge-based shared services centres for solving a full range of business problems, within which issues are broken into analytic building blocks and solved by specialists with what he described as “factory-like efficiencies”.

In the developed world some of this knowledge is currently aggregated within the major consultancies, as this is fundamentally their product. “These companies are now trying to outsource the lower-end steps towards gathering information and knowledge,” he said.

The opportunity for outsourcers, he concluded, was to move further and further up the value chain and “democratise the consumption of analytics”. In other words, to lay open business information to all parts of the organisation and not just those with the most need, or which have historically “owned” the data.

If Nanavaty is correct, then the challenge for companies is twofold and obvious: management, and business culture, both of which often leave knowledge lying in silos of accounting, marketing, communications, and so on. A possible future for KPO, then: helping companies who are unable to communicate internally. The client's CEO and CIO might approve, but I hear middle-management rebellion on the horizon...

The other (linked) issues moving forward, are security, due diligence, and regulation. As more and more intellectual property-driven industries, such as big pharma and IT, move to a KPO model, then providers are going to need an almost obsessive security and anti-corruption regime embedded within their own organisations to ensure all those 'Chinese walls' are not paper thin.