September 2007

Knowledge process outsourcing (KPO)
Probably the newest kid on the block.

Competitive intelligence – companies are increasingly wanting more detailed intelligence about their competitors which makes it easier compare and contrast and enables clearer positioning to assist in the bid process. Most of this data is not available publicly and is gathered by research. Previously this intelligence was considered too sensitive or client-specific to outsource but the pace of market change, limited internal resources, lack of enterprise competitive intelligence and the need to fill information gaps is fuelling this KPO market.

360 degree profile of the customer – corporates are looking to gain a tactical edge in the identification and pursuit of business by commissioning research on: organisation structure, centralised and decentralised decision-making and budget processes, vision, strategy, geographic footprint, technology spending forecasts, competitors’ share of budget, SWOT analyses, biographies of the management team and financial performance analysis. Once regarded as the knowledge preserve of the business development or accounts teams, the gathering and analysis of strategic and tactical information on major existing or potential clients is now seen as a key battleground where marketing, not sales, owns the research budget and outcome. 360 Degree builds are being requested to: identify unrealised value in existing client accounts; map “cold-spots” – where a costly business development team should not focus their time and attention for at least 12-18 months and to discover “white space” where swift and effective engagement could give you the decisive edge.

Hot-spot identification – a granular examination of market segments using value chain analysis, gap analysis, concentration & profitability analysis, trend analysis, in order to isolate hot-spots. Historically this was undertaken either internally through consolidating industry-specific syndicated research providers or via a trusted management consultancy brand. Now however, large corporates are wanting fresh research from all relevant sources in order to build a unique hot-spot picture beyond the conventional-wisdom approach of traditional suppliers.

Emerging, growing and new market evaluations – to examine, explore and size the market potential for emerging and growing industries, for example: offshoring, digital rights management, customer intelligence software, location-based services, SOX compliance solutions, and so on. The skepticism that today’s CEOs and investors have with existing forecasting models indicating exponential rates of adoption, irrespective of the market being examined, is driving firms towards to more rigorous approaches to qualitative and quantitative assessment provided by KPO suppliers.

Tracking industry developments – subscription based or ad-hoc service to large companies for tracking specific developments in a particular domain, for example, M&A, new product launches, executive moves, adoption curve of emerging technologies, market share and rankings. We are finding that there is rapidly growing demand for this type of customised service as an alternative or complement to syndicated research services. This is a KPO monthly reporting process providing: earlier insight; internal time and cost savings from outsourcing the triangulation and distillation of data from multiple sources; and deeper market and segment analysis.

Outsourced marketing team members – additional research project team members to help on time-critical work. This is the inevitable result of getting close to clients via KPO work in described in all of the above categories.

KPO is still maturing, but as a subset of business process outsourcing, it is becoming more prevalent within market research circles. The key of course, is the need for up-to-date and accurate information. This is driven not only by a proactive desire to use better intelligence to gain market share, but as a defence against new entrants and the need for compliance in an increasingly highly regulated business environment.