Knowledge process outsourcing to grow in '08, says UK group

2008 will be the year that knowledge process outsourcing -- the outsourcing of high-value-add functions -- takes massive strides in the U.K., the National Outsourcing Association (NOA) has forecast as part of its annual trends survey.

The outsourcers' group reckons that knowledge process outsourcing, which covers areas like research and development, will benefit from increasing levels of trust in business process outsourcing.

"Now that companies have observed the benefits of trusting others to perform functions such as payroll, they have started to place faith in external organisations to carry out mission critical operations," said the NOA.

It predicted that 2008 would also see "the looming credit crisis lead to an upturn in outsourcing.

"The downturn in the economy and possible recession will see increasing numbers of C-suite executives view technology and outsourcing as solutions to the need to slash overheads and minimise any negative impact on the bottom line," it forecast.

Martyn Hart, chairman of the NOA, said the continued rise of the BPO market was a "noteworthy development" last year and the rise of knowledge process outsourcing would follow "on the tail of this".

"Companies are increasingly trying to use the intelligence and expertise of their suppliers in order to maximize outsourcing arrangements. The credit crunch will create a situation whereby outsourcing will offer a solution to business needs and the maximization of outsourcing, through knowledge process outsourcing and innovation, will mean that the effect that outsourcing has on companies' bottom lines will grow," said Hart.

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