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Numbers bit too outstretched

It was estimated that the KPO industry will have a CAGR of 80%-90% i.e. $ 12 billion by 2010. But there is a possibility that the Indian knowledge process outsourcing (KPO) market will not

be able to touch the projected $ 12 billion by 2010. The projected figure is not easily achievable. This is because the organizations are still doing selective outsourcing.

The growth in KPO market is more than the growth in IT/BPO market. Reasons being:

Many companies are not comfortable in outsourcing work to third parties. They prefer to do it themselves.
There are so many entry barriers for professionals who are experts in KPO segment.

If $ 20 per hour is charged (which is the minimum fee being charged) then only $ 8 billion can be achieved by 2010 but not $ 12 billion. KPOs are growing at a fast rate, but how fast? - this is difficult to find out.

Whereas a recent Evalueserve report says that the KPO industry is doing pretty well and will soon achieve the targets set. It also says that till 2010 KPO industry will start following the vendor model (buy) instead of captive model (make). Also dual outsourcing will increase, i.e. outsourcing work to captives plus external vendors.

But irrespective of the debate, companies are outsourcing non core activities like accrual services, equity research, treasury operations, credit decision processes, etc.