Profession versus Professionalism

I was trying to analyze the definition of words Profession, Professional Body and Professionalism on www.reference.com. (These words are interchangeable used when the Accountants discuss among themselves.)

Profession:

A profession is an occupation, vocation or career where specialized knowledge of a subject, field, or science is applied. It is usually applied to occupations that involve prolonged academic training and a formal qualification. It is axiomatic that “professional activity involves systematic knowledge and proficiency.” Professions are usually regulated by professional bodies that may set examinations of competence, act as a licensing authority for practitioners, and enforce adherence to an ethical code of practice.

Professional Body:

A professional body or professional organization, also known as a professional association or professional society, is an organization, usually non-profit, that exists to further a particular profession, to protect both the public interest and the interests of professionals. The balance between these two may be a matter of opinion. On the one hand, professional bodies may act to protect the public by maintaining and enforcing standards of training and ethics in their profession. On the other hand, they may also act like a cartel or a labor union (trade union) for the members of the profession, though this description is commonly rejected by the body concerned.

Many professional bodies perform professional certification to indicate a person possesses qualifications in the subject area, and sometimes membership in a professional body is synonymous with certification, but not always. Sometimes membership in a professional body is required for one to be legally able to practice the profession; see licensure.

Professionalism

Oxford Dictionary: the competence or skill expected of a professional.

Graham Ward in IFAC website: Professionalism, is about individual modes of behaviour that command respect and build trust. It is about excellence in service as measured by recognised standards.It is about delivering services or working to standards that meet the needs of and are expected by our clients.

Such behaviours are indeed a necessary part of belonging to a profession but almost any trade could be described as professional in these terms!

As any of us here knows, what separates the professionalism of members of a professional body from the behaviours of other types of so-named professionals, is the requirement to continually reinforce and demonstrate our professionalism, not merely assert it through a one-off qualification. And it is our membership of a professional body – one which embodies the distinguishing features I have defined – that confers on us the obligation to abide by professional standards and regulation.

It is therefore no longer enough for professions to say to the public ‘you must trust me’, today we must earn that trust and demonstrate: clearly, openly and often, why that trust should be given.

Of the above three words, I had to search a lot on the word “Professionalism” to find a true meaning to suit accountancy profession. Members of accountancy profession will be normally be expected to take actions that contribute to the public interest.

The Principle of Professional Conduct on AICPA, US website summarizes Professionalism in a precise manner.

Section 51: These Principles of the Code of Professional Conduct of the American Institute of Certified Public Accountants express the profession’s recognition of its responsibilities to the public, to clients, and to colleagues. They guide members in the performance of their professional responsibilities and express the basic tenets of ethical and professional conduct. The Principles call for an unswerving commitment to honorable behavior, even at the sacrifice of personal advantage.

Section 52: In carrying out their responsibilities as professionals, members should
exercise sensitive professional and moral judgments in all their activities.

Section 53: Members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.

Section 54: To maintain and broaden public confidence, members should perform
all professional responsibilities with the highest sense of integrity.

Section 55: A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. A member in public practice should be independent in fact and appearance when providing auditing and other attestation services.

Section 56: A member should observe the profession’s technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of the member’s ability.

Section 57: A member in public practice should observe the Principles of the Code of Professional Conduct in determining the scope and nature of services to be provided.

I would like to see your comments and views on this topic. Please feel free to comment on the blog post.

Regards,

Santosh Puthran

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1. Ethics on ACCA website 11-Feb-2008
2. Combined of Corporate Governance UK 20-April-08
3. 100 Most Influential People in Business Ethics 18-Feb-08
4. Professional Body 28-April-07
5. Accountancy Profession in India 22-May-08
6. Membership of Accounting Body – Value Proposition 20-Mar-08
7. The Audit Cartel – Prem Sikka in Guardian 06- June-08
8. How to Share Blog posts with friends 25-May-08
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Profession versus Professionalism

I was trying to analyze  the definition of words Profession, Professional Body and Professionalism on www.reference.com.  (These words are interchangeable used when the Accountants discuss among themselves.)

Profession:

A profession is an occupation, vocation or career where specialized knowledge of a subject, field, or science is applied. It is usually applied to occupations that involve prolonged academic training and a formal qualification. It is axiomatic that "professional activity involves systematic knowledge and proficiency." Professions are usually regulated by professional bodies that may set examinations of competence, act as a licensing authority for practitioners, and enforce adherence to an ethical code of practice.

Professional Body:

A professional body or professional organization, also known as a professional association or professional society, is an organization, usually non-profit, that exists to further a particular profession, to protect both the public interest and the interests of professionals. The balance between these two may be a matter of opinion. On the one hand, professional bodies may act to protect the public by maintaining and enforcing standards of training and ethics in their profession. On the other hand, they may also act like a cartel or a labor union (trade union) for the members of the profession, though this description is commonly rejected by the body concerned.

Many professional bodies perform professional certification to indicate a person possesses qualifications in the subject area, and sometimes membership in a professional body is synonymous with certification, but not always. Sometimes membership in a professional body is required for one to be legally able to practice the profession; see licensure.

Professionalism

Oxford Dictionary: the competence or skill expected of a professional.

Graham Ward in IFAC website: Professionalism,  is about individual modes of behaviour that command respect and build trust. It is about excellence in service as measured by recognised standards.It is about delivering services or working to standards that meet the needs of and are expected by our clients.

Such behaviours are indeed a necessary part of belonging to a profession but almost any trade could be described as professional in these terms!

As any of us here knows, what separates the professionalism of members of a professional body from the behaviours of other types of so-named professionals, is the requirement to continually reinforce and demonstrate our professionalism, not merely assert it through a one-off qualification. And it is our membership of a professional body – one which embodies the distinguishing features I have defined – that confers on us the obligation to abide by professional standards and regulation.

It is therefore no longer enough for professions to say to the public ‘you must trust me’, today we must earn that trust and demonstrate: clearly, openly and often, why that trust should be given.

 

Source: Formula One Cars

 

Of the above three words, I had to search a lot on the word "Professionalism" to find a true meaning to suit  accountancy profession. Members of accountancy profession will be normally be expected to take actions that contribute to the public interest.

The Principle of Professional Conduct on AICPA, US website  summarizes Professionalism in a precise manner.

Section 51: These Principles of the Code of Professional Conduct of the American Institute of Certified Public Accountants express the profession’s recognition of its responsibilities to the public, to clients, and to colleagues. They guide members in the performance of their professional responsibilities and express the basic tenets of ethical and professional conduct. The Principles call for an unswerving commitment to honorable behavior, even at the sacrifice of personal advantage.

Section 52: In carrying out their responsibilities as professionals, members should
exercise sensitive professional and moral judgments in all their activities.

Section 53: Members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.

Section 54: To maintain and broaden public confidence, members should perform
all professional responsibilities with the highest sense of integrity.

Section 55: A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. A member in public practice should be independent in fact and appearance when providing auditing and other attestation services.

Section 56: A member should observe the profession’s technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of the member’s ability.

Section 57: A member in public practice should observe the Principles of the Code of Professional Conduct in determining the scope and nature of services to be provided.

I would like to see your comments and views on this topic. Please feel free to comment on the blog post.

Regards,

 

Santosh Puthran

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1. Ethics on ACCA website 11-Feb-2008
2. Combined of Corporate Governance UK 20-April-08
3. ICWAI Code of Ethics
4. 100 Most Influential People in Business Ethics 18-Feb-08
5. Professional Body 28-April-07
6. Accountancy Profession in India 22-May-08
7. Membership of Accounting Body – Value Proposition 20-Mar-08
8. The Audit Cartel – Prem Sikka in Guardian 06- June-08
9. How to Share Blog posts with friends 25-May-08
10. Management Accountant Blog Home

Source: British Superbike Practice

 

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Ethical Decision Making

Recently BBC uncovered in the report on Child Labour practices in India where suppliers of the clothes of high street retailer Primark had used child labour to finish the goods. Primark fired all the three firms involved. The question is about Ethics and Ethical values.

What is Ethics ?

Business ethics is the broadest of the three terms. It addresses the morality of both economic systems (e.g., the free market, socialism, communism) and the conduct of the organizations found within these systems (e.g., corporations in a free market system).

Corporate ethics may be viewed as a subset of business ethics. Corporate ethics focuses specifically on issues of morality associated with business enterprises. These include relations internal to the organization (e.g., treatment of employees, dealings with shareholders, questions concerning product quality and customer service, etc.) as well as external relations (e.g., interactions with government, specific communities, society as a whole, the impact of corporate activities on the natural environment, etc.).

Source: Hovefly

Ethical dilemmas

An ethical dilemma is a situation that will often involve an apparent conflict between moral imperatives, in which to obey one would result in transgressing another.

Eg.

• Trading with rogue governments can be seen as either contribution to the continuation of the regime or supporting economic growth that benefits all concerned
• If a foreign subsidiary of a company is operating in a country where it is legal to employ child labour, should the company take advantage of it ?
• Should you bribe to get your work done ? In some countries it is a common practice where it is referred as Suvidha or Baksheesh.

An article on on Santa Clara University explains ” A Framework on Ethical Decision Making”

Recognize an Ethical Issue

1. Is there something wrong personally, interpersonally, or socially? Could the conflict, the situation, or the decision be damaging to people or to the community?

2. Does the issue go beyond legal or institutional concerns? What does it do to people, who have dignity, rights, and hopes for a better life together?

Get the Facts

3. What are the relevant facts of the case? What facts are unknown?

4. What individuals and groups have an important stake in the outcome? Do some have a greater stake because they have a special need or because we have special obligations to them?

5. What are the options for acting? Have all the relevant persons and groups been consulted? If you showed your list of options to someone you respect, what would that person say?

Evaluate Alternative Actions From Various Ethical Perspectives

6. Which option will produce the most good and do the least harm?

Utilitarian Approach: The ethical action is the one that will produce the greatest balance of benefits over harms.

7. Even if not everyone gets all they want, will everyone’s rights and dignity still be respected?

Rights Approach: The ethical action is the one that most dutifully respects the rights of all affected.

8. Which option is fair to all stakeholders?

Fairness or Justice Approach: The ethical action is the one that treats people equally, or if unequally, that treats people proportionately and fairly.

9. Which option would help all participate more fully in the life we share as a family, community, society?

Common Good Approach: The ethical action is the one that contributes most to the achievement of a quality common life together.

10. Would you want to become the sort of person who acts this way (e.g., a person of courage or compassion)?

Virtue Approach: The ethical action is the one that embodies the habits and values of humans at their best.

Make a Decision and Test It

11. Considering all these perspectives, which of the options is the right or best thing to do?

12. If you told someone you respect why you chose this option, what would that person say? If you had to explain your decision on television, would you be comfortable doing so?

Act, Then Reflect on the Decision Later

13. Implement your decision. How did it turn out for all concerned? If you had it to do over again, what would you do differently?

If you as an Accountant are faced with Ethical dilemmas, apply the above principles. Further refer to your institute’s code of ethics. If you are still in doubt, then consult your Institute or Association.

I would like to hear your views on this subject for further discussion. You are welcome to comment on this blog post.

Regards,

Santosh Puthran

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1. Ethics on ACCA website 11-Feb-2008
2. Combined of Corporate Governance UK 20-April-08
3. 100 Most Influential People in Business Ethics 18-Feb-08
4. Professional Body 28-April-07
5. Resistance to Change 26-Apr-08
6. Business, Customer Value & Management Accounting 19-June-08
7. Activity Based Management – Dispelling the myths Par I – 13-June-08
8. How to Share Blog posts with friends 25-May-08
9. Management Accountant Blog Home

Read Full Post »

Ethical Decision Making

Recently BBC uncovered in the report on Child Labour practices in India where suppliers of the clothes of high street retailer Primark had used child labour to finish the goods. Primark fired all the three firms involved. The question is about Ethics and Ethical values.

What is Ethics ?

Business ethics is the broadest of the three terms. It addresses the morality of both economic systems (e.g., the free market, socialism, communism) and the conduct of the organizations found within these systems (e.g., corporations in a free market system).

Corporate ethics may be viewed as a subset of business ethics. Corporate ethics focuses specifically on issues of morality associated with business enterprises. These include relations internal to the organization (e.g., treatment of employees, dealings with shareholders, questions concerning product quality and customer service, etc.) as well as external relations (e.g., interactions with government, specific communities, society as a whole, the impact of corporate activities on the natural environment, etc.).

Source: Hovefly

Ethical dilemmas

An ethical dilemma is a situation that will often involve an apparent conflict between moral imperatives, in which to obey one would result in transgressing another.

Eg.

• Trading with rogue governments can be seen as either contribution to the continuation of the regime or supporting economic growth that benefits all concerned
• If a foreign subsidiary of a company is operating in a country where it is legal to employ child labour, should the company take advantage of it ?
• Should you bribe to get your work done ? In some countries it is a common practice where it is referred as Suvidha or Baksheesh.

An article on on Santa Clara University explains  " A Framework on Ethical Decision Making"

Recognize an Ethical Issue

1. Is there something wrong personally, interpersonally, or socially? Could the conflict, the situation, or the decision be damaging to people or to the community?

2. Does the issue go beyond legal or institutional concerns? What does it do to people, who have dignity, rights, and hopes for a better life together?

Get the Facts

3. What are the relevant facts of the case? What facts are unknown?

4. What individuals and groups have an important stake in the outcome? Do some have a greater stake because they have a special need or because we have special obligations to them?

5. What are the options for acting? Have all the relevant persons and groups been consulted? If you showed your list of options to someone you respect, what would that person say?

Evaluate Alternative Actions From Various Ethical Perspectives

6. Which option will produce the most good and do the least harm?

Utilitarian Approach: The ethical action is the one that will produce the greatest balance of benefits over harms.

7. Even if not everyone gets all they want, will everyone’s rights and dignity still be respected?

Rights Approach: The ethical action is the one that most dutifully respects the rights of all affected.

8. Which option is fair to all stakeholders?

Fairness or Justice Approach: The ethical action is the one that treats people equally, or if unequally, that treats people proportionately and fairly.

9. Which option would help all participate more fully in the life we share as a family, community, society?

Common Good Approach: The ethical action is the one that contributes most to the achievement of a quality common life together.

10. Would you want to become the sort of person who acts this way (e.g., a person of courage or compassion)?

Virtue Approach: The ethical action is the one that embodies the habits and values of humans at their best.

Make a Decision and Test It

11. Considering all these perspectives, which of the options is the right or best thing to do?

12. If you told someone you respect why you chose this option, what would that person say? If you had to explain your decision on television, would you be comfortable doing so?

Act, Then Reflect on the Decision Later

13. Implement your decision. How did it turn out for all concerned? If you had it to do over again, what would you do differently?

If you as an Accountant are faced with Ethical dilemmas, apply the above principles. Further refer to your institute’s code of ethics. If you are still in doubt, then consult your Institute or Association.

I would like to hear your views on this subject for further discussion. You are welcome to comment on this blog post.

Regards,

 

Santosh Puthran

Join me

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You may also like to read

1. Ethics on ACCA website 11-Feb-2008
2. Combined of Corporate Governance UK 20-April-08
3. 100 Most Influential People in Business Ethics 18-Feb-08
4. Professional Body 28-April-07
5. Resistance to Change 26-Apr-08
6. Business, Customer Value & Management Accounting 19-June-08
7. Activity Based Management – Dispelling the myths Par I – 13-June-08
8. How to Share Blog posts with friends 25-May-08
9. Management Accountant Blog Home

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Who will be a better Accountant – Shahrukh Khan or Aamir Khan ?

Shahrukh Khan and Aamir Khan are two famous personalities in Bollywood. Both are equally successful and have a huge fan following. It depends upon what you consider success? Is it female fan following or fame or money. Never mind !!!

I am looking at the traits each one has. Then let you decide who will be a better accountant. Please use your imagination which one is more suitable to be a successful management accountant.

Shahrukh Khan

• Mostly acts in movies that have contemporary themes.
• Mostly works with a same set of people and makes movies with them and repeats the success.
• He has a good PR and he tours around the world. All the tours are well publicized giving the details of what he eats, whom he meets and when he goes to sleep. This makes him known and people are interested in his next movie release.
• He is approachable and gives frequent interview on TVs.
• He started as a TV star. Sometimes he host TV quiz shows.
• People know him very well since he acts in TV commercials. He makes good use of TV as a medium to maintain his popularity.
• Sometimes experiments with movies with a different story and that gets him noticed.
• Dances very well and challenges anyone to dance with him.

Aamir Khan

• Some say he is a tough guy and he goes into minute details during movie making.
• His movies are innovative, different, story oriented and at the same time convey social theme. More focused on reality.
• He does not socialize and hates interviews.
• He prefers that his work talks for himself rather than him.
• He does not believe in awards like Filmfare but attempts for Oscars.
• He can dance very well in movies but he does not tour or dance in shows. So general public do not know whether he is interesting or boring.
• He makes few movies but they are blockbusters.
• He always gives opportunities to new people in his movies and repeats his success with new set of people.

Aamir and Sharukh Khan are successful personalities in Bollywood. To summarise the traits above are leadership style, team management, self promotion, work and standards/ethics. Both the actors are successful using these traits to a different degree.

Please vote on who will be a successful accountant in a corporate environment depending on the traits they display.

Who will be a successful Management Accountant ?
( surveys)

I would like you to use your own imagination in making your choices and also add comments on the blog post. Looking forward to see your vote and comments.

Don’t forget Rate this Blog post.

Regards,

Santosh Puthran

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1. Celebrity Accountant – Mr Praveen Kadle 23-Feb-08
2. 100 most influential people in the business 18-Feb-08
3. Successful Cost & Management Accountants 10-Feb-08
4. Resistance to Change 26-Apr-08
5. Business, Customer Value & Management Accounting 19-June-08
6. Activity Based Management – Dispelling the myths Par I – 13-June-08
7. How to Share Blog posts with friends 25-May-08
8. Management Accountant Blog Home

Read Full Post »

Who will be a better Accountant – Shahrukh Khan or Aamir Khan ?

Shahrukh Khan and Aamir Khan are two famous personalities in Bollywood. Both are equally successful and have a huge fan following. It depends upon what you consider success? Is it female fan following or fame or money. Never mind !!!

I am looking at the traits each one has. Then let you decide who will be a better accountant. Please use your imagination which one is more suitable to be a successful management accountant.

Shahrukh Khan

• Mostly acts in movies that have contemporary themes.
• Mostly works with a same set of people and makes movies with them and repeats the success.
• He has a good PR and he tours around the world. All the tours are well publicized giving the details of what he eats, whom he meets and when he goes to sleep. This makes him known and people are interested in his next movie release.
• He is approachable and gives frequent interview on TVs.
• He started as a TV star. Sometimes he host TV quiz shows.
• People know him very well since he acts in TV commercials. He makes good use of TV as a medium to maintain his popularity.
• Sometimes experiments with movies with a different story and that gets him noticed.
• Dances very well and challenges anyone to dance with him.

Aamir Khan

• Some say he is a tough guy and he goes into minute details during movie making.
• His movies are innovative, different, story oriented and at the same time convey social theme. More focused on reality.
• He does not socialize and hates interviews.
• He prefers that his work talks for himself rather than him.
• He does not believe in awards like Filmfare but attempts for Oscars.
• He can dance very well in movies but he does not tour or dance in shows. So general public do not know whether he is interesting or boring.
• He makes few movies but they are blockbusters.
• He always gives opportunities to new people in his movies and repeats his success with new set of people.

Aamir and Sharukh Khan are successful personalities in Bollywood. To summarise the traits above are leadership style, team management, self promotion, work and standards/ethics. Both the actors are successful using these traits to a different degree.

Please vote on who will be a successful accountant in a corporate environment depending on the traits they display.

Who will be a successful Management Accountant ?
( surveys)

I would like you to use your own imagination in making your choices and also add comments on the blog post. Looking forward to see your vote and comments.

Don’t forget Rate this Blog post.

Regards,

Santosh Puthran

Join us

Do you like to be updated in Accountancy ?

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Or
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Visit MA Stores ? You will find something you are looking for ….

Management Accountant Store, US – Powered by Amazon
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You may also like to read

1. Celebrity Accountant – Mr Praveen Kadle 23-Feb-08
2. 100 most influential people in the business 18-Feb-08
3. Successful Cost & Management Accountants 10-Feb-08
4. Resistance to Change 26-Apr-08
5. Business, Customer Value & Management Accounting 19-June-08
6. Activity Based Management – Dispelling the myths Par I – 13-June-08
7. How to Share Blog posts with friends 25-May-08
8. Management Accountant Blog Home

Read Full Post »

Knowledge Process Outsourcing KPO

Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost. Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.

It is being claimed that KPO is one step extension of Business Processing Outsourcing (BPO) because BPO Industry is shaping into Knowledge Process Outsourcing because of its favorable advantageous and future scope. But, let us not treat it only a ‘B’ replaced by a ‘K’. In fact, Knowledge process can be defined as high added value processes chain where the achievement of objectives is highly dependent on the skills, domain knowledge and experience of the people carrying out the activity. And when this activity gets outsourced a new business activity emerges, which is generally known as Knowledge Process Outsourcing.

Source: NYCLONDON

What high-end services can be outsourced to the Indian KPO sector?

Here are some KPO services that can be outsourced to India :

• Research & Development
• Business and Technical Analysis
• Learning Solutions
• Animation & Design
• Business & Market Research
• Pharmaceuticals and Biotechnology
• Medical Services
• Writing & Content Development
• Legal Services
• Intellectual Property (IP) Research
• Data Analytics
• Network Management
• Training & Consultancy

According to a report of National Association of Software and Services Companies (NASSCOM), the Indian chamber of commerce that serves as an interface to the Indian Software industry, Knowledge Process Outsourcing industry (KPO) is expected to reach USD 17 billion by 2010, of which USD 12 billion would be outsourced to India. Another report predicts that India will capture more than 70 percent of the KPO sector by 2010. Apart from India, countries such as Russia, China, the Czech Republic, Ireland, and Israel are also expected to join the KPO industry.

Challenges to providers

In addition to the challenges faced by clients, KPO companies themselves have challenges:

• High staff turnover, especially where work is not challenging to the employee’s skills
• High cost of training and tendency to lose the most experienced employees to the clients
• Ensuring the security and confidentiality of information, especially when privacy laws vary from country to country

Source: NYCLONDON

Creating the climate for success in India

The responsibility of setting up successful KPOs in India ultimately belongs to the India-based business units that can effectively serve the global market. PricewaterhouseCoopers has identified four possible scenarios for the creation of KPO service providers:

• The well-established IT and BPO companies will move up the value chain and diversify into KPO;
• Companies currently serving specific vertical markets in India could choose to begin offering their services globally;
• Multinational companies may form captive units in India whose staff belong to global teams within various functional units; and
• New companies may be formed by Indians with very specialized skills and international work experience to provide services exclusively to the global market.

Irrespective of how they are formed, these business units should aspire to go all the way to create India-based expertise that produce tangible business benefits for the organizations they support within a short time frame.

They need to able to recruit, train and retain highly talented team members and be effective in moving them up the value chain.

Sources and References:

1. Why India can be global knowledge economy leader – Kandathil K Jacob
2. Wikipedia
3. KPO Experts India
4. Outsource2india

We like to invite you rate the post . You may also share it with your friends by clicking on the button ShareThis at the end of this post.

If you are working with a KPO, please let us know more about KPO by posting a comment on the blog.

Regards,

Santosh Puthran

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1. Cultural Web – A big challenge 22-June-08
2. Activity Based Management – Dispelling the myths Part I – 13-June-08
3. Activity Based Management – How to collect info 10-June-08
4. 10 myths about ABC by SSRK 26-Nov-06
5. Transfer Pricing 29-Dec-06
6. Throughput Accounting 17-Dec-06
7. SSRK’s Knowledge Repository 03-Dec-06
8. Stakeholder Analysis 19-May-08
9. Resistance to Change 26-Apr-08
10. Strategy Development 05-Apr-08
11. Strategic Drift 12-Apr-08
12. How to Share Blog posts with friends 25-May-08
13. Management Accountant Blog Home

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Knowledge Process Outsourcing KPO

Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost. Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.

It is being claimed that KPO is one step extension of Business Processing Outsourcing (BPO) because BPO Industry is shaping into Knowledge Process Outsourcing because of its favorable advantageous and future scope. But, let us not treat it only a ‘B’ replaced by a ‘K’. In fact, Knowledge process can be defined as high added value processes chain where the achievement of objectives is highly dependent on the skills, domain knowledge and experience of the people carrying out the activity. And when this activity gets outsourced a new business activity emerges, which is generally known as Knowledge Process Outsourcing.

Source: NYCLONDON

What high-end services can be outsourced to the Indian KPO sector?

Here are some KPO services that can be outsourced to India :

• Research & Development
• Business and Technical Analysis
• Learning Solutions
• Animation & Design
• Business & Market Research
• Pharmaceuticals and Biotechnology
• Medical Services
• Writing & Content Development
• Legal Services
• Intellectual Property (IP) Research
• Data Analytics
• Network Management
• Training & Consultancy

According to a report of National Association of Software and Services Companies (NASSCOM), the Indian chamber of commerce that serves as an interface to the Indian Software industry, Knowledge Process Outsourcing industry (KPO) is expected to reach USD 17 billion by 2010, of which USD 12 billion would be outsourced to India. Another report predicts that India will capture more than 70 percent of the KPO sector by 2010. Apart from India, countries such as Russia, China, the Czech Republic, Ireland, and Israel are also expected to join the KPO industry.

Challenges to providers

In addition to the challenges faced by clients, KPO companies themselves have challenges:

• High staff turnover, especially where work is not challenging to the employee’s skills
• High cost of training and tendency to lose the most experienced employees to the clients
• Ensuring the security and confidentiality of information, especially when privacy laws vary from country to country

Source: NYCLONDON

Creating the climate for success in India

The responsibility of setting up successful KPOs in India ultimately belongs to the India-based business units that can effectively serve the global market. PricewaterhouseCoopers has identified four possible scenarios for the creation of KPO service providers:

• The well-established IT and BPO companies will move up the value chain and diversify into KPO;
• Companies currently serving specific vertical markets in India could choose to begin offering their services globally;
• Multinational companies may form captive units in India whose staff belong to global teams within various functional units; and
• New companies may be formed by Indians with very specialized skills and international work experience to provide services exclusively to the global market.

Irrespective of how they are formed, these business units should aspire to go all the way to create India-based expertise that produce tangible business benefits for the organizations they support within a short time frame.

They need to able to recruit, train and retain highly talented team members and be effective in moving them up the value chain.

Sources and References:

1. Why India can be global knowledge economy leader – Kandathil K Jacob
2. Wikipedia
3. KPO Experts India
4. Outsource2india

We like to invite you rate the post . You may also share it with your friends by clicking on the button ShareThis at the end of this post.

If you are working with a KPO, please let us know more about KPO by posting a comment on the blog.

Regards,

Santosh Puthran

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Knowledge Process Outsourcing (KPO)

Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost. Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.

It is being claimed that KPO is one step extension of Business Processing Outsourcing (BPO) because BPO Industry is shaping into Knowledge Process Outsourcing because of its favorable advantageous and future scope. But, let us not treat it only a ‘B’ replaced by a ‘K’. In fact, Knowledge process can be defined as high added value processes chain where the achievement of objectives is highly dependent on the skills, domain knowledge and experience of the people carrying out the activity. And when this activity gets outsourced a new business activity emerges, which is generally known as Knowledge Process Outsourcing.

Source: NYCLONDON

What high-end services can be outsourced to the Indian KPO sector?

Here are some KPO services that can be outsourced to India :

• Research & Development
• Business and Technical Analysis
• Learning Solutions
• Animation & Design
• Business & Market Research
• Pharmaceuticals and Biotechnology
• Medical Services
• Writing & Content Development
• Legal Services
• Intellectual Property (IP) Research
• Data Analytics
• Network Management
• Training & Consultancy

According to a report of National Association of Software and Services Companies (NASSCOM), the Indian chamber of commerce that serves as an interface to the Indian Software industry, Knowledge Process Outsourcing industry (KPO) is expected to reach USD 17 billion by 2010, of which USD 12 billion would be outsourced to India. Another report predicts that India will capture more than 70 percent of the KPO sector by 2010. Apart from India, countries such as Russia, China, the Czech Republic, Ireland, and Israel are also expected to join the KPO industry.

Challenges to providers

In addition to the challenges faced by clients, KPO companies themselves have challenges:

• High staff turnover, especially where work is not challenging to the employee’s skills
• High cost of training and tendency to lose the most experienced employees to the clients
• Ensuring the security and confidentiality of information, especially when privacy laws vary from country to country

Source: NYCLONDON

Creating the climate for success in India

The responsibility of setting up successful KPOs in India ultimately belongs to the India-based business units that can effectively serve the global market. PricewaterhouseCoopers has identified four possible scenarios for the creation of KPO service providers:

• The well-established IT and BPO companies will move up the value chain and diversify into KPO;
• Companies currently serving specific vertical markets in India could choose to begin offering their services globally;
• Multinational companies may form captive units in India whose staff belong to global teams within various functional units; and
• New companies may be formed by Indians with very specialized skills and international work experience to provide services exclusively to the global market.

Irrespective of how they are formed, these business units should aspire to go all the way to create India-based expertise that produce tangible business benefits for the organizations they support within a short time frame.

They need to able to recruit, train and retain highly talented team members and be effective in moving them up the value chain.

Sources and References:

1. Why India can be global knowledge economy leader – Kandathil K Jacob
2. Wikipedia
3. KPO Experts India
4. Outsource2india

We like to invite you rate the post . You may also share it with your friends by clicking on the button ShareThis at the end of this post.

If you are working with a KPO, please let us know more about KPO by posting a comment on the blog.

Regards,

Santosh Puthran

Join us

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1. Cultural Web – A big challenge 22-June-08
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4. 10 myths about ABC by SSRK 26-Nov-06
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6. Throughput Accounting 17-Dec-06
7. SSRK’s Knowledge Repository 03-Dec-06
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9. Resistance to Change 26-Apr-08
10. Strategy Development 05-Apr-08
11. Strategic Drift 12-Apr-08
12. How to Share Blog posts with friends 25-May-08
13. Management Accountant Blog Home

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Cultural Web – A big challenge

A big challenge in most organizations is whether they know what their culture is – and whether it is the right culture to support their strategy!! Organizational analysis aims to generate an understanding of the organizational structure and culture of the system the project is looking at. This can help in understanding the ease or difficulty with which new strategies can be adopted.

Check these for your own organisation:

• How would you describe your organisational culture?
• How would the workforce describe it?
• Would this be the same as the directors and top management think?
• How would your clients, customers, users and suppliers describe it?
• What is the does this mean about the way the organisation operates?
• Does this culture support or sabotage your strategy?
• What are the clues which tell people about your strategy?

Source: Flickr

The Cultural Web, developed by Gerry Johnson and Kevan Scholes in 1992, provides one such approach for looking at and changing your organization’s culture. Using it, you can expose cultural assumptions and practices, and set to work aligning organizational elements with one another, and with your strategy.

Elements of the Cultural Web

The Cultural Web identifies six interrelated elements that help to make up what Johnson and Scholes call the “paradigm” – the pattern or model – of the work environment. By analyzing the factors in each, you can begin to see the bigger picture of your culture: what is working, what isn’t working, and what needs to be changed. The six elements are:

1. Stories – The past events and people talked about inside and outside the company. Who and what the company chooses to immortalize says a great deal about what it values, and perceives as great behavior.
2. Rituals and Routines – The daily behavior and actions of people that signal acceptable behavior. This determines what is expected to happen in given situations, and what is valued by management.
3. Symbols – The visual representations of the company including logos, how plush the offices are, and the formal or informal dress codes.
4. Organizational Structure – This includes both the structure defined by the organization chart, and the unwritten lines of power and influence that indicate whose contributions are most valued.
5. Control Systems – The ways that the organization is controlled. These include financial systems, quality systems, and rewards (including the way they are measured and distributed within the organization.)
6. Power Structures – The pockets of real power in the company. This may involve one or two key senior executives, a whole group of executives, or even a department. The key is that these people have the greatest amount of influence on decisions, operations, and strategic direction.

Source: Little Boy with a Bat

These elements are represented graphically as six semi-overlapping circles (see Figure 1 below), which together influence the cultural paradigm.

Source: Mind Tools. Click here to read more

If you like the article, please rate, comment and share.

Regards,

Santosh Puthran

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9. Resistance to Change 26-Apr-08
10. Strategy Development 05-Apr-08
11. Strategic Drift 12-Apr-08
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