Question

Statement I: Outsourcing helps in reducing costs and increasing efficiency.
Statement II: KPO (Knowledge Process Outsourcing) involves more high-end tasks than BPO.

• A. Both are correct.
• B. Both are incorrect.
• C. Only I is correct.
• D. Only II is correct.

Hint:

\[ \mathrm{BPO} \rightarrow \mathrm{Routine\ Services} \] \[ \mathrm{KPO} \rightarrow \mathrm{Knowledge\ Based\ High\ End\ Services} \]

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
Outsourcing is the transfer of a business process to an external service provider, often to leverage lower costs in different geographical locations.
Step 2: Detailed Explanation:
1. Statement I: Outsourcing allows companies to benefit from lower labor costs in developing countries (like India) and focus their internal resources on core activities, which naturally reduces overall costs and boosts efficiency. This statement is true.
2. Statement II: BPO (Business Process Outsourcing) typically handles routine tasks like customer care. KPO (Knowledge Process Outsourcing) involves specialized, high-skill tasks like financial research, legal services, and pharmaceutical R and D. This statement is also true.
Step 3: Final Answer:
As both statements accurately describe the current trends in the global service sector, Option (A) is correct.