Knowledge process outsourcing (KPO) is the general practice of outsourcing valuable knowledge through the use of external providers often located in a different country to help identify issues with cost reduction, and to build a company's core business by employing a value chain. This differs from the use of Business Process Outsourcing (BPO) as the focus is to create a process driven environment that focuses on analytical, decision, and research-oriented findings to further promote the realm of technical skills and the advancement of knowledge.

Reasons behind KPO include an increase in specialized knowledge and expertise, additional value creation, the potential for cost reductions, and a shortage of skilled labor. KPO is a continuation of business process outsourcing, yet with rather more of business complexity. To be successful in knowledge process outsourcing, a lot of guide is required from interorganizational system.

The meaning of KPO came into existence due to the constant evolution of companies looking into improving cost driven outsourcing models to better strategies that relied on knowledge based outsourcing models. It was highlighted that early studies mainly focused on the transition between BPO to KOP by increasingly adopting the expertise of a different entity and acknowledging the positive results of relying on intellectual capital. This would become particularly noticeable in certain industry areas such as legal services, business finance, and big pharma, where this evolution relied in the finding of complex analytics combined with skills and tasks from a research and professional perspective.

KPO services include all kinds of research and information gathering, e.g., intellectual property research for patent applications; equity research, business and market research, legal and medical services; training, consultancy, and research and development in fields such as pharmaceuticals and biotechnology; and animation and design, etc.

There is a vast utility for the use of knowledge process outsourcing (KPO) this can range from intellectual property research, financial analysis, market research, legal research, and data analytics. It is imminent that these types of services are highly reliant on the use of decision-based capacities and proficient knowledge rather than processes that are exchange based.

However, the use of KPO has been greatly identified in the financial area to not only help with the ever growing need to handle complex analytic tasks but to also help with the discovery of new risk assessments including the use of financial modeling that is often outsourced to outside vendors that have a specific unit of experts that only work on this type of sector. Correspondingly, this method can be applied in the legal research of organizations that employ the use of KPO to enhance the efficiency, performance, and documentation of using external services such as Evalueserve to operate different types of workloads by applying the Integreon Model.

The use of knowledge process outsourcing can provide a competitive advantage within the market because it allows organizations to tap into outside resources that have the necessary skills and knowledge without having to internally invest into their own employees. This investment can present many opportunities since it can enable firms to focus on developing new initiatives that can be strategically manipulated to help achieve goals or change by leveraging the new gain knowledge from outside vendors on intellectual property, analytics, and research.

New findings have shown that it is critical to use KPO for new and knowledge-demanding firms, whose main concentration rely on essential skills and external networks to produce new innovations and promote new opportunities for growth. However, this can be quite challenging in the pharmaceutical sector because the KOP that are used to support the theory of expansion can become a bottleneck for core competencies across network if firms do not enable the use of effectively implementing new innovation strategies.