BPO is distinct from information technology (IT) outsourcing, which focuses on hiring a third-party company or service provider to do IT-related activities, such as application management and application development, data centre operations, or testing and quality assurance. In the early days, BPO usually consisted of outsourcing processes such as payroll. Then it grew to include employee benefits management. Now it encompasses a number of functions that are considered "non-core" to the primary business strategy.

KPO is one step extension of Business Processing Outsourcing (BPO) because BPO Industry is shaping into Knowledge Process Outsourcing because of its favourable 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.

LPO is Legal outsourcing, also known as legal process outsourcing refers to the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company.

Current Scenario

There are 333 BPO registered companies all over India. Total revenue of BPO industry is 2.5% of Indian annual GDP. The growth rate of BPOs sector to Gross Domestic Product has risen from 1.2% to 5.4%. This industry employees 2.8 million people directly and 0.7 million indirectly till now. As of 2013, the total market size of the KPO industry in India has reached over $20 billion. India currently covers 70% of the world’s KPO industry.

Future Scenario

The expected growth in BPO industry in 2015 may be 12-15%. ITeS industry is expected to triple from US $ 500 billion today to US $ 1.5 to 1.7 trillion till 2022. BPO is 2nd largest industry & it will provide 61000 new jobs by end of 2014. India’s KPO market will cross $30 billion in next two years. Whereas the Projected employment in KPO sector is about 6-8 lakh.