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Available Computer
at Science 00 (2018) 000–000
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Procedia Computer Science 00 (2018) 000–000 www.elsevier.com/locate/procedia
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ScienceDirect
Procedia Computer Science 126 (2018) 1145–1153

22nd International Conference on Knowledge-Based and Intelligent Information &

22nd International ConferenceEngineering
on Knowledge-Based
Systems and Intelligent Information &
Engineering Systems
Knowledge Resources Development Process In Business Process
Knowledge Resources Development Process In Business Process
Outsourcing (BPO) Organizations
Outsourcing (BPO) Organizations
Justyna Krysińska, Piotr Janaszkiewicz, Marcin Prys, Przemysław Różewski*
Justyna Krysińska, Piotr Janaszkiewicz, Marcin Prys, Przemysław Różewski*
Faculty of Computer Science and Information Technology, West Pomeranian University of Technology in Szczecin, Żołnierska 49, 71-210
Szczecin,
Faculty of Computer Science and Information Technology, West Poland University of Technology in Szczecin, Żołnierska 49, 71-210
Pomeranian
Szczecin, Poland

Abstract
Abstract
The current situation on the market shows, that if companies want to stay competitive, they need to focus on their core activities
The
and current
reduce situation
non-valueonadded
the market shows,tothat
operations if companies
a minimum or want
even to stay competitive,
delegate them outside theythe
need to focus on
company. Thistheir core activities
approach, called
and reduce non-value
“Outsourcing” started inadded operations
1979 and to a minimum
is expanding the marketorrapidly.
even Nowadays,
delegate them thereoutside the company.
are enormous BusinessThis approach,
Process called
Outsourcing
“Outsourcing”
(BPO) companiesstarted
thatinspecialize
1979 andin is providing
expandingall thekinds
market of rapidly. Nowadays,
back-office there
services. Firmsare contract
enormousBPOs
Business Process
for some Outsourcing
strictly defined
(BPO) companies
operations that the
and control specialize
results in
byproviding all kinds
agreed metrics of back-office
called services.
Key Performance Firms contract
Indicators (KPIs). BPOs for some
The biggest strictlyfor
challenge defined
BPO
is to properly
operations andmanage
control available Knowledge
the results by agreed Resources
metrics called(KR).KeyWhole knowledge
Performance management
Indicators needs
(KPIs). Thetobiggest
be precisely planned
challenge and
for BPO
is to properly
controlled manage
to ensure available
that Knowledge
proper people Resources
are trained (KR).
in right Wholeonknowledge
domain, time, with management
highest possibleneeds to beand
quality precisely
withoutplanned and
losing any
controlled to ensure In
resource capability. that proper
this people
article, arediscuss
authors trainedissues
in right domain,
related on development
to the time, with highest possible quality
of Knowledge andinwithout
Resources losing
Business any
Process
resource
Outsourcingcapability. In this article,
Organizations authors
and propose discuss
some issues related
agent-based to themodel
simulation development of Knowledge
to describe developmentResources
process.in Business Process
Outsourcing Organizations and propose some agent-based simulation model to describe development process.
© 2018 The Authors. Published by Elsevier Ltd.
© 2018
This The
is an Authors.
open Published
accessPublished by Elsevier
article under Ltd.
the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
© 2018 The Authors. by Elsevier Ltd.
This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
This is an and
Selection openpeer-review
access article under
under the CC BY-NC-ND
responsibility of KES license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
International.
Selection and peer-review under responsibility of KES International.
Selection and peer-review under responsibility of KES International.
Keywords: Knowledge Resources; Business Process Outsourcing; agent-based simulation
Keywords: Knowledge Resources; Business Process Outsourcing; agent-based simulation

1. Introduction
1. Introduction
In 1923 Henry Ford said: „if there is a thing that we cannot do more efficiently, cheaper or better than
In 1923 Henry
a competition, thereFord
is nosaid:
point„if there is
in doing a thing– that
it further we cannot
we should do one
hire the morewhoefficiently, cheaper
does it better thanorwebetter
do”2. than
His
aapproach
competition, thereand
evaluated is no
waspoint in for
a base doing it further
a new – we
business should
trend hire the one
– Outsourcing who does
– started it better than we do”2. His
in 1979.
approach evaluated and was a base for a new business trend – Outsourcing – started in 1979.
* Corresponding author. E-mail address: prozewski@wi.zut.edu.pl
* Corresponding author. E-mail address: prozewski@wi.zut.edu.pl

1877-0509 © 2018 The Authors. Published by Elsevier Ltd.

This is an open
1877-0509 access
© 2018 Thearticle under
Authors. the CC BY-NC-ND
Published license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
by Elsevier Ltd.
Selection
This is an and
openpeer-review under
access article responsibility
under of KES International.
the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
Selection and peer-review under responsibility of KES International.

1877-0509 © 2018 The Authors. Published by Elsevier Ltd.

This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
Selection and peer-review under responsibility of KES International.
10.1016/j.procs.2018.08.052
1146 Justyna Krysińska et al. / Procedia Computer Science 126 (2018) 1145–1153
Author name / Procedia Computer Science 00 (2018) 000–000

The term “outsourcing” is a compilation of words outside-resource-using and means contracting a third-party to
do a particular, strictly defined part of company’s operations. Nowadays, there are more and more Business Process
Outsourcing (BPO) companies that provide multiple services related to back-office operations12.
At the moment there is a big pressure on the companies, to be as flexible and multinational as possible. Cost
of operating on global market is very high due to language and legal regulation differences. To increase the cost
efficiency and to enable organizations to focus primarily on their core competencies, some companies take
the decision to offshore part of their business operations to a third-party11. It is extremely important to decide
smartly, which part of the business to outsource14.
There are multiple reasons, why companies outsource their operations. Most of them (44%) decide to contract
with BPO, to reduce and better control the cost. BPO offer more competitive prices. New reports show that for
example in marketing domain, outsourcing companies can save for their clients half of the cost3. 34% of firms that
decide to outsource their operations, make the decision due to lack of skilled employees. BPO corporations have
skilled and experienced human resources and knowledge resources to train new employees if it is needed. Out of
cost reduction, outsourcing is also giving a staffing flexibility3. Companies can reduce employment and maintain
only the specialists and experts of the core activities. This approach allows them to focus on their core competencies,
improve them and strengthen their position in the market.
Thanks to technological advancement and ease of remote communication, there is a trend in the business to
outsource processes to the countries, where cost per employee to quality ratio is at the lowest possible price8. This
approach is called offshore outsourcing. Cooperation between BPO and its client bases on a formal contract15.
Corporations sign contracts with BPO partners and transfer their non-value added activities and responsibilities
to other locations. Contracted operations are usually located in the neighboring country and it is called nearshore
outsourcing. American organizations nearshore usually to Canada and Mexico and offshore to India, Argentina, and
Eastern Europe. European companies transfer their activities usually to smaller European countries that are attractive
due to low-cost, skilled labor forces and less stringent legal regulations. Major outsourcing centers are: Bulgaria,
Poland, Lithuania, Germany, and Romania1.
Nowadays, the number of information generated by companies is growing rapidly. To be competitive on the
market, corporations need to collect and manage huge data sets and knowledge resources (KR). It is extremely
important to identify knowledge resources, collect information, store procedures and share them with stakeholders.
Weak knowledge management may lead not only to reduced competitive advantage, but also to operational issues
and financial loses.
In the article, authors analyze issue related to KR management in BPO organizations. The authors proposed the
simulation model ready to analyzed KR flows in BPO organizations. We assumes that the employees can be
represented by simple agents and the knowledge process in not very intensive but more routine. There was also an
agent-based simulation model prepared in NetLogo environment to visualize dependencies on knowledge and
productivity of employees. The discussion about such models can be found in 17 but our approach is focused on
optimization issue.

2. Knowledge Resources

The most popular classification of knowledge resources is tripartite ordination known as intellectual capital1.
There are three main types of non-tangible organizational resources: human resources, structural resources,
and relational resources. The first type refers to people connected with the organization and to their attributes, which
are: knowledge, abilities, skills, experience, and innovativeness. The second type consists of intellectual property
and infrastructural resources, the third type includes internal and external relations of the company - brand,
and image of the company in the market, as well as connection with the external stakeholders.
The terms “Knowledge Assets” and “knowledge resources” in companies refer to project/organizational
knowledge that is stored for reuse and shared5. I. Nonaka and H. Takeuchi categorized Knowledge Resources into
four groups, of which two are tacit and two are explicit (formal and available)9. The first group presents tacit
knowledge built through common experiments. The second group refers to tacit, routine knowledge reutilized
and embedded by actions and practices. The third group presents explicit, conceptual knowledge assets that are
articulated through language, images, and symbols. The fourth group is the systemic knowledge – explicit
 Justyna Krysińska et al. / Procedia Computer Science 126 (2018) 1145–1153 1147
Author name / Procedia Computer Science 00 (2018) 000–000

knowledge, packaged and systemized. Tacit knowledge is hidden and hard to determine. It is growing with
experience and is not easy to collect and formalize. People sometimes are not aware of having it and that makes
it even harder to share13. Explicit knowledge is clearly defined, saved in databases, documents, instructions, maps,
and sets of procedures. This kind of knowledge is easy to identify and formalize. Nonaka and Takeuchi’s approach
assumes that human knowledge is generated and shared by social interactions and conversion from tacit knowledge
to explicit.
Management of Knowledge Resources (MKR) refers to the ability to administrate and control KR in the dynamic
and variable environment and drive the organization to achieve sustainability. MKR refers basically to four focus
areas6:

• considering knowledge resources in creation and implementation of the organizational strategy,

• KR identification and mapping,
• KR measurement for better performance control,
• Reporting to stakeholders (internal and external)

3. BPO Knowledge Issue

With the continuous improvement approach and the increasing importance of customer experience, companies
opt for outsourcing not only due to the cost reduction, but also to outsource the value-added operations7. According
to the survey done by Deloitte4 , the key challenge for companies is to hire and keep most valuable employees and
reduce the cost at the same time. 26% of respondents, mostly HR Managers from corporations located all over the
world, assumed that lack of highly qualified employees and motivation are the biggest issues.
Outsourcing firms are very often providing services for international companies and have contracts for more than
one market. The biggest challenge for them is to recruit proper profiles in the already existing sites. In this case,
there may be big differences in law, accounting or other core aspects of the process compared to the country, where
the contractor is located. Due to that, hiring people only because of their domain knowledge and experience, may not
result in finding the best candidates.
The main requirement for recruitment in BPOs is flexibility and language skills. Rest of needed knowledge is
usually transferred during internal training provided by process trainers (PT). Contracts between BPO Companies
and their clients strictly define not only part of the transferred operations, but also a number of employees that the
client will pay for, known as Full-time equivalent (FTE). For the outsourcing company, it refers to the fact that
whenever it needs to hire additional resources, it also needs to pay for them from its own budget.
Due to this fact, BPO needs to keep the resources balanced between processes. It is unacceptable to have an idle
resource in one of the teams and a backlog of unprocessed documents in another one. It is extremely important to
ensure that employees are cross-trained, flexible and ready to switch between processes when it is needed.

Fig. 1 of Knowledge Resource layer

1148 Justyna Krysińska et al. / Procedia Computer Science 126 (2018) 1145–1153
Author name / Procedia Computer Science 00 (2018) 000–000

A typical structure of Knowledge Resources in BPO is presented on Fig. 1. Projects carried out for the clients are
usually split into smaller processes. For the purposes of the article, processes are marked as circles and named
by capital letters.
Every process always has a group of people assigned to it, who are trained and responsible for keeping key
performance indicators (KPIs) on a proper level. Processes may be similar, but they can also differ in scope,
difficulty, time consumption, and required experience. There may be also multiple functions and responsibilities
inside one process, that are assigned to team members according to their experience (junior/senior associate).
Processes in projects have a strictly defined workflow. Some documents may come from outside the company,
some are created internally. Workflow in BPO is usually mapped. Every action has a description and instruction
what should happen with the document at every stage of the process. Some documents are issued only by one team,
other ones shift between teams before they are sent outside the company.
Workflow path may be similar to knowledge map, but it is not a rule. In some projects, team members are cross-
trained with people that work with the same documents on different processes or phases of work. It is a comfortable
solution in case of absences and need of a backup. Unfortunately, this approach is not always possible. It is very
important to adjust the training to individual capabilities. Some people are detail oriented and others have a better
general view. Sometimes differences between processes are too big and cross-training may lead to multiple mistakes
and quality decrease. On the other hand, people who have extensive knowledge may improve the process based
on other experiences and broader perspective. Cross-training has two big advantages: for the employer – it is
ensuring work continuity in case of absences, for employees – it is a good variety in the daily routine and it makes
the employee more valuable for the project.
It is highly possible, that due to some unexpected reasons, two people from one team will be absent on the same
day. Based on Fig. 1 there are multiple scenarios possible. If both absent people are part of team D, the team leader
can shift their work to the back-ups from team C and/or B (scenario 1: 1 person from C and 1 from B, scenario 2:
2 people from C). The backup structure ensures the business continuity in such situations. It is not the case if the
absent people are part of team I. In this case, there is no backup trained and no one can secure the process.
Moreover, in case of lower inflow of documents in one of the teams, idle team members, that are cross-trained
in other processes, can support other teams by issuing their documents.
The role of a process trainer (PT) is usually an additional function of senior associate. It means that PT is not
only providing training for new joiners, but is also a regular employee, whose performance is calculated into team
productivity. PT is counted as FTE and every single training provided by the trainer is affecting the productivity. It is
very important to recognize the opportunities of the newly hired people and assign them to the proper team since the
very first day. Bad recognition at the beginning of the learning path may cost a lot of time and energy spent by both
– new joiner and the trainer. This will also result in not achieved indicators of the process, as both PT and newly
hired person are not effective and do not perform as it was planned.

4. Knowledge Resource development simulation

In many cases, the decisive factor for choosing outsourcing destination is the availability of employees with
knowledge of a target market language. For example, in Poland, there are multiple BPO companies focused on the
German market. BPO is a very dynamic environment. It works based on projects and a few years long contracts.
This way of operation causes a risk, that if the contract is not prolonged, the whole team of trained and experienced
people loses their job and the company may lose a lot of valuable employees. To avoid such situations, BPO
corporations are emphasizing flexibility as a key requirement. For instance, during recruiting phase, the main criteria
is the level of German language proficiency, and the domain knowledge is very often treated only as an additional
advantage. This approach gives the company more possibilities. The same employee may be assigned to various
projects and may be also trained and reassigned to other process or team.
Knowledge management in companies is a powerful skill nowadays. It is very important to recognize people’s
potential and to assign them to the most matching activities. It is also meaningful to ensure that they are able to keep
performing in changing environment conditions. Due to the workflow, teams in the project are cooperating with each
other. The better the cooperation is, the better is also the knowledge transfer. Knowledge sharing and team support
 Justyna Krysińska et al. / Procedia Computer Science 126 (2018) 1145–1153 1149
Author name / Procedia Computer Science 00 (2018) 000–000

help new joiners associate and significantly increase the level of the whole team’s performance. As presented
in Fig. 1, crucial employees are the ones located in multiple circles. They are flexible and ready to cover activities
of multiple processes. If the client pulls back some operations, only employees who are cross-trained are able
to switch to other activities fluently. Similarly, if the client extends the scope, only multifunctional team members
are ready to take over the open positions.
For the purposes of the article, there was a simulation prepared in NetLogo10 to present how the knowledge
of employees affect their productivity and the results of the whole team (see fig. 3). Every BPO company has its own
success factors. For the simulation, there were 3 key performance indicators chosen: knowledge, accuracy, and
productivity. Authors made the simulation for a team with some experience, where team members have already
some process knowledge and accuracy on an agreed level.
In the NetLogo simulation, the knowledge is defined for every agent as a random number lower than 70, which
means that every employee has some level of process knowledge (which may be also equal 0 for new joiners)
and there is still some area of improvement (maximum value equals 100). Every document in the company has some
task-complexity level, that defines how difficult and time consuming it is. With every processed document, the agent
gains knowledge, that equals to 10% of task-complexity of the document (1).

(1)

Moreover, there is a possibility to provide training for the agent. The NetLogo simulation enables the user
to define an agent to be trained (provide the who number of the employee) and knowledge-from-training level that
will be added to the agent’s knowledge as a result of the training (Fig. 2). As the level of knowledge of the agent
achieves 100, it means that the agent knows the process with all details and exceptions, and there is no more area
of improvement and no more need for training.
“Speed”, an additional variable, is calculated on the basis of the knowledge of the agent and the task-complexity
of the processed document (2).

(2)

Fig. 2 Simulation of Knowledge Resource development process (NetLogo)

 Author name / Procedia Computer Science 00 (2018) 000–000
1150 Justyna Krysińska et al. / Procedia Computer Science 126 (2018) 1145–1153

The speed of an agent depends on agent’s knowledge, the wider the knowledge is, the faster the document
is processed. It is also inversely proportional to the task-complexity. The more complex the document is, the more
time is needed for the process and the more knowledge the agent will gain (1). It is very important to ensure, that the
task-complexity, assigned randomly (random 10), does not equal 0 in any case, as it is impossible to divide by 0 (2).
The NetLogo simulation clearly shows, that at the beginning employees usually need more time to process single
case. They are unsure of their knowledge and need a lot of support. The average productivity of individual team
member depends on multiple aspects, like knowledge, experience, task complexity and quality of work. Depending
on their personal abilities, process complexity and available knowledge sources, they may be more or less
productive, but at the beginning of their career, their efficiency is always significantly below the average of more
experienced employees. In the simulation, productivity is calculated as speed multiplied by accuracy (3).

(3)

At the beginning, the plot of productivity is exactly parallel to the plot of speed (as the accuracy is constant).
When the knowledge improves and affects the level of accuracy, the plots are drawing near and when accuracy
reaches its maximum value, the plots impose itself (Fig. 3). That means, that the agent achieved maximum possible
speed and efficiency.
By gaining knowledge and experience and becoming more and more independent and self-confident, employees
usually improve their decision making process and performance. Experienced team members deal with more
complex and unobvious cases. Even though the knowledge seems to be sufficient for assigned tasks, employees
often lack knowledge of exceptions or the broad view on the project.

Fig. 3 NetLogo plots of Key Performance Indicators

Fig. 4 Knowledge and accuracy without and with process training

 Justyna Krysińska et al. / Procedia Computer Science 126 (2018) 1145–1153 1151

One of the important agent variables is accuracy. This metric defines how many documents out of 100 are
processed correctly. This variable has a value assigned randomly at the beginning of the simulation. The starting
level ranges between 0.75 and 1. To be licensed to operate, the employee needs to have a proper accuracy, no lower
than 75% of documents processed correctly. There is also an assumption, that if the employee gains new knowledge,
at some point the accuracy of the employee should also improve, so if the accuracy multiplied by 100 will be equal
to knowledge, it will start growing proportionally to knowledge.
There was a simulation done in NetLogo, to verify the influence of process training to the level of knowledge
and accuracy. The first plot in Fig. 4 shows a normal increase in values due to gaining knowledge by experience.
The second plot presents the situation when half of the team was trained in tick 50 of the simulation and the second
half in tick 100. There are clearly visible transitions in the knowledge and accuracy levels.
Proper process knowledge management is a crucial advantage of the BPO company. The knowledge that was
once transferred from the client is now saved only in the outsourcer's databases. On the other hand, adequate
knowledge management results in expected quality levels and is mostly a major condition for the contract extension.
Knowledge possession is not sufficient. The key dominance is the skill, how to transform knowledge into highest
possible team productivity correlated with the quality. The wider knowledge employee has, the easier and faster he
can solve the cases. On the other hand, the faster the employee works, the bigger is the risk of inattention mistake.
Furthermore, the more experienced employee is, the fewer mistakes is expected to make. But at the same time, the
experienced employees have usually a bigger scope of responsibility and the severity of a single mistake is
significant in that case. This reasoning shows, how critical is the role of knowledge management in the BPO
companies.

Fig. 5 Performance Improvement Cycle

1152 Justyna Krysińska et al. / Procedia Computer Science 126 (2018) 1145–1153
Author name / Procedia Computer Science 00 (2018) 000–000

Performance Indicators are frequently measured and calculated (usually on a monthly basis). This approach
enables a Team Leader (TL) to control employees development and support them to achieve better results. Based
on Fig. 5 the TL can lead the team by providing additional or exceptions training in a proper time to reduce the
number of errors and to increase the quality level of particular team members.
It is crucial for the Team Leader to recognize if an employee needs any kind of training or should have a mentor
assigned to help this employee analyze areas of development and weaknesses in productivity. In the extreme cases,
low performers (low productivity and low quality) should not only be additionally trained by a process trainer, but
also take part in Performance Improvement Plan (PIP) provided by the Team Leader.
When an employee is ready to cross-train someone or to be cross-trained, it is very important to plan the training
carefully. Exactly as with first process assignment, choosing time and domain of cross-training may generate profit
or loss. It is crucial to decide on the best time and domain for the training. Based on the example from Fig. 1 there
are 8 processes (out of the core one) in which the employee may be trained. It is always right to cross-train person
with the process that is similar or close to the core activity. The training is than short and efficient, but it is difficult
to decide which process would be the best one. Based on Fig. 1, a person from team E is close with processes D, F,
and H. They may work with the same documents. On the other hand, it is visible on Fig. 2, that team members from
team E are most likely cross-trained with D and F.

5. Conclusion

Simulation prepared for this article is original, prepared by authors in NetLogo environment. The most important
observations from the paper are:

• There is still a positive trend for Business Process Outsourcing companies on the market.
• The biggest challenge for BPO companies is to find and develop Knowledge Resources.
• It is very important to plan and organize training carefully by choosing the best possible time, domain and
process trainer16.
• Proper back-up and cross-training structure ensures business continuity in unexpected situations and helps
to avoid idle resources in case of low inflow.
• The speed of document processing and the productivity depend on the knowledge and the task-complexity of the
documents. Their values vary with every document, but they consistently increase and reach the maximum when
the knowledge and accuracy reach the level of 100% Fig. 4.
• Proper knowledge management is a crucial advantage in an outsourcing brand. Smart planning of training
ensures that the company achieves the best possible results in a relatively short time

Next step for authors is to improve the model for knowledge resources optimization by considering further
variables that affect the key performance indicators in BPO companies.

Acknowledgements

This work is supported by the Erasmus+ Programs of the European Union: DSA-Digital Skills Accelerator (No.
2017-1-PL01-KA203-038537) and ESCOLA-Engineering Student Centred Learning Approaches (No. 2017-1-
TR01-KA203-045955).

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