IT outsourcing, knowledge transfer and project transition phases

Date11 November 2019
Publication Date11 November 2019
AuthorCynthia Denise McGowan Poole
SubjectInformation & knowledge management
IT outsourcing, knowledge
transfer and project
transition phases
Cynthia Denise McGowan Poole
School of Advanced Studies, University of Phoenix, Pembroke Pines, Florida, USA
Purpose The purpose of this researchwas to uncover perceptions of information technology outsourcing
(ITO) project leaders and project teams regarding knowledge transfer between client and vendor partners
during openingand closing transition phases of ITOprojects.
Design/methodology/approach Qualitative methods and exploratory case study design were
used. Purposeful sampling was used to identify ITO knowledge assets including project team
members and organizational documents and artifacts that may provide information regarding the
knowledge transfer processes during the transition phases of the ITO project. Sample criteria were
ITO project team members from one US-based client organization and the companys international
vendor partners. The study population included project managers, analyst, developers, subject
matter experts (SMEs) and other ITO knowledge workers involved in the ITO project from one US-
based organization. Interview and document analysis were done using of NVivo Pro 11
Findings Four themes emerged from participantresponses relative to the opening and closing phasesof
ITO projects including KT approachesto plans and processes; KT dependencies relative to IT project team
members reliance on project tools, processesand artifacts; determinants of KT success or failure relative to
project team membersperceptions;and role of documentation relative to communicationand distribution of
KT outcomes.
Originality/value This research may provide insights into additional aspects of knowledge transfer
during ITO transition phases, which may be used by IT leaders and project teams to plan for successful
knowledgetransfer during the transition phases of ITO projects.
Keywords Knowledge transfer, Outsourcing, Project transition phases
Paper type Case study
Information technology outsourcing (ITO) is the term used when information technology
(IT) client organizations decideto contract out some or all of the organizations IT functions
to an external vendor who agrees to provide specic servicesfor a specic fee and duration
(Al-Salti and Hackney, 2011). Havinggained focus as both a cost-saving factor and a means
for gaining competitive advantage,one expected outcome of the ITO initiative is successful
knowledge transfer, because knowledge transfer between clients and vendor partners
expands intellectual capital for the clientorganization and enhances innovation (Chang and
Gurbaxani, 2012;De Carvalho et al.,2018). Successful knowledge transfer between client
and vendor partners was positively relatedto ITO project success from both the client and
vendor perspectives (Sudhakar, 2013). However, recent literature indicated conicting
ndings as to when knowledge transfertakes place in which phases of the ITO project and
what types of knowledge is transferred between client and vendorpartners during opening
and closing transition phases (Strasser et al.,2019;Battistella et al.,2016;Britto et al., 2018;
Received17 April 2019
Revised1 September 2019
Accepted18 September 2019
VINEJournal of Information and
KnowledgeManagement Systems
Vol.50 No. 2, 2020
pp. 219-246
© Emerald Publishing Limited
DOI 10.1108/VJIKMS-04-2019-0053
The current issue and full text archive of this journal is available on Emerald Insight at:
o Battistutti and Bork, 2017;Jain and Khurana, 2016;Luongand Stevens, 2015;Pantic-
Dragisic and Söderlund,2018).
Knowledge transfer during the beginning of the project is not a critical concern for in-
house project teams that usually have prior knowledge of the organizations practices and
processes, as well as sufcient domain knowledge to meet the project objectives
(Kristjánsson et al., 2014). Knowledge transfer during the end of the projects is not critical
because the in-house project team is able to provide operational support for the resulting
project or service afterproject completion (Kristjánsson et al., 2014). The knowledgetransfer
impact on an ITO project is twofold. First, during the opening transition phase of an ITO
project, after ITO vendor selection and contract negotiations are complete, the selected
vendor partner must learn about the client to successfully meet the clients needs (Beulen
et al.,2011). Second, at the closing transition phase of the ITO project, knowledge transfer
may extend into the operations phase because the client must learn about the product or
service that the vendor has created to be able to support the solutionfor ongoing operations
(Kristjánsson et al., 2014). Research suggests that over two-thirds of failed ITO initiatives
are caused by problems regarding knowledgetransfer during the critical transitions stages,
which occur at the beginning and end of the ITO project (Beulenet al.,2011;Ren et al., 2018;
Teo and Bhattacherjee,2014).
Research problem
The general problem addressed by this research was that while ITO partnerships are
increasing at a rate of 14 per cent per year, the satisfaction rating of clients regarding ITO
partnership outcomes is reported to be only 33 per cent compared with 7080 per cent for
non-IT outsource initiatives (Gorla and Somers, 2014).Although approximately 94 per cent
of IT organizations outsource IT functions, only one-third of the organizations surveyed
considered ITO initiatives as successful(KMPG, 2017). Both the client IT managers and the
outsourcing vendor partners tend to approach knowledge transfer during the transition
stages of ITO initiatives as an afterthought (Al-Salti and Hackney, 2011;Blumenberg et al.,
2009;Deng and Mao, 2012;Hodosi et al.,2017;Kristjánsson et al., 2014). Knowledge transfer
remains a challenge for most project teams during critical transition phases of the project
(Ren et al.,2018).
The negative consequences of failed knowledge transfer during the opening transition
phase of the ITO initiative become manifestthrough extended project timelines because the
vendor partner is not able to deliver contractobjectives as planned (Jain and Khurana, 2016).
The negative consequence of failed knowledge transfer at the end of the ITO initiative
becomes manifest throughfailed or crippled business processes when the clientis not able to
support the solution once the ITO partnership is severed (Kristjánsson et al.,2014;
Santhanam et al.,2007;Teoand Bhattacherjee, 2014).
The specic problem that thisresearch addressed is the lack of understanding regarding
how project teams perceive knowledge transfer and the approach to knowledge transfer
during ITO project planning. Although insufcient knowledge transfer has been linked to
failed ITO projects in prior research, the focus of the research has been on ITO success
factors and KT outcomes (Teo and Bhattacherjee, 2014). Little research has been done to
understand individualsperceptions of knowledge transfer, how key project team members
approach knowledge transfer during ITO projects or what processes support knowledge
transfer plans and activities.
Recent research focused on ITO success factors include insights into best practices for
ITO contract models (De Carvalho et al.,2018;Luong and Stevens, 2015), mitigating ITO
risks and barriers (González et al.,2016), factors of ITO knowledge transactions

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