Outsourcing and Captive Insourcing- Challenges in Knowledge Retention

Abstract

In the outsourcing of information technology (IT) projects, the proper selection and management of offshore service providers as well as the retention of business and technical knowledge intrinsic to the projects are critically important factors to determine the ultimate effectiveness of business process/information technology outsourcing (BPO/ITO). Based on some of the findings available in the existing research literature as well as on our own experiences in the management of outsourced projects, we examine in this paper the challenges to retain business and technical knowledge in the projects, so as to mitigate the risks of indiscriminate technology and knowledge transfer. Additionally, our research indicates that these issues take a different dimension in the case of a captive IT centre (wholly owned in-sourced centre). In this connection we also address the important scenario concerning the complexity of a mixed mode captive centre where there exists an ecosystem of outsourced partners and the captive centre.