CHANGING PROVIDER IN AN OUTSOURCED INFORMATION
SYSTEM PROJECT
Good Practices for Knowledge Transfer
Malika Grim-Yefsah
1,3
, Camille Rosenthal-Sabroux
1
and Virginie Thion-Goasdoué
2
1
LAMSADE, Paris Dauphine University, Paris, France
2
CEDRIC, CNAM, Paris, France
3
INSERM, Paris, France
Keywords: Outsourced project, Information System Development, Transition phase, Knowledge transfer.
Abstract: Outsourcing information system development has become a common practice in companies. Many
contributions were proposed for dealing with the management of such projects, and relationship between
client and vendor. But little is known concerning the way to manage the change of service provider in an
on-going project. Our study concerns the transition from an outgoing service provider to an incoming one
during an outsourcing development project in a public institution. This transition mainly consists in
transferring the project. The transfer involves not only materials (documents and code) but also knowledge.
Based on literature on knowledge transfer, we exhibit good practices for the transition phase of an on-going
outsourced project. We show how we applied these good practices on a –real- application case.
1 INTRODUCTION
Outsourcing Information System Development
(ISD) has become a common practice in companies.
An outsourced ISD project implicates three
participants: two internal participants which are the
IS Department and the business direction concerned
by the project, and an external participant which is a
software and computing services company also
called service provider. The service provider is
chosen at the end of an invitation to tender. In a
French public organization like a Public Scientific
and Technological Institution (PSTI), government
contract rules concerning outsourcing impose a (re-)
call for tenders on a contract at least each three
years, leading to change the service provider during
the project. This change necessitates performing a
transition phase in the project, during which the
outgoing provider transfers documentations,
applications, codes and knowledge necessary to the
project performance to the incoming service
provider. Knowledge transfer in this transition phase
is a key source of success of the outsourced project.
We studied this process and, based on literature
concerning knowledge transfer, we exhibited a
crucial activity for knowledge transfer. Again based
on literature review, we propose some good
practices for improving knowledge transfer in the
transition process and satisfying timing constraints.
Key questions guiding this study are: “How to create
favourable environment to knowledge transfer in a
transition phase?”, and “To what extent does the
face-to-face communication remain indispensable in
a transition phase?”
The paper is structured as follows. The next
section presents the transition phase of an IS
development outsourced project. In Section 3, we
discuss knowledge transfer according to the
literature and exhibit some postulates of interest for
our problem. In Section 4, we infer good practices
for knowledge transfer in the transition phase of an
outsourced ISD project. Last section is devoted to
discussion of good practices implementation and
limits. We also conclude and give perspectives.
2 PROBLEM AND RELATED
WORK
French Public Scientific and Technological
Institutions focus on their core competencies
(research) and outsource their support services like
318
Grim-Yefsah M., Rosenthal-Sabroux C. and Thion-Goasdoué V..
CHANGING PROVIDER IN AN OUTSOURCED INFORMATION SYSTEM PROJECT - Good Practices for Knowledge Transfer.
DOI: 10.5220/0003638603180321
In Proceedings of the International Conference on Knowledge Management and Information Sharing (KMIS-2011), pages 318-321
ISBN: 978-989-8425-81-2
Copyright
c
2011 SCITEPRESS (Science and Technology Publications, Lda.)
Information System (IS). The IS outsourcing is
dened by Willcocks and Kern (1998). Different
categorizations of outsourcing were proposed in
literature (see (Dibbern, Goles, Hirschheim and
Jayatilaka, 2004) for a comprehensive survey). In
our particular –real– case study, the IS department
outsources the development of a new software
necessary to a business direction (project
management outsourcing (Lacity and Hirschheim,
1993)), to one service provider (simple outgoing
arrangement (Gallivan and Oh, 1999)). The IS
department still manages the project and keeps being
the selected interlocutor of the business direction, it
is an interface between the business direction and
the service provider. From the IS department point
of view, the outsourcing cycle involves five stages:
Decision of outsourcing, Invitation to tender,
Selection, Implementation, managing relationships
and termination. This last stage corresponds to the
end of the contract. We distinguish several classical
main cases: reversibility process, transition process
or real termination. In particular, it is now well
known that knowledge sharing between the client
(the IS department here) and the service provider
plays an important role in outsourcing performance
(Dibbern et al., 2004) (Lee, 2001). Several studies
showed that knowledge sharing and transfer are
major predictors for outsourcing success and that not
only explicit but also tacit knowledge sharing plays
an important role in outsourcing success (Lee,
2001). The dealing with a change of service provider
brings further problems (Whitten and Leidner,
2006). If a part of the outgoing provider knowledge
is not transferred during the transition process then it
is lost for the project. Few proposals focused on the
specific case of changing provider from a knowledge
management point of view. To the best of our
knowledge, Alaranta and Jarvenpaa (2010) are the
only one to explicitly address this question. Their
interesting work exhibits key facilitators (which can
be seen as good practices) for improving knowledge
transfer in the transition phase. Theses key
facilitators impact the whole outsourcing cycle. For
our part, we focus on (complementary) good
practices for knowledge transfer that can be applied
-“locally”- during the termination stage,
independently of the project history. Pragmatically,
we define “really concrete” operational actions for
improving knowledge transfer during a transition
phase, these actions being performed under timing
constraints (as it has to be done in practice). Based
on literature, we emphasize some effects of transfer
knowledge process and several postulates of
interests.
3 THEORETICAL
BACKGROUND ON
KNOWLEDGE TRANSFER
Knowledge is defined as being justied true belief
(Nonaka and Takeuchi, 1995). Knowledge is often
distinguished between tacit (or implicit) knowledge
and explicit one (Polanyi, 1967). Explicit knowledge
can be codied (e.g. writing or drawing) and
articulated since it can be expressed formally and
systematically. Tacit knowledge corresponds to non
explicitable knowledge like e.g. skills, senses,
intuition, physical experiences, “job secrets”. We
can differentiate two kinds of tacit knowledge: the
individual and the collective one (Nonaka and
Takeuchi, 1995).
Let’s now consider the notion of knowledge
transfer. Knowledge transfer is the process by which
one unit of an organization, such as a group or
department, is affected by the experience of another
(Argote and Ingram, 2000). Knowledge transfer
allows increasing shared knowledge that, in turn,
may affect performance of receiver. These works
leads us to our first postulate of interest.
(Postulate 1). Considering knowledge transfer
means considering explicit and
tacit knowledge
transfer, eventually
also individual and group tacit
knowledge.
Davenport and Prusak (1998) defined knowledge
transfer as follows: (Postulate 2) Transfer =
Transmission + Absorption (and Use).
Please, note here the important distinction
between transmission and transfer. Postulate 2
indicates that transmitting by sending or presenting
explicit knowledge is not sufficient for transferring
it. A knowledge that is not absorbed (Cohen and
Levinthal, 1990) by its receiver is not transferred.
Knowledge is really absorbed when it can be put
into practice, justifying the “Use” part of the
expression.
According to Ivari, Linger (1999), Tuomi (1999)
and Grundstein (2009) -roughly speaking- an
information receiver interpreted the information “in
his own way”. Thus, (Postulate 3) Absorbed
knowledge is often “distorted”.
Knowledge is created through discourse in “ba”
that is the physical, mental and/or virtual arena of
knowledge creation. Ba is an expression in Japanese,
meaning in English approximately “place” (Nonaka
& Konno, 1998, p. 40). Nonaka and Konno (1998)
indicated that: (Postulate 4) Physical, face-to-face
experiences are the key to conversion and transfer of
tacit knowledge.
CHANGING PROVIDER IN AN OUTSOURCED INFORMATION SYSTEM PROJECT - Good Practices for Knowledge
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319
These postulates defined above are fundamentals
hypotheses that guide our discussion in Section 4.
4 GOOD PRACTICES FOR
KNOWLEDGE TRANSFER IN
A TRANSITION PROCESS
Our study concerns the transition from an outgoing
service provider to an incoming one during an
outsourcing IS development project in a public
institution. This transition consists of six activities:
the initialization, the Third Party Maintenance
TPM), the edition and validation of the transfer plan,
the knowledge transfer, the maintenance in
cooperation and the responsibilities transfer. It has to
be
performed in approximately twenty working days.
Postulates of Section 3 permit us to deduce good
practices for knowledge transfer in this transition
phase. We could think that explicit knowledge is
more easily transferable as it is teachable, codiable,
articulate. However, we have observed in reality,
that even explicit knowledge is hard to learn and
transfer due to limitations of explanation capacity
(documents) and codication ability (IT). We can
see in practice that, when the outgoing provider
transfers knowledge to the incoming provider,
knowledge can be distorted (Postulate 3). The level
of absorptive capacity of the receiver can also limit
explicit knowledge transfer (Postulates 2). Thus,
transmitting explicit knowledge is not sufficient for
transferring it. Postulate 2, which applies for not
only tacit but also explicit knowledge, confirms it.
Concretely, this means that even in the case of
explicit knowledge, transmission is not sufficient:
knowledge contained in documentations,
applications, and codes has to be absorbed, and use.
According to Postulate 1, the transfer of
documentations, applications and codes (explicit
knowledge) is not sufficient for efficiently
transferring the entire project (material and
knowledge) from the outgoing team to the incoming
one. A part of tacit knowledge also has to be
transferred. This tacit knowledge can also help to
understand and interpret the explicit one.
According to Postulate 4, physical and face-to-
face experiences between outgoing and incoming
teams are necessary for tacit knowledge transfer. All
of this encourages us to the following good practice.
(Good Practice 1). Organize global meetings (face-
to-face).
During the project, the service provider and the
IS department share and transfer knowledge to each
other. In particular, the service provider, namely the
IS department, transfers business tacit knowledge to
the outgoing provider. According to Postulate 3, this
tacit knowledge is “distorted” when the outgoing
service provider absorb it. We recall here that one of
transition phase objectives is to transfer knowledge
from the outgoing service provider to the incoming
one. If the outgoing service provider alone transfers
business tacit knowledge to the incoming service
provider then a supplementary distortion occurs,
even more deviating from the IS department
business vision. If the IS department participates to
knowledge transfer, then this distortion is reduce.
(Good Practice 2). The service provider (the IS
department) has to participate to meetings. This
good practice approaches the “joint collaboration”
key facilitator mentioned by Alaranta and Jarvenpaa
(2010) who recommend that the new provider and
the client work “closely hand in hand, first in
modularization and later in implementation of
services including software solutions”.
Meetings constitute an interacting ba (Nonaka
and Konno, 1998), (Nonaka, von Krogh and Voepel,
2006) and (Erden, von Krogh and Nonaka, 2008)).
In our application case, we added a “workshop
session” holding in the same place, during three
days. In this seminar, each participant of outgoing
service provider, incoming service provider and
internal IS department presented himself, its
experiences, its profile and its role in the project.
Project documents and IT were transmitted to
incoming provider and then discussed. The outgoing
team presented anomalies encountered during the
ISD project and the associated solving solution they
adopted.
When the outgoing provider transfers knowledge to
the incoming provider, knowledge can be distorted.
The PSTI usually realizes this distort later, when the
outgoing team definitely gone. Thus, the “Use” part
of Postulate 2 is very important in our application
case: it permits to make sure of knowledge
absorption by the incoming service provider. Then
(Good Practice 3). Skipping the Maintenance in
cooperation activity may have a negative impact on
project knowledge transfer.
Furthermore, we observed that, if no unusual
event happens during the Maintenance in
cooperation activity then this activity could lead to a
simple observation period. In order to enforce the
incoming team to use a part of its transferred
knowledge, a good practice is to introduce a project
use case during the maintenance in cooperation
activity of the transition. Good Practice 4 is a
candidate solution for this: (Good Practice 4) Plan
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320
to solve one or several ongoing incident(s) on the
project during the Maintenance in cooperation
activity. The outgoing team chose some incidents
and the incoming service provider had to solve each
of them. Such a practice also permits to create an
exercising ba facilitating the conversion of
(individual or group) explicit knowledge to
(individual or group) tacit knowledge.
5 DISCUSSION AND FUTURE
WORK
Our study is grounded in the concept of knowledge
and knowledge transfer process during a transition
phase in an outsourcing information system
development project. We discuss knowledge transfer
according to the literature. Literature brings
fundamentals theoretical concepts on knowledge
transfer that regains value for our issue of
outsourced project. Thus, we have exhibited some
interesting postulates for our problem. They indicate
that some dimensions inuence knowledge transfer
process in outsourced ISD project. Based on
postulates, we suggest some good practices for
efficient transfer knowledge in the transition phase.
Measuring concrete impact of good practices is a
difficult problem. For the moment, asking for the
project manager judgement is the only way to
evaluate the quality of the transition phase with or
without good practices. One of our future works is to
define an empirical method for this evaluation (e.g.
inspired from Lee’s work (2001)). Additional
aspects that might also be very relevant to include in
future related studies (leading to additional good
practices) are (i) improving the motivation and the
attitude of the involved participants and (ii)
improving the capacity of absorption of the
incoming service provider. These aspects are
important issues in knowledge transfer (Easterby-
Smith, Lyles and Tsang, 2008), especially for the
transition phase.
Our study concerns only one type of
organization. We also believe that guidelines can be
generalized to most of organizations faced to a
service provider transition in an outsourced IS
project.
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