Leveraging Knowledge and Expertise

What happens to knowledge when an organisation outsources or offshores? Despite the rapid growth of business and IT services, there is still a considerable lag when it comes to grasping the implications for knowledge and expertise management in these processes. Organisations often have a limited understanding of how new knowledge can be created and exploited, especially when outsourced activities are considered non-core services. Moreover, historically, outsourcing arrangements have typically been treated as transactional, with clients and suppliers keeping knowledge and expertise to themselves. In this scenario, the role of the supplier is to draw on its own skills, expertise, and knowledge in order to deliver the service as specified in the contract. But over the last ten years clients have been increasingly talking about and expecting partnering, innovation, and value-added from their outsourcing suppliers. In the 2020s market, with ever more demanding clients, suppliers are having to compete increasingly on their capacity to leverage knowledge-related value, often in partnership with their clients (Willcocks, Global business: Management. SB Publishing, 2021a; Journal of Information Technology, 36(2), 188–194, 2021b). In this chapter, we discuss what happens to knowledge and expertise in outsourcing arrangements, and how to realise benefits from knowledge creation and exploitation to achieve better performance and innovation. We focus mainly on the following topics: How organisations leverage knowledge in outsourcing relationships How supplier firms integrate diverse domains of expertise to facilitate knowledge transfer between on-site and offshore teams and across projects Managing expertise within and between projects.