Interorganizational Knowledge Management in a BPO

Organizations are pursuing the outsourcing of business processes (BPO) to offshore locations. However, current research has shown that an organizational learning gap between the client and vendor organizations leads to less than expected benefits. While networking and other distributed technologies provide a foundation for outsourcing, knowledge management (KM) can be used to bridge these gaps in BPO relationships. This exploratory research uses case studies to identify KM practices being used in BPO to build theoretical guidelines for the optimal KM focus area given combinations of BPO strategy and management models. The preliminary results indicate that the KM focus needs to shift from emphasizing structural capital towards a focus on customer or human capital as the BPO strategy becomes more core to the client’s value chain and the management model becomes partnership oriented. The results have implications for applying KM to increase BPO effectiveness.