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MIS Quarterly Executive Vol. 8 No. 3 / Sep 2009 123 2009 University of Minnesota
Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
OvercOming KnOwledge-Transfer
Barriersin infrasTrucTure managemenT
OuTsOurcing: lessOnsfrOma case sTudy1
Stephen HawkUniversity of
Wisconsin-Parkside
(U.S.)
Weijun Zheng
University of
Wisconsin-Parkside
(U.S.)
Robert W. Zmud
University of
Oklahoma (U.S.)
MISQUarterlyExecutive
Executive Summary
This article describes how a global rm (JohnsonDiversey, Inc. - JDI) and an offshore
Indian IT service provider (Wipro Technologies) successfully overcame the knowledge-
transfer barriers associated with infrastructure management (IM) outsourcing. Case study
evidence is used to describe how these two rms worked together to transfer responsibility
for managing JDIs entire infrastructure to Wipro using a global delivery model. The
article describes the specic knowledge-transfer challenges encountered and the solutions
used to overcome them during a three-phase migration plan. It concludes with important
lessons learned about pre-contract and post-contract activities that other organizations
can apply to increase the likelihood that IM offshore outsourcing will be successful.2
GROWING POTENTIAL FOR OFFSHOREOUTSOURCING OF INFRASTRUCTURE
MANAGEMENT
The globalization of IT services, as evidenced by the sustained growth of offshore IT
service providers, continues to thrive. Using new but rapidly maturing infrastructure
technologies, IT executives can exploit the lower costs associated with offshore
services while still enhancing their technological capabilities.
The experiences and knowledge gained since the early 1990s have led to the
emergence of relatively mature business models and practices for outsourcing
application development, both onshore and offshore. However, a similar set of proven
business models and practices for outsourcing infrastructure management (IM)has yet to be broadly disseminated. Figure 1 highlights some of the differences that
distinguish the outsourcing of application development from IM. Recently, however,
some Indian providers that had previously gained little traction beyond the remote
monitoring of servers and networks have been extending their markets into broader
IM outsourcing engagements that used to be the territory of domestic IM service
providers. NASSCOM, in conjunction with McKinsey & Company, estimated that
three-quarters of all IM activities could be outsourced offshore, creating a $26 billion
to $28 billion revenue opportunity by 2013, half of which might be captured by Indian
companies.3
This article focuses on the knowledge-transfer challenges associated with IM
outsourcing. We begin by providing an overview of knowledge-transfer conceptsrelevant to IM outsourcing in general and then describing the importance of
knowledge transfer for the evolving global delivery model for IM outsourcing.
1 Carol Brown is the accepting Senior Editor for this article.
2 This research was supported by a grant from the Sloan Foundation. We also acknowledge the helpful
feedback provided by Phil Zweig on an earlier draft of this paper.
3 Extending Indias Leadership of the Global IT and BPO Industries, a report by NASSCOM and McKinsey
& Company, available at www.Nasscom.org, 2005. Chinas offshore IT services industry has also been growing
rapidly, although most of the services provided there are not in infrastructure management. See Carmel, E., Gao,
G., and Zhang, N. The Maturing Chinese Offshore IT Services Industry: It Takes 10 Years to Sharpen a Sword,
MIS Quarterly Executive (7:4), 2008.
MISQE is
Sponsored by
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124 MIS Quarterly Executive Vol. 8 No. 3 / Sep 2009 2009 University of Minnesota
Hawk et al. / Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
We then describe the IM outsourcing experiences
of JohnsonDiversey, Inc. (JDI) and its offshore
partner, Wipro Technologies (Wipro). Our research
objective was to provide insights into the knowledge-
transfer barriers associated with IM outsourcing by
showing how JDI transferred IM knowledge from
its employees to Wipros employees. (Appendix A
describes the methodology followed in gathering the
case data.) Finally, we summarize the lessons learned
from the JDI-Wipro case to identify actions that client
rms can take to increase the likelihood of effective
knowledge transfer to IM service providers.4
KNOWLEDGE TRANSFER AND IM
OUTSOURCING
In outsourcing, knowledge transfer typically refers to
transferring knowledge from the clients employees to
the providers employees. A distinction is commonly
made between explicit and tacit knowledge5 and
the differences in their ease of transfer. Explicit
knowledge has been captured and encoded in writing
or in symbols, both of which facilitate subsequent
transfer. Examples are product specications or
4 Partially based on Beulen, E., Fenema, P. V. and Currie, W. From
Application Outsourcing to Infrastructure Management: Extending
the Offshore Outsourcing Service Portfolio, European Management
Journal(23:2), 2005.
5 See, for example, Sterol, M. and Frey, B. S. Motivation,
Knowledge Transfer, and Organizational Forms, Organization Science
(11:5), 2000, pp. 538-550; and Slaughter, S. A. and Kirsch, L. J. The
Effectiveness of Knowledge Transfer Portfolios in Software Process
Improvement: A Field Study, Information Systems Research (17:3),
2006, pp. 301-320.
formalized procedures that have been captured in the
form of text, tables, and diagrams. Tacit knowledge
is much more amorphous, as it is embedded within
an individuals mind and is hard to express, if at all,
in written or symbolic form without considerable
information loss. Tacit knowledge may concern how
to do something (e.g., how to diagnose a network
fault) or provide the contextual underpinnings for
carrying out a task.
In addition, recent research has suggested a third
type of knowledge: implicit knowledge, which lies
between explicit and tacit knowledge.6 Implicit
knowledge is not currently declarative like explicit
knowledge but, unlike tacit knowledge, could be
made explicit. For example, instructions on how to
perform a task may not describe every detail and
contingency that might arise in performing the task
but are nevertheless understood by those who are
experienced in carrying out similar tasks. If needed,
written instructions could be expanded to document
this implicit knowledge.
Knowledge transfer for IM outsourcing requires both
in-depth, specialized knowledge of each technologytower as well as extensive systematic knowledge
of the clients infrastructure. The provider needs
an understanding of the historical evolution of the
rms infrastructure and the geographical, physical,
and logical relationships between infrastructure
6 Leonardi, P. M. and Bailey, D. E. Transformational Technologies
and the Creation of New Work Practices: Making Implicit Knowledge
Explicit in Task-based Offshoring, MIS Quarterly (32:2), 2008, pp.
411-436.
Figure 1: Application Development Versus Infrastructure Management Outsourcing4
Characteristic Application Development Infrastructure Management
IT activities Designing, acquiring, building, enhancing,
and maintaining information systems
applications.
Designing, acquiring, building, enhancing,
maintaining, and administrating the
technology towers* that form a rms IT
infrastructure.
Type of service Project-based; typically no more than
12-month contracts for new development.
Continuous services; typically, at least
36-month contracts.
Performance
metrics
Quality of project deliverables, time
schedule, and cost performance.
Costs and service levels continuously
measured.
Need for onsite
presence
Dependent on taske.g., requirements
gathering, installation, or maintenance.
Onsite for tasks that require hands
and eyes for problem diagnosis and
resolution.
Need for security Limited to development environment. Broadly concerned with controlling access
to physical devices, data, and operating
environments.
*Technology towers typically include data center operations, server administration, network and telecommunication services, desktop support, and
help desk services.
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2009 University of Minnesota MIS Quarterly Executive Vol. 8 No. 3 / Sep 2009 125
Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
components. IM therefore requires expertise both
within and across the technology towers. Generally,
within tower knowledge tends to be more explicit in
character than across tower knowledge, as training
and detailed instructions can usually be provided for
the former but not the latter.
Much of the knowledge required for effective IM may
exist in the minds of client employees who acquiredtheir own knowledge through years of learning-by-
doing experience. This will make it very difcult for
the outsourcing providers employees to gain insights
into the interconnected components that form the
overall infrastructure and then effectively operate
and manage it. As a result, the amount of knowledge
that has to be transferred can be much greater than
expected. Client employees may have to prepare and
communicate much more extensive explanations
of why things happen than originally anticipated,
leading to delays in getting the providers employees
up-to-speed and greater up-front costs.
Transferring knowledge from client employees to the
providers employees can be accomplished through
a variety of means, such as training, observation,
written procedures, oral presentations, replicating
routines, and staging opportunities for client and
provider employees to interact. Such knowledge-
transfer mechanisms can be grouped into two
fundamental categories: 1) transferring directions
and 2) transferring routines.7 The former involves
encoding knowledge into explicit rules and procedures
that are then explicitly communicated. The latter
refers to the use of mechanisms that accomplishknowledge transfer without explicit communication
e.g., observing experts in their work, imitating the best
practices of others, and jointly accomplishing a task.
Given the inevitable information loss that
accompanies making rules and procedures explicit,
routine knowledge-transfer mechanisms have the
advantage of economizing on communication
and a greater capacity to vary responses to a broad
range of circumstances. 8 relative to direction
knowledge-transfer mechanisms. Further, transferring
knowledge often entails a series of events thatcomprise a portfolio of knowledge-transfer
mechanisms, with the composition of any specic
portfolio tied to the nature (i.e., explicit vs. implicit vs.
tacit) of the knowledge being transferred.9
7 Slaughter, S. A. and Kirsch, L. J., op. cit., 2006.
8 Grant, R. M. Prospering in Dynamically-competitive
Environments: Organizational Capability as Knowledge Integration,
Organization Science (7:4), 1996, p. 379.
9 Slaughter, S. J. and Kirsch, L. J., op. cit., 2006; Leonardi, P. M., and
Bailey, D. E., op. cit., 2008.
EFFECTIVE KNOWLEDGE
TRANSFER IS CRUCIAL FOR
THE IM OUTSOURCING GLOBAL
DELIVERY MODEL
While IM outsourcing is one of the oldest forms of
IT outsourcing, until recently, the vast majority of
such arrangements have involved domestic serviceprovidersdespite the potential for large arbitrage
and time zone advantages10 associated with offshore
outsourcing. There are two reasons for a rms
hesitancy to engage with an offshore provider for IM
outsourcing:
1. The need for an onsite presence.
2. The need for effective transfer of knowledge
about the intricacies of a rms infrastructure
and its management from the clients
onsite employees to the providers offshore
employees.
A providers knowledge-transfer capabilities and
ability to integrate the knowledge of a globally
distributed service delivery team affects the speed and
degree to which onsite stafng costs can be reduced.
The knowledge-transfer barrier has intensied
with the IM outsourcing business models that
have emerged since 2004. With the traditional
IM outsourcing business model, the provider
initially handled most work activities using onsite
personnel and then, gradually, increased the use of
remote services. In executing this business model,the provider often hired many of the clients IM
employees.11 Eventually, as the provider grew to better
understand the clients infrastructure, and as cost
savings and service improvements accrued, up to 80%
of the IM work was eventually done off-site (onshore
or offshore) if the vendor and client chose to do so.
10 By 2003, the vast majority of comprehensive IM engagements
were taken on by domestic providers that would often provide some
services from remote delivery centers, usually located in the same
region or continent as the customer. See Moore, S. and Rankine, C.Offshore Outsourcing Options for IT Infrastructure Support: What
You Need to Know, in Giga Research Report, 2003. For descriptions
of advantages of IM offshoring, see Saia, R. Outsourcing IT
Infrastructure: The Productivity Payoff, in Aberdeen Group Report,
2007; and Carmel, E. and Tjia, P. Offshoring Information Technology:
Sourcing and Outsourcing to a Global Workforce, Cambridge
University Press, 2005.
11 This model is described in Moore, S. and Rankine, C., op.
cit., 2003. For examples of domestic providers hiring of clients
IM employees, see Overby, S. Outsourcing: The Pros and Cons
of Offshore Remote Infrastructure Management, www.cio.com/
article/198450/Outsourcing_The_Pros_and_Cons_of_Offshore_
Remote_Infrastructure_Management, March 18, 2008.
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Hawk et al. / Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
Today, the IM outsourcing business model emerging
with both domestic and offshore providers is a global
delivery model.12 With this model, the use of offshore
resources is maximized as soon as possible.13 Not only
does the global delivery model reduce the need to
absorb the clients employees but, where successful, it
dramatically enhances the value proposition for both
the client and the provider.
However, for the global delivery model to work to
its maximum potential, the provider and client must
swiftly overcome the knowledge-transfer barrier. The
provider has to rapidly learn and apply the knowledge
that the client rm has accumulated over several
years. The global delivery model is used by Indian
providers, and major domestic IM providers are now
using it to supplement the traditional IM outsourcing
model, typically offering their customers the option
of using either domestic or offshore facilities, or a
combination of both. As of 2007, Forrester Research
had identied 19 providers using the global delivery
model for IM outsourcing, all of which were either
domestic providers from North America or the
European Union, or IT providers from India.14
The dangers of insufcient knowledge transfer prior
to taking over IM responsibilities using a global
delivery model by both domestic and offshore
providers are twofold. First, without sufcient
knowledge, productivity and service levels will
suffer considerably. Second, the client will lose
much of its organizational memory of how to
manage its infrastructure if, as is common in offshore
arrangements, client employees are let go. Not onlydoes the global delivery model place much more
stringent demands on the knowledge-transfer process
than the traditional domestic model, but failures in
arrangements using the global model can have serious
consequences for both the client and the provider.
In the case described below, an offshore provider
(Wipro) worked with a domestic client (JDI) to
successfully cope with the challenges of transferring
knowledge from the clients employees to the provider
employees.
12 The global delivery model involves the use of onsite employees
and multiple offshore delivery centers across the globe. A service
provider using this model need not own all the offshore delivery
centers, but can use the resources of partners located around the globe.
13 Beulen, E., Fenema, P. V. and Currie, W., op. cit., 2005, p. 11.
14 Roerig, P. The Forrester Wave: Global IT Infrastructure, Q2,
2007, Forrester Research, Inc., June 2007.
DESCRIPTION OF THE CLIENT
AND OFFSHORE IM PROVIDER
In our case study, the two major players were Wipro
Technologies and JohnsonDiversey, Inc. (JDI).
Wipro Technologies
Wipro Technologies began in 1980 as a computermanufacturer and an IT services rm within Wipro
Limited, and initially concentrated on selling
computers and providing application development
and IM services to the domestic Indian market. Wipro
has been the leading provider of IM services to Indian
customers since the early 1980s and is now one of
the leading Indian providers of offshore IM services.
Headquartered in Bangalore, Wipro is currently
the third largest IT services company in India. As
of Dec. 31, 2008, it had over 99,000 employees and
53 delivery centers across the globe. Wipro derives
approximately 8% of its global revenue from IM-related services and, early on, obtained ISO 2000 and
BS15000 certication for IT services management to
be positioned for IM growth.
Until recently, Wipros primary business model for
supporting end-to-end IM services contracts was to
locate its employees onsite at the customers premises.
But since about 2004, it has aggressively adopted
a global delivery model strategy for delivering
IM services. Now, most IM services are provided
from three dedicated remote IM facilities (Global
Command Centers) in Bangalore, Chennai, and Pune
using a robust global IM services delivery platform.
JohnsonDiversey, Inc.
JDI has its origins in SC Johnson & Son, Inc. Founded
in Racine, Wisconsin in 1886, SC Johnson began by
selling wood ooring but soon sold paste wax to its
wood ooring customers and has since expanded into
numerous product lines. Today, it provides leading
brands in areas such as home cleaning, home storage,
and personal care products. Initially, JDI was a
service products division within SC Johnson, selling
commercial cleaning products. It separated from SCJohnson in 1999 to become Johnson Wax Professional
and, in 2002, acquired DiverseyLever from Unilever
Corporation to become JohnsonDiversey, Inc. With
this acquisition, JDI became the second largest rm
worldwide in the commercial cleaning products
business. The rms current revenues are about $3
billion, and its 13,000 employees operate out of 300
locations in 68 countries.
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Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
Prior to being acquired, DiverseyLever had a
decentralized IT organization with a proliferation
of applications. Johnson Wax Professional had a
more centralized and standardized approach to IT
management. Soon after the acquisition, JDI began
consolidating the DiverseyLever IT organization into
the Johnson Wax Professional (now, JDI) architecture.
However, JDI faced a serious nancial problem in2005a combination of the debt incurred to fund the
acquisition and the doubling of crude oil prices. Under
heavy pressure to reduce costs, the IT organization
was charged with reducing its budget from 4.3% of
revenue to an industry average 2.5%, with 60% of
the savings expected to come from IM and the other
40% from application development. This translated to
a targeted annual reduction goal of $29 million from
savings in the IM area.
After exploring its options, the consolidated JDI
IT organization chose outsourcing as the strategy
for meeting cost reduction goals in both IM andapplication development. In both areas, only
architecture planning, project management, and
user liaison functions would remain within the IT
organization. While cost reduction was a primary
driver for this decision, other important goals
included improving service levels, where possible,
and reorienting the IT organization to focusing on
identifying business opportunities and resolving
business problems. Although JDI had engaged in
IM outsourcing via onsite contractors and had a
limited offshore outsourcing arrangement (for remote
network and server monitoring), this (almost) total IMoutsourcing initiative was a major departure for the
rm.
At the beginning of the Wipro engagement, JDI
operated two major data centers (Sturtevant,
Wisconsin and London, England) supporting
enterprise (ERP) applications for 54 countries. The
remaining 14 countries are in Africa and the Middle
East, and run small local ERP systems. In addition
to hosting ERP applications, JDIs infrastructure
supports IT operations in 31 manufacturing facilities,
105 warehouses, and approximately 160 sales ofces.
PREPARING TO OUTSOURCE IM
ACTIVITIES TO WIPRO
While carrying out a provider selection process
and negotiating a set of service-level agreements
(SLAs) with the selected providerWiproJDI
continued to rationalize its IT infrastructure assets
and IM processes. This initiative had begun after the
DiverseyLever acquisition and continued into the
transitioning of IM responsibilities to Wipro.
Rationalizing Infrastructure Assets and
IM Processes
JDI had begun to rationalize its infrastructure assets
and IM processes prior to the crisis that led to theoutsourcing agreement with Wipro. Although these
efforts were undertaken to reduce infrastructure
complexity and cost, they paid extra dividends
once the IM transition to Wipro was underway. JDI
categorized, documented, and rationalized all of
its IT assets and IM processese.g., infrastructure
technologies and IM policies and procedures were
standardized with the objective of reducing them
to a relatively small set of standard components and
practices.
A key step was to segment infrastructure assets into
six classes of sites, with each class differentiated
according to hardware conguration, support
requirements, and performance metrics (see Figure 2).
The two main data centers, which required the highest
level of reliability, were congured with the highest
component redundancy and were provided with the
highest level of onsite support. At the other end of the
spectrum, class E sites (sales ofces with ve or fewer
users) were provided with an Internet-based virtual
private network (VPN), no onsite support, and no
guaranteed reliability or performance metrics.
This rationalization effort proved much more difcultthan expected.15 DiverseyLever used SAP as its core
ERP system, while Johnson Wax Professional used
JD Edwards. JDI estimated that, just in Europe,
there were 900 miscellaneous applications that
were undocumented at the enterprise level and that
depended on local support. Moreover, some of these
applications were hosted or developed by third parties
that no longer existed.
While this initiative to rationalize infrastructure
assets and IM processes was far from complete when
JDI began to seek IT service providers to take on itsIM activities, both JDI and Wipro were able to reap
the benets of the progress that had been made. The
component and process standardization that had
15 An overview of the challenges of post-merger information system
integration is provided in McKiernan, P. and Merali, Y. Integrating
information systems after a merger, Long Range Planning (28: 4),
1995, pp. 4-5. Lessons learned from a successful integration are
provided in Brown, C., Clancy, G., and Scholer, R. A Post-Merger IT
Integration Success Story: Sallie Mae,MIS Quarterly Executive (2:1),
2003, pp. 15-27.
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Hawk et al. / Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
already been carried out had reduced the complexity
of the IM task, correspondingly reducing the amount
of knowledge that had to be transferred to Wipro.
The rationalization of IM processes had also resulted
in much IM knowledge being explicitly codied,
making it easier to transfer this knowledge. Dening
IM processes, together with the segmentation of
sites shown in Figure 2, also proved invaluable in
easing JDIs task of dening service levels for an IM
outsourcing contract based on sound business realities.
A major rationalization step that was planned beforethe Wipro engagement, but not carried out until after
the transition to Wipro, was to close the main data
center in London and consolidate all its work into a
single data center in Sturtevant.
Provider Selection
Following responses to the initial request for proposal
(RFP), eight providers were asked to submit full
proposals. Although JDI didnt exclude the possibility
of sourcing IM and application development to
different providers, the eight nalists had all submitted
proposals for both IM and application development.
Among the preliminary proposals that werent
considered further were a few from providers for
just IM or application development. These providers
wanted to work with other providers to offer the
full range of services sought by JDI. The main
reason these providers werent invited to submit full
proposals is that they didnt provide the same degree
of cost reduction as the eight nalists.
After evaluating the responses, Wipros proposal and
one from a leading U.S. service provider were selected
for further consideration, and JDI began detailed
discussions with them. Both rms then developed nal
proposals for a ve-year outsourcing engagement.
As part of the evaluation process, JDI investigated
the knowledge-transfer processes of both providers,
which provided details of their methodologies,
Figure 2. Six Classes of IT Operations at JDI Sites
Site
Class
Description Confguration* Support Reliability
Goal
Data
Center
Main Data Center Two MPLS WANs
Dual WAN and LAN equipment and circuits
Diverse power to equipment with, battery or
generator backup
24x7x365
On-site
employees
99.95%
A Large Manufacturing
Facility
Two WAN circuits, at least one an MPLS
Separate routers for the WAN circuits
Diverse power to equipment, with battery or
generator backup
24x7x365
On-site
employees
99.9%
B Small Manufacturing
Facility/
Multifunction Ofce
Two WAN circuits, at least one an MPLS
Single router for the WAN circuits
Battery backup
24x7x365
On-site
employees
99.6%
C Large Sales Ofce Single MPLS WAN
Single router
Battery backup
8x5 98.6%
D Medium Sales Ofce VPN for WAN connectivity
Single router
8x5 95%
E Small Sales Ofce Internet VPN client on PCs 8x5 Best effort
*Sites are connected to each other using MPLS (Multiprotocol Label Switching)a proprietary WAN provided by MCI that provides secure,
high-capacity VPN services globally with quality of service guaranteesor via an Internet-based VPN. Specic sites have MPLS or Internet VPN
connectivity, or both.
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2009 University of Minnesota MIS Quarterly Executive Vol. 8 No. 3 / Sep 2009 129
Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
processes, tools, and timelines for accomplishing
knowledge transfer. JDI also carried out due diligence
by talking with customers of both providers. While the
two proposals were comparable in terms of service
delivery and use of offshore delivery resources,
Wipros projections of greater cost savings for JDI
resulted in it being selected. (Wipro was also selected
as JDIs application development partner.16)
JDI would retain responsibility for IM planning and
oversight. Responsibilities for managing servers
and PCs, along with all networking connections
and devices, would be transferred to Wipro. While
Wipro would be responsible for desktop support and
operating a help desk, most of these activities would
be carried out by a subcontractor already possessing
the capability to provide onsite support in the 68
countries and the several languages used globally
within JDI. Wipro had neither the subcontractors
geographic reach nor its ability to support all the
needed languages.
While Wipro would meet the onsite presence needs
at JDIs major data centers with its own personnel,
responsibility for providing an onsite presence at
smaller data centers and sales ofces would lie with
the subcontractor providing desktop support and the
help desk. In all cases, these onsite personnel would
be expected to resolve problems via a smart hands
capability under the guidance of offshore Wipro
technicians. Smart hands refers to the use of onsite
employees who are knowledgeable enough to visually
inspect a device and replace a part in it by following
instructions but who typically lack the in-depthexpertise of the offshore technicians.
Developing Service-Level Agreements
JDI and Wipro developed SLAs with monthly,
quarterly, and annual service level targets, including
penalties to be paid by Wipro when targets were not
met. Wipro was given a 90-day grace period once
it took over responsibility for a specic IM area,
after which, it was accountable for the negotiated
performance metrics. The beginning dates for Wipro
to take over specic IM activities were heavilyinuenced by initial estimates of the amount of time
needed to transfer the required knowledge from JDI
employees to Wipros employees.
16 We had expected there could be interactions from having a
single provider taking on JDIs IM and application development at the
same time that could make it difcult to separate IM and application
development issues from each other. But, as explained in Appendix A,
this turned out not to be so.
In addition to these negotiated SLA targets, JDI
developed internal surveys to provide qualitative
metrics to complement the quantitative SLA
performance metrics. These surveys were used
monthly to assess its employees (primarily business
users) satisfaction with Wipros services. JDI used
the survey results twice a year to evaluate Wipros
performance, with Wipro being held accountable for
meeting agreed-on user satisfaction targets.
THREE-PHASE APPROACH TO
TRANSFERRING KNOWLEDGE
FROM JDI TO WIPRO
The knowledge-transfer process used by Wipro
to acquire the knowledge needed to manage JDIs
infrastructure comprised three phases: preparing for
knowledge transfer, transferring the knowledge, and
transferring IM responsibility and integrating the
knowledge across Wipro. These three phases closelymatch the three-phase approach recommended by
Chua and Pan17 for transferring knowledge in IT
offshoring:
1. Initiation and planning, where the knowledge
to be transferred is identied.
2. Ramp up, where most knowledge transfer
occurs.
3. Integration, where actions are taken to ensure
that sufcient knowledge has been absorbed by
the providers employees.
In this model, knowledge is rst transferred from
client employees to a select group of the providers
employees who are sent to client locations for
this purpose. This select group then passes on the
knowledge to the providers offshore employees.
Since the select group of onsite employees tend to
be more senior and have more onshore experiences,
they have better language skills, greater sensitivity
to cultural differences, and more knowledge of the
clients technology and markets. They are therefore in
a better position to assimilate the clients knowledge
than offshore employees. The select group ofonshore employees then does much of the work
of communicating the knowledge to their offshore
17 Chua, A. L. and Pan, S. L. Knowledge Transfer and
Organizational Learning in IS Offshore Sourcing, OMEGA (36), 2008,
pp. 267-281.
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colleagues.18 This two-step knowledge-transfer
process helps to minimize problems from language
and cultural differences that may arise in offshore
engagements.
IM responsibilities for JDI sites were transitioned to
Wipro over time, with all three knowledge-transfer
phases undertaken as each site was transitioned. The
rst site to be transitioned was the global data centerin Sturtevant in late 2006, followed by the second
major data center in London. These were followed by
the smaller sites with the last transfer of responsibility
to Wipro being completed in late 2007. Site transition
processes took from six weeks to six months for the
main data centers and class A and B sites, one to two
weeks for class C and D sites, and very short time
periods for class E sites.
Phase 1: Preparing for Knowledge
Transfer
During this phase, Wipro and JDI identied the
knowledge that needed to be transferred and planned
the transfer process. Early on, JDI encoded its IM
knowledge using the templates supplied with Wipros
knowledge-transfer methodology, which had been
developed over time by Wipro from experiences
gained from prior client engagements. The Phase
1 effort started with knowledge about JDIs two
major data centers and enterprise applications, and
then shifted to regional and local technology towers.
However, in identifying the knowledge elements that
needed to be transferred, issues of context constantly
arosee.g., Why is this server so important?and Why is this server located here? Both rms
soon recognized that a much broader, richer view
of context needed to be incorporated into the
knowledge-transfer process. JDI and Wipro jointly
developed enhancements to Wipros knowledge-
transfer methodology so that enriched context could
be incorporated, and then applied the enhanced
methodology.
Phase 2: Transferring the Knowledge
Actual knowledge transfer involved three steps:knowledge acquisition, client-led shadow, and vendor-
led shadow. At the conclusion of the vendor-led
18 For an example of two-step knowledge transfer, see Oshri, I.,
Kotlarsky, J., and Willcocks, L. Managing Dispersed Expertise in
IT Offshore Outsourcing: Lessons from Tata Consultancy Services,
MIS Quarterly Executive (6:2), 2007, pp. 53-65. Leonardi, P. M. and
Baily, D. E., op. cit., 2008, discuss the role of more experienced on-site
employees in translating between the language and knowledge of the
client, and the detailed instructions needed by offshore employees.
shadow step, Wipro personnel were considered ready
to assume responsibility for supporting a JDI site.
Knowledge Acquisition Step. This step lasted from
less than a week to a couple of months, depending on
the breadth of IM activity and number of people at a
site. Knowledge acquisition was achieved through
multiple learning approaches involving documenting
assets and processes as specied in Wiprosknowledge-transfer methodology as well as the use
of videos, system demonstrations, hands-on-access,
and interpersonal knowledge sharing. Generally, these
knowledge acquisition activities engaged onsite Wipro
employees, with the knowledge presented to them
being played back to JDI employees so they could
validate what had been learned. Once validated, the
onsite Wipro employees shared the knowledge with
their offshore teams.
Client-led Shadow Step. In this second step,
Wipro employees worked side-by-side (onsite or
remotely) with JDI employees performing specicIM tasks. The Wipro employees role was to observe
what the JDI employee did, with the JDI employee
responding to questions and making sure that the
Wipro employee understood what was being done.
To ensure that a wide variety of issues and situations
were experienced, simulated scenarios were played
out along with day-to-day work activities. Once Wipro
employees had observed a sufcient variety of issues
and situations and appeared to understand how to
resolve these, the vendor-led shadow step began.
Vendor-led Shadow Step. The third and nal step intransferring knowledge involved Wipro employees in
leading IM activities, with JDI employees monitoring
what the Wipro employees did and assisting when
necessary. Normally, the JDI employee would step in
only when skill gaps were recognized. This step was
considered completed when Wipro employees were
able to handle IM activities well enough to meet SLA
targets.
In practice, the vendor-led and client-led shadow
steps often overlapped at a given site, with some
IM activities being in the client-led shadow step,while others had already progressed to the vendor-
led shadow step. Together, these steps lasted about
four to six weeks for most class A, B, C, and D sites,
although they took up to three or four months in a few
instances. The three steps were accomplished much
more quickly at class E sites.
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Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
Phase 3: Transferring IM Responsibility
and Integrating the Knowledge Across
Wipro
The last phase involved transferring IM responsibility
to Wipro and integrating the knowledge gained about
an IM activity or a site across all relevant Wipro
personnel and departments. During this phase, Wipro
used the knowledge it had gained to integrate JDI
work routines with its work systems and both to
optimize its service efforts and to minimize onsite
employee requirements. It was thus able to move to
offshore provisioning of remote IM services to the
fullest extent possible, as quickly as possible.
Challenges Faced During Phase 3. Several
challenges arose during the process of transferring
work and integrating IM knowledge across Wipro.
The most signicant were:
Difculty in resolving complex problems.
Inadequate preparation for impending changes
of IT employees retained by JDI and business
users.
Delays encountered during the transition
process.
Difculty in Resolving Complex Problems.
Although there are technical solutions for resolving
infrastructure problems remotely,19 there are complex
problems that require the collaboration of experts. At
rst, Wipro had some difculty in resolving complex
IM problems that involved multiple towers. Wipro
handled such a problem by giving it to the tower
specialist who appeared best suited to solve it, and
would then pass the problem on to a different tower
specialist if the rst one was unable to resolve it.
Unfortunately, this sequential, tower-centric approach
too often resulted in signicant delays in resolving
problems. Wipro subsequently modied its approach
to resolving problems identied as complex: for these
problems, the process began with a virtual meeting. As
described by the former server tower lead:
[There were many] people on the callwhich
might be all the tower [specialists] involved.As soon as a specialist gures out it is not his
issue, he can leave. Its all done together, and
within 15 minutes, we can quickly get down to
the two people that will be able to solve the
problem.
19 Appendix B provides an illustration of how offshore
administration was used by Wipro and JDI.
While not all problems are complex, the frequency
with which such problems arise in IM makes this an
important issue. As the former JDI network tower lead
noted:
when it came to the more complex
problems, the guys that really understood how
things are put together and could analyze the
situation were all sitting here [in Sturtevant].
The reason why its good to have experts hereis they can talk to each other. ... If you dont
have that exchange of information between the
teams, it takes a lot longer to solve because
they just pass it around, and it takes a lot
longer to identify the problem.
The use of virtual teams by Wipro served a purpose
similar to the more informal approach JDI had used
for solving complex, cross-tower problems prior to
outsourcing IM. Once Wipro had adopted this type of
collaborative approach20 for problem resolution, JDI
observed signicant improvements in service quality.
Inadequate preparation of JDIs IT employees
retained by JDI and business users. The transfer of IM
responsibilities and knowledge-integration phase was
also a period of organizational transformation for JDI.
As Wipro assumed responsibility for IM activities at
a site, JDI employees were either transferred to new
roles with other JDI work groups or let go. Retained
IT employees went through a skills and knowledge
rediscovery process so that each employees
knowledge and skills could be best integrated into a
new JDI organization structure and to enable newlycreated value-adding IT roles.
Most of the retained JDI IM managers were tower
leads who used to spend time on routine IM
administration activities as well as on resolving the
more challenging break and x problems. These
managers are now in an IT architecture planning
group, and the former lead for desktop support serves
as the main JDI contact for resolving IM problems
that have escalated up the Wipro hierarchy without
adequate resolution.
20 This solution approximates the process used by Infosys to
overcome time zone differences in application development work.
Infosys has developed a process for holding regular real-time meetings
involving key personnel as an important tactic for overcoming time-
zone differences. Although the meetings between JDI and Wipro
werent regularly scheduled, they served much the same purposeto
get the relevant specialists together and decide what was needed to
resolve a problem. See Carmel, E. Building Your Information Systems
from the Other Side of the World: How Infosys Manages Time Zone
Differences,MIS Quarterly Executive (5:1), 2006, pp. 43-53.
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Retained IM employees were often found to be
insufciently prepared for their new IM roles in
several ways:
For the stress experienced as many coworkers
were let go.
For understanding how their prior IM
responsibilities would be handled once the
transition was complete.
For their new organizational role.
As a result, two IM managers designated to be
retained unexpectedly left JDI, and other retained IM
managers kind of checked outi.e., they were not
sure what their new role was to be and were not happy
with the on-going changes.
Some changes were also viewed negatively by
business userse.g., certain of the negotiated SLAs
actually reduced service levels because of priority/cost
tradeoffs. Also, the changes in how desktop supportwas handled required adjustments by many business
userse.g., rather than simply contacting an onsite
IM employee, a business user had to go through a
more formal procedure involving provider employees
to resolve a problem. As a result of these and similar
issues, some business users became dissatised,
particularly if they had had little input into the change,
and did not fully understand the new work procedures
or SLAs.
After responsibility for the rst few sites had been
transitioned to Wipro, JDI improved the way it
communicated changes to business users. It also
introduced a more proactive change-management
program for business users by forming outsourcing
support groups that included JDI IM managers along
with Wipro and subcontractor representatives.
Delays encountered during the transition process.
Unexpected delays also arose during the transition
process. Many of these delays can be explained
because Wipros bid for the JDI contract used very
general metrics (such as number of servers and PCs,
number of users, and number of application systems).
These metrics were used as the basis for estimatingtransition and support time frames and costs, and
to derive the fee structure. As it turned out, Wipro
and JDI had underestimated the complexity of JDIs
infrastructure and found themselves having to use
far more hands and eyes on the ground for a much
longer period than initially planned. However, JDI
had used the initial schedule to set and communicate
termination dates to IM employees who would not
be retained, and when the transition schedule proved
unrealistic, many of these employees had to be asked
to stay on longer than planned. While JDIs HR
group ran into occasional difculties, most of these
employees were kept on longer (most often through
extra payments). When this was not possible, less
knowledgeable, but available, employees had to be
used.
IMPACT OF THE TRANSITION
ON JDIS IM ORGANIZATION
STRUCTURE
Figure 3 contrasts the organizational structures for
JDIs IM units before and after IM responsibilities
were transitioned to Wipro. Before the transition,
105 employees in Global Infrastructure Services
supported the different technology towers globally
within the two major data centers. The Architecture
and Sourcing group consisted of a single individual. In
addition, there were 11 regional infrastructure groupsemploying a total of 100 employees who were located
worldwide to support local infrastructures. There was
also a program/project management group (not shown
in the gure) that provided leadership to both IM and
application development projects.
The new JDI IM organization structure is not only
leaner but also is much more adapted to JDIs business
needs. Since application development work was
transferred to Wipro between late 2006 and late 2007,
most application development employees were also let
go during the same time frame as this case. The maingroups that remain for supporting IM and application
development are the Architecture and Solution Design
group and the Program and Project Management
group.
After IM responsibilities had been transferred to
Wipro, the Architecture and Solution Design group
comprises just 10 employees, three of whom focus
on IM issues. A Vendor Management group of six
employees was formed to monitor and manage the
work of Wipro and other vendors. Finally, a Program
and Project Management group was established
to provide JDI leadership for IT projects. Of the
25 employees in this group, 18 lead application
development projects and seven lead infrastructure
initiatives. Thus the number of JDI employees
dedicated to IM work has been reduced from 206 to
10 (three in Solutions and Architecture and seven in
Program/Project Management). In addition, the six
employees in Vendor Management work on both IM
and AD engagements.
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Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
Finally, JDI continued its efforts to consolidate and
standardize its infrastructure assets, which began
prior to the nancial crisis and continued during
and after the transition of IM to Wipro. This further
rationalization was crucial to JDIs achievement of IM
cost reductions as well as Wipros ability to provide
JDI with a stream of value-added benets.
After the transition to Wipro was complete, Wipro
initially staffed the JDI account with 150 of its
employees, with 25% onsite and 75% offshore. With
experience and further progress in rationalizing the
infrastructure, Wipro has been able to reduce its
stafng to the current level of 110 employees, with
20% onsite and 80% offshore.
JUDGING THE SUCCESS OF JDIS
IM OFFSHORE OUTSOURCING
STRATEGY
Although challenges arose along the way, JDI
considers its IM offshore outsourcing strategy a
success. The key indicators used to assess the success
of IM outsourcing in the short run were meeting
stipulated cost reduction goals while achieving
service level targets. Once JDI had fully transferred
responsibility for IM to Wipro and reduced internal
IT employee levels to targeted numbers, it was able
to achieve its cost-savings goals. JDIs internal goal
for the new IM strategy was annual cost savings
of $29 million in the IM area. Although this goal
was not achieved as quickly as planned because the
transfer of some IM activities to Wipro took longer
than expected, it was achieved in the rst year post-
transition and is now being exceeded. And, after
taking over responsibility for an area, Wipro metagreed-on service level and customer satisfaction
agreements for all areas at a 95% rate within one
year.21 According to JDIs contract oversight manager:
Wipro came very close to meeting
performance goals within three to six months
in every area, without exception.
Wipro has also continued to make signicant progress
in enhancing service levels and improving JDI IM
productivity, but, as an interviewee stated, cost
savings are not even half the story. Wipro is striving
to create other differentiators by showcasing hiddencosts in managing a technological infrastructure. For
example, previously, JDI did not account for losses in
productivity and revenues due to system downtime.
These losses are now tracked and reported. Also,
since Wipro is able to record and archive every JDI
21 While some service level problems did arise in one country after
the cutover to Wipro, errors in how the incident reporting system closed
tickets during May/June 2007 were discovered. This misreporting
resulted in overstating the reported SLA underperformance.
Figure 3: JDIs Pre- and Post-outsourcing IM Organization Structure
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Hawk et al. / Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
IM incident within its Global Command Center,
subsequent analyses have allowed Wipro to forecast
and prevent many problems before they occur. As
noted by a JDI employee:
From my view, the most signicant
improvement is the extensive server and job
monitoring that was put in place to identify
issues before they reach users. The Global
Command Center in India has established
parameters for server performance and critical
job monitoring that have proven extremely
benecial in reducing the number of incidents
logged by users, preventing downtime, and
identifying, then either xing or re-running,
jobs critical to the business, that otherwise
would have failed.
LESSONS LEARNED FOR OTHER
ORGANIZATIONS CONSIDERING
IM OFFSHORE OUTSOURCING
Many market forecasters project that IM offshore
outsourcing will grow rapidly as organizations
aggressively seek opportunities to reduce IM costs
and improve IM service levels, and predict that Indian
companies will quickly capture about half of the
offshore market. Other researchers have pointed out
that early U.S. preferences for outsourcing to India
were due to lower language barriers and a history of
closer ties to the Western world.22
Our study supports these predictions: JDI reported
that cultural and language barriers were only minor
22 For example, see McFarlan, F. W. and DeLacey, B. J. Outsourcing
IT: The Global Landscape in 2004, Harvard Business School Note 304-
104.
issues affecting service delivery but not a major
impediment to knowledge transfer. We also found
that Wipro, along with other leading Indian providers,
has well-established programs for familiarizing its
employees with the culture of their clients countryand improving language skills. The relative absence
of problems in the JDI-Wipro case stemming from
cultural and language issues suggests that these
programs have been successful.
As our case description shows, however, the
operational capabilities of vendors are not the only
determinants of IM outsourcing success that should be
assessed. A client company must anticipate and plan
to overcome the knowledge-transfer barriers so the
provider can acquire the required knowledge of its IM
practices and the associated business contexts.
Our examination of the IM offshore outsourcing
partnership between JDI and Wipro provides eight
lessons for organizations considering engaging an
offshore provider to handle some, or most, of their
IM activities. These lessons are summarized in Figure
4. Lessons 1 to 4 focus on pre-contract activities and
Lessons 5 to 8 focus on post-contract activities.
Pre-Contract Activities
Lesson 1: Place a High Priority on Knowledge-
Transfer Planning and Execution. Transferring aclients IM knowledge to the providers employees
is likely to be the criticaland most challenging
activity when the global delivery model is used for
IM outsourcing. Transferring in-depth, specialized
knowledge of each technology tower as well as
extensive systematic knowledge of the clients
infrastructure is complicated and requires extensive
work and careful coordination. Within an offshore
outsourcing context, IM knowledge transfer is likely
Figure 4: Lessons Learned
Pre-contract Activities
Lesson 1: Place a high priority on knowledge-transfer planning and execution.
Lesson 2: Begin rationalizing your infrastructure assets and IM processes as soon as possible.
Lesson 3: Assess the providers knowledge-transfer capabilities as part of the selection process.
Lesson 4: Help potential providers to understand the complexity of your infrastructure as part of the RFP
process.Post-contract Activities
Lesson 5: Apply a visible phased approach for managing knowledge transfer and IM transfer.
Lesson 6: Use synchronous (physical and virtual) meetings to understand complex problems.
Lesson 7: Ensure employees are retained until knowledge has been transferred.
Lesson 8: Prepare both to-be-retained IM employees and business users for the new IM environment.
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Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
to be even more difcult due to greater geographic
and time zone distance as well as greater cultural
diversity across the global delivery team members.23
Fortunately, JDI management foresaw the potential
knowledge-transfer challenges with Wipros global
delivery model and prioritized knowledge-transfer
planning and execution in its IM outsourcing project
management.
Lesson 2: Begin Rationalizing Your Infrastructure
Assets and IM Processes as Soon as Possible.
While the value of rationalizing (i.e., consolidating,
standardizing, and documenting) infrastructure assets
and IM processes is well-recognized,24 rationalization
is extremely advantageous in preparing for a smooth
knowledge-transfer process from the client to
outsourcing provider. Although JDIs initiative to
rationalize its IM infrastructure assets and IM process
had not been completed when the contract with
Wipro was signed, both JDI and Wipro were able to
leverage the work that had been done. Had JDI not
already made considerable progress in rationalizing
its infrastructure assets and IM processes prior to the
Wipro engagement, the entire transition would most
certainly have been more difcult, more expensive,
and taken longer. Subsequent IM rationalization
remained an important priority for both JDI and
Wipro.
Lesson 3: Assess the Providers Knowledge-
Transfer Capabilities as Part of the Selection
Process. A well-developed, disciplined methodology
to drive the knowledge-transfer process is necessary,
especially when the global delivery model is usedfor IM outsourcing. The required knowledge needs
to be transferred to the providers employees as
swiftly and comprehensively as possible for the
global delivery model to succeed to its maximum
potential. It is thus critical that as organizations
solicit bids for IM outsourcing engagements, they
gain a good understanding of the nature and viability
of the providers knowledge-transfer strategy,
methodologies, and supporting tools. In particular, we
strongly emphasize the need for reference checks with
23 See Lam, A. Embedded Firms, Embedded Knowledge: Problems
of Collaboration and Knowledge Transfer in Global Cooperative
Ventures, Organization Studies (18:6), 1997, pp. 973-996. Lam notes
that the dominant form of knowledge held in organizations, its degree
of tacitness, and the way in which it is structured can vary considerably
between rms in different societal settings. The ways in which such
knowledge is used and transmitted have contributed to project failures
and weakened the technological relationship between the partner rms
over time.
24 Ross, J. W., Weill, P., and Robinson, D. Enterprise Architecture
as Strategy: Creating a Foundation for Business Execution, Harvard
Business School Press, Boston, MA, 2006.
prior clients to drill down on the nature and success of
the providers knowledge-transfer processes.
Wipro had developed a comprehensive knowledge-
transfer methodology that was supported by a range
of knowledge-management tools and practicese.g.,
numerous well-dened knowledge-documentation
templates for scripting purposes. A providers
experience in IM outsourcing, particularly withinfrastructures of a similar scope and conguration as
the clients, is also important for effective knowledge
transfer.25 Although Wipro had considerable
experience of outsourcing engagements involving
each of JDIs technology towers, it needed to engage
in signicant learning to support JDIs complex,
globally distributed infrastructure.
To support the evaluation of capabilities in this area,
client rms should develop scorecards that cover
the major issues involved in knowledge transfer. For
example, the scorecards can be used to assess whether
the provider has:
A phased knowledge-transfer process.
A broad variety of data-encoding templates
usable with explicit, implicit, and tacit
knowledge.
A broad variety of knowledge-transfer
techniques.
Methods for transferring knowledge from
its knowledge-transfer teams to its remote/
offshore centers, systems, and staffs.
Extensive prior IM outsourcing experiences,
especially in similar engagements.
Lesson 4: Help Potential Providers to Understand
the Complexity of Your Infrastructure as Part
of the RFP Process. Providers responding to the
initial RFP need to acquire sufcient knowledge
of a prospective clients infrastructure so they
can adequately assess its complexity. In the JDI-
Wipro case, there were some delays in transitioning
IM responsibilities from JDI to Wipro because
the complexity of JDIs infrastructure had been
underestimated. This not only adversely affected theearly protability of the engagement for Wipro, but
also delayed the ow of benets to JDI. It is thus
critical that an organization soliciting bids from IM
25 See Dibbern, J., Winkler, J., and Heinzl. A. Explaining Variations
in Client Extra Costs Between Software Projects Offshored to India,
MIS Quarterly (32), 2008. This article discusses how a providers
absorptive capacity to assimilate the clients knowledge quickly
is enhanced by having prior experiences that are similar to that of the
clients situation.
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service providers, if it has not already done so, invest
in a concerted effort to document and describe the
complexity of its IT architecture, accuracy, and age of
infrastructure assets and maturity of its IM practices.
This knowledge should be made available to potential
providers at the beginning of the RFP process. By
making accurate and complete information available
to providers, organizations will likely receive more
realistic and thorough proposals. And, perhaps evenmore important, better proposals should increase the
likelihood of a subsequent smoothly functioning and
successful outsourcing engagement with the selected
provider.
Post-contract Activities
Lesson 5: Apply a Visible Phased Approach
for Managing Knowledge Transfer and IM
Transfer. JDI used a very visible phased approach
for transferring IM knowledge to Wipro. Each phase
at each site followed a well-dened plan with clear
goals. This visibility increased the ability of JDI
and Wipro to monitor and control the knowledge-
transfer process, to assure consistency in the
conduct of knowledge transfer, and to adjust the
entire work schedule in a timely, as-needed manner.
The progression of learning enabled by Wipros
knowledge-transfer methodology also proved effective
in developing the knowledge of Wipros employees on
how to manage JDIs infrastructure. It also equipped
them with actual experiences in IM operations and
management prior to assuming full responsibility for
these activities.
In addition to the phased knowledge-transfer process
that occurred at each site, there was a phased transfer
of IM responsibilities to Wipro: only a few sites were
transitioned at any point in time. The priority given to
transitioning a site was determined by the complexity
of the sites infrastructure, with more complex
sites given higher priority and transitioned earlier.
This provided an early window into the viability of
Wipros knowledge-transfer methodology. JDI strove
to improve the transfer of sites transitioned later by
learning from the earlier experiences. Beginning with
the most complex rst was particularly important atJDI due to core ERP applications being centralized
in the data centers. Understanding the interactions
between local sites and the main data centers was
therefore important in supporting the needs of other
sites.
Besides the priority given to complex sites, the use
of a phased approach to transitioning sites proved
benecial. JDIs experience shows that even with due
diligence in investigating the providers knowledge-
transfer capabilities, adjustments in the knowledge-
transfer methodology are likely to be requiredand
the ability to make revisions during the transition
depends on using a phased approach. As JDI and
Wipro gained experience with the knowledge-
transfer process at the early sites, they made needed
adjustments to these processes (e.g., incorporating
rich contextual knowledge, as mentioned earlier).They also recognized how and when the methodology
should be adapted to best t the requirements of a
particular site. As later sites were transitioned, the
enhanced knowledge transfer-processes were applied
along with the IM and business context knowledge
that had been gained from the earlier transitions.
Lesson 6: Use Synchronous (Physical and Virtual)
Meetings to Understand Complex Problems. It is
critical for globally distributed IM support teams to
share and integrate the knowledge of team members
when resolving complex, cross-tower problems.
Usually, teams of specialists share and integrate their
knowledge through commonly understood roles
and interactions established through training and
constant repetition.26 Prior to the IM outsourcing
engagement with Wipro, JDIs IM personnel worked
in close physical proximity to others who were
responsible for distinct technology towers, enabling
them to easily interact with one another. JDIs IM
employees therefore gained some expertise outside
their own technical specialization and were plugged
into what was happening within the other towers.
When a complex problem arose, these employees
tended to know who knew what and were usually
able to quickly bring together the relevant specialists
to integrate their knowledge to resolve the problem.
Since complex infrastructure problems typically
require this kind of knowledge sharing, virtual
meetings need to replace physical ones as part of
a providers capabilities for resolving complex
problems.
Lesson 7: Ensure Employees are Retained
Until Knowledge has been Transferred. As IM
responsibilities transition to an offshore provider, the
clients IM employees are typically let go. A lessonfrom the JDI-Wipro experience is to ensure that
these employees are not lost before the knowledge-
transfer tasks have been completed. Although it is
not always possible to know the complexity and time
26 Grant, R. M., op. cit., 1996.Grant, R. M., op. cit., 1996.
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Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
requirements of a given knowledge-transfer task,27
employees termination dates should be based on
estimates of transition dates jointly developed by
the provider and the client. Termination dates should
also be supported by well-thought-out plans for
the completion of knowledge transfer. Since some
employees with needed knowledge may leave earlier
than anticipated, alternate knowledge sources should
also be identied early enough in the site-transitionplanning so that unanticipated departures do not result
in extended delays in knowledge transfer.
Lesson 8: Prepare Both To-Be-Retained IM
Employees and Business Users for the New IM
Environment. Most of JDIs change-management
efforts focused on IM employees who would be let
go, with far less attention given to the to-be-retained
IM employees or to business users. Retained IM
employees need to be included in change-management
efforts through such means as timely communication
about their new roles, preparation and training for
their new positions, and counseling to help the
survivors cope with the stress of downsizing.
Business users also need to be prepared for changes
in how the IT infrastructure will be supported.
Wipro overcame some of the initial problems by
providing information forums for business users.
These groups also proved invaluable for obtaining on-
going feedback from business users on how the work
being done by Wipro (or the subcontractor) could be
improved.
CONCLUSION
We expect that many organizations, driven by ever-
increasing pressures to simultaneously reduce IT
costs and enhance IT service levels, will consider
moving to IM outsourcing arrangements similar to
the JDI-Wipro engagement described in this article.
Our analysis of this case has identied key actions for
client organizations and key capabilities of IM service
providers that help to ensure IM offshore outsourcing
engagements provide added value for both the client
and the provider.
27 A similar problem was encountered by Reuters when it sourced
nancial services from its captive delivery center in India. Reuters
concluded that subject-area experts needed to stay on until the
performance of the captive center had stabilized. Terminating/
transferring these experts prior to stabilization resulted in higher-
than-expected costs and delays in completing knowledge transfer. For
more information, see: Lacity, M. and Fox, T. Creating Global Shared
Services: Lessons from Reuters,MIS Quarterly Executive (7:1), 2008,
pp. 17-32.
APPENDIX A: RESEARCH
METHODOLOGY
We conducted structured interviews with executives,
IT architects, and project managers from both JDI and
Wipro involved with the IM outsourcing engagement.
Interviewee titles and interview counts are given in
the table below. To enhance contextual understanding
of these interviews, we obtained and examined otherdata sources (company brochures, website material,
contract and service-level agreements, network design
diagrams, etc.). Members of the research team also
visited JDIs IT operations facilities in Sturtevant,
Wisconsin and Wipros Global Command Center in
Chennai, India. All researchers contributed equally to
this study.
Given that our focus for this paper is knowledge-
transfer issues for IM, during the interview process,
we asked about the impact of a client rm engaging
in outsourcing both IM and application developmentto a single provder. At JDI, the groups that supported
application development and IM prior to the Wipro
engagement operated relatively independently of
each other. These groups were replaced by similarly
distinct sub-units within Wipro after the transition. No
particular challenges were reported by JDI managers,
but Wipro managers did indicate two potential
benets from having a single provider take on both
IM and application development. First, using a single
provider eliminates disputes that can arise between
providers. Second, there are opportunities for a single
provider to introduce improvements that result fromcomplementary changes in both areas. The only caveat
we would add to these responses is that it may have
been too early in the outsourcing engagements to have
encountered any instances where nger-pointing was
avoided or where synergistic improvements were
introduced.
APPENDIX B: OVERVIEW OF
REMOTE ADMINISTRATION AT JDI
Remote administration of JDIs infrastructure is
accomplished by setting up alert tools on servers and
other devices to monitor, query, collect, and forward
data on status, events, and performance to one of
Wipros Global Command Centers. Once problems are
diagnosed, Wipro personnel at these centers remotely
initiate actions to resolve the problem. Theoretically,
any problem that does not require physical access to
equipment can be resolved remotely.
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Hawk et al. / Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
The gure below depicts in more detail how remote
administration is handled. Components at JDI
locations are monitored by a tool called NAGIOS
(an open source host and network monitoring
program) that sends collected data to one of Wipros
offshore delivery centers, where it is processed by
Remedy (a help desk tool from BMC software),
which manages the resolution of detected problems.
Remedy generates a ticket that is given to an offshore
administrator responsible for the technology tower
associated with a detected problem. Once a problem
is diagnosed, the administrator remotely accesses
the identied device to resolve the detected problem.
While Wipro has the capability to remotely detect
and diagnose problems via the VPN and MPLS
Client and Vendor Interviews
Interviewee Title No. of
Interviewees
No. of
Interviews
With JDI
Employees
CIO 1 2
Former tower leads (now architects) 3 6
Contract oversight manager 1 2
Lead manager for vendor selection and transitionplanning 1 2
Director of architecture 1 2
Assistant director of North America operations 1 2
Non-IT managers (Business users) 4 4
Total 12 20
With Wipro
Personnel
Manager of Global Command Center 1 1
Manager of Chennai delivery center 1 1
Senior and mid-level managers in the delivery centers in
India
4 5
Senior relationship manager (formerly the onsitedelivery manager at JDI)
1 1
Total 7 8
Remote IM Administration
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Overcoming Knowledge-Transfer Barriers in Infrastructure Management Outsourcing
links, coordination is typically required with telecom
providers to resolve WAN connectivity problems.
Almost all networked devices, such as routers
and PCs, can be remotely administered using the
connection provided by their network interface
cards. Servers are additionally congured with RILO
(Remote Insight Lights-Out) cards to enhance remote-
administration capabilities. For example, if a serversoperating system malfunctions, RILO can be used to
remotely turn the server off and back on. Just about
the only thing that cannot be done remotely with
RILO-equipped servers is to open them up to replace
components.
ABOUT THE AUTHORS
Stephen Hawk
Stephen Hawk ([email protected]) is Professor of
MIS in the School of Business and Technology
at the University of Wisconsin-Parkside. Hisrecent interests focus on offshore outsourcing, IT
workforce development, and the Russian software
outsourcing industry. He has published in MIS
Quarterly Executive, Decision Sciences, Information
Systems Frontiers, Electronic Commerce Research,
Journal of Business Ethics, Journal of Information
Technology Education, and Information Technology
for Development. His Ph.D. is from the University of
Wisconsin-Madison.
Weijun Zheng
Weijun Zheng ([email protected]) is AssistantProfessor of MIS in the School of Business and
Technology at the University of Wisconsin-Parkside.
His recent research interests include the strategy,
design, and impacts of electronic markets on industry
value chains, offshore outsourcing management,
and online reputation systems. He has published in
MIS Quarterly, Information System and e-Business
Management, and Communications of International
Information Management Association. He holds a
Ph.D. from the University of Oklahoma and a Ph.D.
from Shanghai Jiaotong University.
Robert W. Zmud
Zmud ([email protected]) is Professor, Michael
F. Price Chair in MIS, and George Lynn Cross
Research Professor in the Division of MIS, Michael
F. Price College of Business at the University of
Oklahoma. His research interests focus on the
organizational impacts of information technology
and the management, implementation, and diffusion
of information technology. He is currently a senior
editor with Information Systems Research and MIS
Quarterly Executive, and on the editorial boards of
Academy of Management Review and Information &
Organization. Previously, he was Research Director
for SIMs Advanced Practices Council. He is a fellow
of both AIS and DSI and is a recipient of AISs LEO
Award. He holds a Ph.D. from the University of
Arizona and an M.S. from MIT.
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