Maintaining knowledge outside the firm

Morten B. Høstrup

Student thesis: Master thesis


TDC has been outsourcing IT services in full since 2005 and in a market where the changes in IT are happening rapidly, the impact of the strategy made by IT management are becoming apparent, and it is important to ensure the valuable knowledge of the IT systems are kept within the boundaries of the organisation. Therefore, I investigate how TDC try to keep knowledge intact when changing outsourcing vendor. I look at two key applications in the company, one that drives the Intranet - called Medarbejderportalen - and the other which is the TDC Contract Management system, a system to store all TDC contracts. I use transaction cost theory combined with a theory of the memory organisation in order to investigate how knowledge is handled and how this handling of knowledge affects the transaction cost of the outsourcing. I interviewed key stakeholders related to the two applications and gathered documents describing the applications, furthermore, I relied on my own experience from working as the responsible for Medarbejderportalen for two years. Through my interviews I find an overall strategy to capture knowledge of all applications in TDC, but in both the cases I investigate that specific strategy has no impact. In the Contract Management case there is no central initiative to capture the knowledge, and in the Medarbejderportalen there is a local initiative to rebuild knowledge after a switch of vendors. I find that the difference between the two cases is both a matter of how the development teams interact but also the trust between developer and the business line application owner. I build a guide with which to assess the transaction cost of an outsourced application taking knowledge into account, in an effort to create a way to make it scalable dependent upon the business criticality of the application. This makes it possible to gain an overview of the steps involved in building a sustainable knowledge platform to ensure a knowledge strategy suited to the application at hand. This is no wonder tool to end all tools, but a guide on how to do it and become able to make a decision based on knowledge of consequences of the priorities involved in building a knowledge strategy. In conclusion, I argue the cost of development increases significantly with the level of complexity surrounding an application and, as the level of complexity increases the harder it is to obtain application relevant knowledge.

EducationsMSc in Business Administration and Information Systems, (Graduate Programme) Final Thesis
Publication date2013
Number of pages96