Knowledge management issues in outsourcing

Information transfer and knowledge sharing beyond one's organizational boundary in an extended enterprise model will be an inevitable trend forced by the global scale competition. This paper focuses on the emergent knowledge management (KM) issues arising from the trend of broadening the scope of outsourcing in the high-technology design and manufacturing industry. There is an existent ecosystem of companies where each firm plays one or more parts in the value chain through strategic outsourcing arrangements. Such arrangements are dynamic in nature where the level, role and scope of outsourced activities are shifting and being rearranged involving higher-order knowledge and technology applications. With outsourcing now entering a new phase of maturity with the emergence of "virtual enterprises", this paper assesses how partnering companies can best retain, utilize and create knowledge, enhance their respective corporate memory and core capabilities, and develop a culture conducive to cross-organizational knowledge sharing while performing the outsourcing processes. A contemporary case of Hewlett Packard's outsourcing practices with a local contract manufacturer, Venture Corp Ltd is discussed as an illustrative example