System Dynamics Approach to IT/IS Outsourcing in the context of the Perspective of Knowledge Management

In recent years, due to a lack of expertise, many organizations have been devoting large portions of their budget to outsourcing. Outsourcing is now often regarded as a solution for all problems. However, the lack of clear understanding of the effectiveness of outsourcing could lead to many problems in organizations even though outsourcing is known to provide advantages to some organizations. Moreover, outsourcing could have a negative effect on knowledge management in some aspects. There have been and continue to be numerous studies into outsourcing; however, their findings primarily relate to cost reduction in short-term. Regardless of increasing demands on outsourcing and the importance of knowledge management, little research has focused on decision-making structure from knowledge management perspective. This paper attempted to quickly identify promising movements with potentially significant effects on IT/IS outsourcing.