Subject: Information System Science
Title: Quantifying the Intangible: A Design Science Approach Measuring and Mitigating Tacit Knowledge Loss in IT Outsourcing and Managed Service Providers.
Abstract:
Tacit knowledge is knowledge that stems from experiential and judgement-based know-how, which is difficult to articulate or codify. This knowledge plays a critical role in the continuity, quality, and governance of IT operations. During IT outsourcing or Managed Service Provider (MSP) transitions, this tacit knowledge is particularly vulnerable to loss and/or erosion which increases the operational risk, knowledge asymmetry and vendor lock-in. Despite its strategic importance, organizations currently lack the structure to assess or manage tacit knowledge loss, relying on indirect or subjective indicators such as service disruptions or cost metrics.
This thesis addresses the gap by adopting the Design Science Research (DSR) methodology, developing and evaluating the artifact which approximates the tacit knowledge loss during IT outsourcing and/or MSP transitions. This research draws on knowledge management literature, IT outsourcing governance, and empirical insights from Technology Risk, IT Auditors, Consultants, Clients-side Management and Vendor context. Triangulation was used to address both quantitative and qualitative data collection including an exploratory survey, semi-structured interviews, secondary data analysis, and a 2-round Delphi Study with human experts identifying, validating, and refining measurable indicators within the Tacit Knowledge Loss Quantification Model (TKLQM) assessment/dashboard.
The result of this research is an artifact “TKLQM” which approximates using observable indicator insights such as undocumented routines, expert dependency, incomplete knowledge transfer, and knowledge ownership weakness and its importance in weights per scenario/story/engagement. These indicators are aggregated into a composite score that provides an early-warning signal of tacit knowledge exposure and vendor dependency risk. This artifact was evaluated through expert-based Delphi validation and scenariobased demonstration, which confirmed usability and usefulness for IT Auditors and consultants in assessing tacit knowledge loss risk, while enabling client organizations to take ownership and recommended actions.
It demonstrated that tacit knowledge still can’t be measured directly, but the loss or erosion of can be approximated through a structured and transparent artifact such as the TKLQM. Practically, it supports organizations in improving transition readiness, improves outsourcing governance, and mitigating long-term vendor lock-in.
Keywords: Tacit Knowledge, Knowledge Transfer, IT Outsourcing, Managed Service Providers (MSP), Quantification Model, Knowledge Asymmetry, Vendor Lock-In, Knowledge Asymmetry.