Learning Effects of Domain and Technology Knowledge in Outsourced Information Systems Development : An Empirical Study

This study examines learning effects (i.e., the effects of prior experience) in outsourced information systems development (ISD). Outsourced ISD is characterized by disparate tasks, teams, customers, and levels of project complexity across projects. These features challenge the understanding of how learning effects occur in the outsourced ISD context. Drawing upon the theory of transfer of learning, this study examines how outsourced ISD project teams learn and under what conditions they learn better or worse. We find that ISD project teams' experience in prior projects is transferred to performance gains in the current ISD project when the prior and current projects share the same domain or technology knowledge elements, domain and technology being the most essential knowledge types for ISD. Moreover, we find that these learning effects become stronger or weaker depending on the extent to which ISD project teams are familiar with the customers and the extent to which ISD projects are complex in its task and team. The study makes significant contributions to the outsourced ISD literature on learning effects, the roles of domain and technology knowledge, customer experience, and ISD project complexity, as well as to the general organizational learning literature. It also provides important managerial insights into practical human resource concerns such as project staffing and knowledge acquisition for outsourced ISD organizations