Contracting on project time in Knowledge Process outsourcing

Abstract

Knowledge Process outsourcing enjoys the rapidest development in recent decades. Based on exogenous quality performance of KPO, we establish a theoretical model for optimal project time of outsourcing. we show that enough time should be allocated inside for follow-up knowledge assimilation and integration particularly when they can bring out significantly knowledge gain In comparing between risk-neutrality and risk-averseness of the client, we find that the risk-averseness of the client will decrease its profit, generally extend the optimal project time and shorten knowledge integration phase, and even sometimes it can transform the outsourcing decisions.