The Use of Knowledge Value Added to Weigh the Performance of Information Technology Outsourcing

In order to obtain the advantageous position in the environment with keen competition, information technology outsourcing is one of the models that the enterprises usually adopt; generally, the enterprises also believe that information technology outsourcing is the best method to save the cost and lower the overall expenditure. In the previous studies, there are not many related literatures or studies that would confer each of the procedures after information technology outsourcing, and whether there is any change on its knowledge amount and rate of return. Therefore, this study uses knowledge value added (KVA), which is addressed by Housel & Bell, to quantify the knowledge that is contained in each procedure before and after information technology outsourcing, and then the differences are being compared in order to regard as the performance assessment of information technology outsourcing. The learning time and procedure description of KVA are used for the estimation of knowledge amount within the procedures, where in-depth interviews are carried out with three listed companies and their public financial statements are used to assist with the cost analysis, so as to obtain every department´s KVA value, and return of knowledge (ROK) can then be obtained. The result of the study found that besides cost saving and lowering of the overall expenditure, the information technology outsourcing can gradually raise the knowledge amount and rate of return that are included in each procedure year by year with regard to the enterprises.