Orchestration of a Smooth IT Outsourcing Projects Transition to a New Vendor



How to ensure smooth knowledge transfer in IT outsourcing? We share our tips for the effective project transition when switching a vendor. They are backed by our experience in exchanging project and product knowledge with a number of companies we've worked with. If you are thinking about moving to another vendor, but knowledge transfer issues hold you back, here come our recommendations for successful knowledge transfer in IT outsourcing.


When enterprises are trying to outsource increasing parts of their business to service providers, they are looking beyond cost reduction, efficient delivery, and process standardization. The emphasis shifts to value-added services such as analytical capabilities, access to better talent and technology, continuous process improvements, re-engineering, and innovation. Therefore, service providers are viewed as strategic IT partners who can bring in world-class service standards, automate parts of the business, and enhance current capacity to fuel fast-growing business needs.


So when contracts are up for renewal, enterprises look to switch service providers to derive better value for the money spent, an improved lifecycle of IT services, and better customer satisfaction. However, the process of transition is not necessarily smooth; some of the challenges that enterprises face while making these switchovers include – the outgoing team’s lack of cooperation in sharing knowledge, incoherent information transferred to the new team, and the significant time taken to make the transition.


Why is managing transition important?


With businesses being under constant pressure to maintain profitability, service providers are expected to do more in less time and for less money.

The service provider is also expected to align with the company’s strategy and processes. This is a significant task considering today’s environment where many businesses have multi-sourcing agreements, with different parts of the organization being outsourced to different providers either based on best-of-breed solutions or as a means of diversifying risk. Those

that have a global footprint might have sourcing contracts that span geographies and/or functions. This not only adds complexity but also requires good governance mechanisms to mitigate the risk of business disruption.


Therefore transition usually is the most challenging part of any IT outsourcing engagement and assumes mission-critical significance, particularly if there is resistance from within, due to compressed timelines and lack of information. The transition is also the yardstick by which the

client-provider relationship is initially measured. Problems early on could risk business disruption and erode confidence in the new provider’s abilities, which could further lead to more issues. On the other hand, successful transitions build stable relationships and result in better business outcomes for both the enterprise and provider in the long run.


Some of the challenges that enterprises can expect during the transition include:

  • Insufficient information

  • Absence of knowledge sharing

  • Lack of planning

  • Timeline pressures

  • Lack of people management

Knowledge transfer


We would like to focus more in this article on knowledge transfer as it presents most of the challenges during the transition process. Put simply, unshared knowledge costs money. Knowledge loss could result in lots of organizational waste when the whole process gets reworked from scratch. Having a robust knowledge transfer plan could make the whole transition journey easier and safer.


Much of the project knowledge can be documented and everyone can take benefit from it i.e. available in the form of books, figures, diagrams, and manuals, however, the most valuable knowledge is a tacit one that is embedded in human minds and cannot be documented (e.g. how to manage a software project, decision making, etc.). Further, Tacit knowledge based on a person’s experience, by contrast, is the most hard-to-transfer asset.

According to the Panopto Workplace Knowledge and Productivity Report, 51% of the average employee's workplace knowledge comes from experience.

Understanding the critical elements of a successful knowledge transfer process is key to its success. It is our team’s experience that a detailed analysis of each area, and the development of tools to assure the correct tools are in place, are key to risk mitigation and overall success.


Plexteq has a proven track record of successfully delivering projects acquired both from clients and their previous vendors. From our experience, we have realized that knowledge transfer fails when it is ad hoc and informal, and it succeeds when it is strategic and methodical. Hence, the guiding principles of effective knowledge transfer we consider as follows:

  • Organizations should take a holistic approach to knowledge transfer that considers such factors as technology, generational differences, cultural diversity, and learning styles.

  • One size does not fit all - each organization will have unique needs and require unique solutions.

  • Knowledge transfer should be timely, relevant, and efficient.

  • Givers and receivers of knowledge should be involved in every step of the knowledge transfer process.

  • Communication is the key to effective knowledge transfer.

The key steps to the knowledge transfer process are shown and detailed below.


Not sure about how to build a knowledge transfer plan in your particular case? See if we can help you. Contact Us.

Step 1. Define Measures for a Smooth Transition Process.

To facilitate a proper knowledge transfer:

  1. Retain key incumbent personnel or incentivize them to stay until the transition is complete to ensure knowledge retention in critical areas.

  2. Encourage teams to use templates, questionnaires, best practices, and checklists

To accelerate knowledge acquisition and mitigate potential risks:

  • Use Knowledge Acquisition templates

  • Use checklists to reduce human errors, people dependency and ensure consistency

  • Establish best practices and standardize processes

  • Identify critical risks (Risk Analysis)

  • Shadow key personnel to learn and document job function or tacit knowledge

  • Prepare Standard Operating Procedures documentation

  • Define acceptance criteria to sign off on knowledge transfer

To understand current processes, workflows, infrastructure, business, and technical complexity:

  • Infrastructure and application maps

  • Business primer training or workshops

  • Regular dip stick surveys

Perform checks and balances, or transition toll gates such as:

  • Standard Operating Procedures (SOP) documentation review

  • Work Instruction review and sign-off

  • Architecture review and sign-off

Step 2. Identify Essential Knowledge.

Knowledge does not exist in a vacuum. It must be defined in terms of its context, impact, application and contact information, and it should be prioritized based on the level of urgency in the Knowledge Transfer Plan. Through working sessions with all roles involved in the knowledge transfer process, the essential knowledge to be transferred will be identified.


There are usually several levels of the knowledge that requires the highest attention:

  • organizational level

  • team level

  • individual level

The organizational level may include the following documents:

  • Sensitive data transition

  • Information on source code ownership

  • Product Regulatory Compliance (if relevant)

  • A Non-Disclosure Agreement (if relevant)

  • Partnership termination agreement with a previous vendor (if relevant)

The team level may include the following knowledge areas:

  • Application:

  • Application source code

  • Automation tests source code

  • Description of key data flows

  • Description of key algorithms

  • Internal processes and workflows:

  • Deployment guidelines, system configuration and installation, operating instructions, troubleshooting, changelog, and bug tracker data

  • Software development workflow

  • Branching strategy

  • Software development tools and techniques

  • CI/CD practices

  • Access to the systems used team-wide:

  • Access to the existing environment and third-party systems

  • Documents:

  • Description of business requirements

  • Project roadmap

  • Software architecture documentation

  • Database structure design

  • Design files: mockups, graphics

  • User stories

  • QA documentation: test plans, test cases

The individual level is the most important part of the knowledge transfer process. A big part of the knowledge is the code itself. But it’s one thing to know what the code does and it’s another thing to understand the considerations and logic behind its design. One-on-one meetings and tech talks between software engineers, DevOps, and architects are the best way to understand the logic behind the code and established practices when moving from one vendor to another.


Step 3. Identify Who Has the Knowledge and to Whom the Knowledge Should be Transferred.

Most successful transfer efforts actively involve both the source of the knowledge, the giver, and the person or persons receiving the knowledge, the receiver. This process of identifying each is performed through the development of a knowledge base matrix, generated through multi-group workshops, which will identify both where the knowledge to be transferred resides, as well as where it will be transferred to.


For example, on the organizational level, it might be necessary to speak to a Delivery Manager and representatives from the engagement, legal, and finance departments. On the team level, it is essential to contact a CTO, a project manager, a Scrum Master, etc. And when it comes to a knowledge transfer from an expert to an expert, these are usually direct meetings between QA engineers, UX/UI specialists, software developers, DevOps, business analysts, software architects, etc.


Step 4. Select Knowledge Transfer Tools and Methods to Capture and Transfer the Knowledge.

Important knowledge should be captured and properly stored. Deciding on the desired outcome and clarifying expectations for the knowledge transfer will not only help in selecting the best tools to use but will also establish key objectives (i.e., learning assignments, milestones, etc.).

There is a variety of different knowledge transfer methods, and here we outline those that prove to be the most effective for knowledge transfer in IT outsourcing.

  • Meetings

  • Documentation

  • After Action Reviews

  • Collaboration, i.e. pair programming

  • Process Mapping / Flowcharting

  • On-site training

  • Webinar

Step 5. Monitor and evaluate the results against success criteria.

All knowledge transfer activities need to be monitored and evaluated to determine success rates, through the established documentation and communication plan, and allow for any modifications to be made as quickly as possible to support risk mitigation.


Criteria are usually dependent on project type and complexity. Though, several real-world examples are:

  • Team proficiency in the business domain, ability to speak with business on their language

  • Releasing the first version through the adopted release lifecycle

  • Ability to deploy releases and troubleshoot functional, and non-functional issues independently

  • Getting to a projected development velocity

Example of a Knowledge Transfer Process

Below, you will find a plan for knowledge transfer in IT outsourcing projects based on the lessons we learned through years of cooperation with clients across the globe.


Overall Transition Timeline



Software Project Knowledge Transition Flow


Wrap Up


When an enterprise switches service providers to derive better value, the transition from incumbent to incoming provider can become very challenging. The first step is in selecting the optimal service provider starting with evaluating if the service provider has the right approach, the right set of tools, and the framework to enable a smooth transition. Further, sufficient checks and balances combined with a well-defined transition plan involving the capture and retention of existing knowledge, good governance mechanisms, and a continuous improvement mindset, can turn a hostile transition into a smooth one.


In Plexteq, we have been refining our knowledge transfer plan for more than 8 years, since the partnership with our first clients. It has been tested over time and our clients report its effectiveness as it meets their success criteria. The knowledge transfer plan is an integral part of cooperation with the majority of our clients, including AVI-SPL, Axcient, TeeVid, and others.


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