Tacit Knowledge & Soft Skill Creation in the Indian ITES Industry

Eric EideUniversity of MichiganWork in progress paper

Abstract:

Recently, Indian firms have found success in moving into “knowledge-intensive” professional

services, such as teleradiology and sophisticated data analytics in the medical and financial

industries respectively. These knowledge intensive services are fruitful sites at which to study

firm knowledge strategies because they require highly specialized skills. The skill requirements

needed to deliver these services coupled with the skill deficiencies produced by the educational

system have prompted firms to invest heavily in skills development internally. Yet, these

investments are not only in developing explicit technical or industry specific knowledge, but also

tacit technical “know-how” and interpersonal communication skills through “soft” skill training,

which are crucial skills requirements in offshore service delivery. This contribution of this paper

is to highlight the limits of explicit knowledge and the centrality of tacit knowledge and soft

skills for an ITES industry focused on service exports. This paper is based upon multiple case

study design research project focuses on four detailed cases of independent Indian firms’

strategies to create firm knowledge. The paper draws upon interviews with firm managers,

workers, leaders of trade associations, government officials, and other industry insiders

conducted during 14 months of field research in India conducted between 2006 and 2009.

Key Words: skills, knowledge, industry development

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Introduction

Knowledge has become the most important resource in post-industrial society. While

some critics classify knowledge as a “fictitious commodity” (Jessop, 2007), nonetheless

knowledge creation, capture, and dissemination have become increasingly important to economic

activity. Knowledge is crucial for a service-based economy (Bell, 1973) and for economic

development (Amsden, 2001; Drucker, 1993; Gibbons, et al., 1994; Stehr, 1994). Alice Amsden

(2001) elaborated the role of knowledge in development by specifying the building of

knowledge-based assets, which are technological and managerial in nature, as the central

ingredients to development in high technology manufacturing. One of the challenges working

with knowledge generally and knowledge-based assets specifically, however, is their tacit nature.

Scholarly and practical attention tends to focus on the more visible and easily articulated

aspects of knowledge, rather than the less visible and harder to articulate aspects. Explicit

knowledge is easily codified into words and numbers. Tacit knowledge, on the other hand, is

more difficult to express with words and numbers. Central to this observation is Polanyi’s

declaration that “we can know more than we can tell” (Polanyi, 1967, p. 4). Subsequent scholars

have further differentiated tacit knowledge along two dimensions: the technical dimension,

which includes hard to identify skills or “know-how,” and a cognitive dimension, which consists

of “schemata, mental models, beliefs, and perceptions” that we take for granted (Nonaka &

Takeuchi, 1995, p. 8). Building upon this tacit knowledge distinction, this paper will further

theorize the cognitive dimension of tacit knowledge in the delivery of ITES serves between two

cultures by analyzing firm strategies that build technical “know-how” and intercultural “soft”

skills. The importance of soft skills on success in the labor market have been highlighted by

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scholars (Moss & Tilly, 1996), but fewer studies focus on these skills in an international context

(Otis, 2008).

While scholars increasingly recognize the importance of tacit knowledge in industry

development (Amsden, 2001) and firm performance in manufacturing (Amsden, 2001; Nonaka

& Takeuchi, 1995), fewer scholars have analyzed the distinct challenges of transferring and

disseminating tacit knowledge in an increasingly important global development sector: IT

enabled services. Services are an important arena to analyze the relationship between tacit

knowledge and industry development for three reasons. First, services have emerged as the

largest and fastest-growing sector in the global economy in the last two decades, providing more

than 60 percent of global output (Banga, 2005). Developed economies tend to have a high

concentration of service employment, however, some developing countries, like their developed

country counterparts, are also becoming service-based economies. Moreover, many services that

can be performed remotely are moving “offshore” from developed economies and to developing

economies. India has become the leading exporter of IT enable services in the developing world

and this industry emerged as India’s fastest growing industry in terms of gross domestic product

(GDP). This has prompted other developing economies (e.g., China, Brazil, Philippines, Poland,

Russia and South Africa) to try to replicate the high growth rates associated with India’s service

export model (Intelligence, 2006). India’s leadership in IT enabled service industry development

suggests it is prescient to turn our analysis of tacit knowledge in services there.

Second, the unique qualities of services hint at the need to master a different set of skills

and capabilities relative to manufacturing. The unique qualities of services suggest that the route

to upgrading will differ from those found in manufacturing and retail. The characteristics that

distinguish services from other types of products are its intangibility, inseparability, variability,

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and perishability (Lievens, Moenaert, & Jegers, 1999; Lovelock & Gummesson, 2004).

Intangibility refers to the inability to see, touch, and feel a service. Instead, services are

experienced through interactions between a service provider and a client. This interaction means

that it is difficult to separate production and consumption of a service. This refers to the

inseparability of services. Services are variable or inconsistent for a couple of reasons. First,

workers are different from each other, which makes the service they provide inconsistent; second

locations may vary and different environments shape services in different ways; and third,

customers themselves vary. All of these factors make services flexible in production, imperfect

in competition, and vary in quality. Perishability in services refers to a lack of inventory. This

means managing capacity and demand are particularly challenging for firms providing services.

Third, services require unique skills relative to those required in manufacturing

industries. Industry development focused on IT enabled services requires a distinct mix of skills

relative to manufacturing industries. Compared to industrial development in manufacturing,

which emphasizes “hard” technical and managerial competence, services require in-depth

industry knowledge and proficiency in “soft” skills. Industry knowledge is specific to an industry

vertical, such as finance or chemicals. This is different than horizontal skills that are transferable

or applicable to variety of industries. Examples may include engineering or accounting skills,

which are used in a variety of industries. In practice, firms require a blending of horizontal and

vertical skills. Skills in services tend to be highly specific to an industry and a specific firm.

“Soft” skills refer to interpersonal communication skills, presentation skills, leadership skills,

norms of business dress, and cultural understanding, which are embedded within forms of tacit

knowledge.

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Firm Case Introduction

The ITES industry itself contains a wide variety of activities that range from fielding

telephone calls to R&D and sophisticated financial modeling (Dossani & Kenney, 2006). To

focus the study, I selected the financial and medical ITES industries based upon their different

propensities to specialize within industries and breadth across industries. Medical services may

contribute to a greater degree of specialized industry learning since these services are niche

products for the health services industry and they require specialized skills, particularly at the

high-skill end. Conversely, financial services tend to be generic and show more potential to

expand in breadth by producing services that are used by multiple industries. The less stringent

professional requirements and employment scalability of the financial services sector, provides a

valuable comparative dimension to medical services, which employ fewer employees in the

Indian ITES sector.

Within each industry the work force may be stratified by skill level. For example, the

financial service industry contains low-skill (i.e. data entry), medium skill (i.e. call centers), and

knowledge intensive services (i.e. data analytics), which are used by a range of industries, while

the medical services industry contains low-skill (i.e. medical transcription services), medium

skill (i.e. diagnostic image manipulation), and knowledge intensive services (i.e. radiology).

This project, however, is focused on the upper skill levels of services because these are most

important if India is going to retain a long-term advantage in services.

Financial services are also one of the most monetarily significant within the service

industry, accounting for 40 percent of the total $4.6 billion gross revenues generated in India’s

service sector (NASSCOM, 2006a). The size of the medical services export industry is more

difficult to measure relative to financial services because there are a number of medical services

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business associations unevenly distributed across the industry. This makes membership data,

which is the primary way of assessing data on these nascent industries, difficult to acquire1.

Medical transcription was one of the first services to be offshored to India in the early 1990s and

the business has grown in revenue to USD 220-240 million (NASSCOM, 2006b). The medical

service industry, however, is significant for theoretical reasons. Radiology is an “extreme” case

of offshoring because of the high degree of tacit knowledge needed in the profession combined

with the potential harm of making mistakes (Levy & Yu, 2006). An important part of

radiological training is the residency, which is an experiential component of medical training that

is overseen by an experienced doctor. This relationship is designed to transmit the knowledge

necessary to diagnose and treat patients, yet is difficult to learn in the classroom setting. The skill

requirements and the risks inherent in the practice of this profession provide insight into the

potential of upgrading into knowledge services, while also demonstrating the potential limits on

high-skill offshore outsourcing.

The firms selected for this study were selected upon their longevity and their market

leadership in the knowledge process outsourcing industry. Infosys and Evalueserve are two firms

specializing in financial services and Teleradiology Solutions and the Global Radiology Centre

(GRC) are two teleradiology firms specializing in radiological services. Infosys, founded in

1981, is one of the top 10 IT and ITES firms in India in terms of revenue and number of

employees and now has over 100,000 employees worldwide ("Top 10 software companies in

India," 2008). While the majority of Infosys’ revenue is derived from its software services line,

the company’s acquisition of leading BPO firm Progeon in 2006 positioned Infosys as a leader in

ITES and later in Knowledge Process Outsourcing (KPO) services. Evalueserve, on the other

1 The National Industrial Classification statistics from the government of India lump most export service activities under a residual

category “Other business activities” (classification number 7499) because these activities are evolving faster than the government can classify them (Ministry of Statistics and Programme Implementation, 2004). As a result, most available statistics come from industry and industry associations themselves.

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hand, was one of the first “pure” Knowledge Process Outsourcing firms and coined the term in

order to differentiate their “knowledge intensive” services from the lower skill level call center

and data entry work that defined early periods of ITES in India. Evalueserve was founded in

2000 and has over 2200 employees working on various service lines, including investment and

patient research. Both firms have a majority of their KPO revenue generated in financial services.

Teleradiology is a relatively small niche service export industry and both Teleradiology

Solutions and the GRC are the longest running firms providing these services from India

(Chandran, 2008). Teleradiology Solutions was founded in 2001 and currently has

approximately 180 employees. The GRC, which is a joint venture between top IT company

Wipro and a Bangalore based hospital, was founded in 2002 and has 22 employees. Evalueserve

and Teleradiology Solutions focus on slightly more specialized services relative to Infosys and

the GRC (see Table 1).

This paper draws upon 95 semi-structured interviews collected during 14 months of field

research in India and the United States conducted between July 2006 and May 2009. In

particular, the paper draws heavily upon interviews conducted across four firm case studies,

although the paper also draws upon primary source documents from trade associations, the

Government of India, newspapers, trade publications and magazines, to compliment and

corroborate interviews data where possible.

Explicit Knowledge and Knowledge Externalization

Firms codify knowledge in order to capture, disseminate, and build upon knowledge

within the organization. This codification process, which transfers tacit knowledge into explicit

knowledge is called “externalization” (Nonaka & Takeuchi, 1995). Firms across industrial

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sectors try to externalize knowledge in order to make it easier to access, while also reducing the

firm’s dependence on specific employees who possess technical “know-how”. However, there

appears to be an even greater externalization impulse for firms in IT enabled services relative to

manufacturing. Extensive externalization of knowledge must occur before a service is

transferred from one country to another. In order to replicate a service, it first needs to be

studied and codified before a parallel process can be replicated in the offshore location. Service

firms may try to take additional steps to codify knowledge in an effort to exert some control over

the intangibility and variability of services. Service firms implement mechanisms that assist in

the rationalization and codification process, such as quality assurance processes and knowledge

management systems. Yet, knowledge gaps, particularly along tacit dimensions, may persist,

despite the knowledge externalization achieved through these mechanisms.

Learning and Sharing Technical “Know-How”

There are aspects of technical “know-how” that are embedded within a given task or

technology and these may be difficult to extract and transfer. In practice, for example,

technology transfer rarely results in analogous capabilities between those possessing the

technology and those who seek to acquire it (Amsden, 2001). This loss of capability is due to the

incomplete specification of technology where knowledge transfer tends to decline as technical

“know-how” becomes increasingly tacit. Although the tacit knowledge for some offshore

services, such as data entry and call center work, tend to be highly externalized and scripted,

other services, such as knowledge intensive services, which require high levels interpretation,

tend to be much more difficult to externalize.

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The interpretation of radiological images and production of three-dimensional (3D)

imagery in teleradiology work is difficult to standardize or explicitly articulate. Teleradiology

3D lab work, which is less skill intensive than reporting final diagnosis of radiological images,

still requires a high degree of interpretation. For example, a business manager working with 3D

imagery called radiology “a very perceptive science” (emphasis added)(Interview 16, GRC,

10/17/07). The manager emphasizes the interpretive element of 3D work, which hinges upon

one’s ability to perceive or distinguish ambiguous abnormalities from initial two-dimensional

image. The supervising radiologist at the GRC elaborated that the proficiency in 3D imagery

requires “aptitude” and the radiology or technologist qualification does not necessarily translate

into the aptitude necessary for the job (Interview 55, GRC, 4/16/08). The required aptitude in 3D

imagery refer to a developed competency that is distinct from the more explicit knowledge a

radiologist or technologist may receive through their more formalized classroom training and

book based learning.

Multiple doctors at the GRC used the metaphor of “art” to help describe the skill and

knowledge requirements required for the production of a quality 3D image in 3D lab work (to

see an example refer to the sample images of 3D imagery in the appendix):

“So apart from the knowledge, it is more like an art. So there are some guys who are

more artistic in giving the images. So it is not only the knowledge that you have, an

element of art is also there . . . . Some, they struggle to create it, for some it is a ‘cake

walk’ so they prefer to stick on to it for a long period of time. Some move out” (Interview

17, Radiologist, GRC, 11/1/07).

Here the artistic skill, or tacit technical “know-how” required to produce a 3D image is described

in opposition to (explicit) knowledge, yet the emphasis is on how crucial the tacit knowledge is

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for job success. According to this radiologist, the workers that are unable to learn these artistic or

tacit components of the work do not stick with the job and leave the firm. The references to art,

rather than science, underscore the interpretive and hard to articulate approach to radiology

service research.

The use of the metaphor of art to describe the attributes and skill requirements of

knowledge intensive services is not unique to radiology. For example, one manager conducting

investment research replied that, “there is no such standard process, it is research. Research is an

art. It is not a science where you follow a process…” (Interview 42, Evalueserve, 2/13/08). This

quote demonstrates the difficulty in completely externalizing tacit aspects of knowledge into

easy to follow scripted steps. While one may possess a general methodology or framework for

research, it is difficult to complicated and interpretative processes such as conducting research

into a strictly followed routine.

Mechanisms that Transmit technical “know-how”

Technical “know-how” in offshore service work is transmitted through interactive

methods for knowledge sharing. Transmission of knowledge may occur between the client and

the service firm, between individual workers and teams inside the service firm itself, and

between firm employees and other individuals located outside a specific firm through networks

that are embedded within a broader community. These mechanisms include a number of less

structured forms such as team interaction, mentorship, knowledge sharing sessions, and the use

of collaborative technologies, such as, internal company discussion boards and “Wikis,” and

industry and community based networks.

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All 4 firms in this study used a combination of methods depending on the stage the

offshore outsourcing relationship was at. In preparation for a transition of a service from the

client site to the offshore firm employees may visit the client location to observe work methods

and meet one-on-one with client employees around specific aspects of a process to learn as much

as possible about the tacit routines that underlie the explicitly articulated aspects of a work

process. BPO firms often use a cost effective “train-the-trainer” approach in transitioning

services. Under this model a small portion of employees visit the client site, document the

client’s work process, and later return to the service delivery site and train the rest of the team.

However, tacit technical “know-how” may “leak” or be lost in transition through this “train-the-

trainer” approach thereby causing potential future problems in the service delivery process. A

manager at Infosys described how knowledge leakage occurs:

“…when somebody is teaching me something as they know [it] … They will probably

disclose 80 percent and that may be unconsciously. There is always that 20 percent that

you may not, we may forget to transfer. Then if I have absorbed, if I have heard 80

percent, chances are [I] absorbed 60 to 70 percent, then I come offshore, I will probably

transfer 50 percent because I have forgotten the rest” (Interview 88, 4/23/09).

The above quote describes how both tacit and explicit information may be lost. To combat this

type of knowledge leakage, some clients, particularly if it is the beginning of a large long-term

relationship, may send employees abroad to train all offshore service workers. Once the service

transition has occurred, firms often use weekly conference calls and daily or weekly email

correspondence with the client as the primary methods of continually transmitting tacit forms of

knowledge. These regular calls are a key way to insure clarification around expectations that

were not clearly articulated in written documents may be addressed.

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Firms themselves may craft a number of strategies to disseminate tacit knowledge

through the firm. Mentorship and team learning are primary routes that help transmit tacit

technical “know-how” within a company. One-on-one mentorship is the primary way tacit

knowledge is disseminated within the small number of employees at the GRC. Larger firms may

rely on presentations alongside mentorship strategies within a functional team. For example,

executives and managers at Evalueserve and Teleradiology Solutions described on-going

presentations that are used to transmit new methodologies, procedures, and innovations to their

team or firm. For example, Evaluserve coordinates and conducts knowledge sharing sessions at

the team level within a specific division, such as “Investment Research.” These presentations,

utilize power point presentations, which contain a combination of words, pictures, animation,

and video, which may help transmit explicit and some forms of tacit knowledge about a given

subject. However, the “Question and Answer” exchange during and at the end of these

presentations help transmit the more tacit technical aspects of a given subject.

Teleradiology Solutions, on the other hand, uses an internal weekly review of “difficult

or interesting cases” to show radiologists at the company the hard to explain aspects of a given

case. The images are projected in an auditorium where radiologists are encouraged to discuss the

varying interpretations they may have in diagnosing the abnormality (Interview 41, Founder,

Teleradiology Solutions, 1/31/08). Projecting the visual image during these sessions permits

people to identify certain areas of interest, often highlighting them with a laser pointer, and then

perhaps contrasting these images with other “normal” cases. The visual highlighting of specific

areas and the comparisons are key approaches in helping doctors understand the uniqueness of an

abnormality that is otherwise difficult to verbalize.

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Finally, networks of people located outside the firm may also serve as a mechanism that

transmits tacit technical “know-how”. The IT and ITES industries are highly networked in

industry hub cities such as Bangalore (Interview 85, Core Committee Member of Bangalore K

Community & Executive at Mindtree, 4/1/09) and these networks facilitate knowledge sharing

amongst its members.

While networks are widely regarded as mechanisms that transmit resources, including

knowledge (Hargadon, 2002; O’Riain, 2000; Owen-Smith & Powell, 2004; Small, 2009),

networks are particularly important in India where larger gaps exist between explicitly

articulated rules and actual routines people follow relative to the United States. According to one

industry executive, Indian workers value, use, and rely on their networks more than U.S. workers

(Interview 85, Executive, Mindtree, 4/1/09). An example of a professional network that has the

expressed goal of sharing industry knowledge and knowledge management strategies is the “K

Community India.” The K Community is an initiative started in 2005 and supported by the

Confederation of Indian Industry (CII), which is an overarching Indian trade association. The

Community currently has 965 members across the country that interact through online discussion

boards ("K Community - India," 2010). Participants can also join regional networks, such as the

“Bangalore K Community,” which contain sub-networks of over a hundred professionals

residing in or around the city of Bangalore, India ("K Community - India," 2010). The benefit of

the regional groups is that members are able to regularly meet face-to-face through knowledge

sharing events and lectures in order to share knowledge and form deeper networks that in turn

help facilitate knowledge transmission and production. The strategies identified above transmit

technical “know-how”, but these same practices may also fail to transmit tacit knowledge that is

cognitive embedded within culture.

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Knowledge Externalization, Culture, and “Soft” Skills

Work output expectations may be explicitly articulated, yet work expectations may not be

sufficiently met. An offshore worker may follow an explicitly articulated procedure specified

and codified through quality assurance procedures or a work methodology, yet the output may

still not meet client expectations. Dissatisfaction with performance may occur because of the

cultural cognitive norms that underlie expectations of work. These components may not be

articulated or transferred, because of their “taken-for-granted” nature within a given (western)

cultural milieu. A VP of a North American multinational company responsible for offshoring

services to India, wrote about the performance problems that may result from cultural difference,

even when work output metrics are meticulously followed:

“The test team is the weakest part of the organization in terms of efficiency and

effectiveness. [The group is characterized by a] very strong focus on metrics (execution

rate, pass rate, etc.) with no real understanding of the impact or what really needs to be

done to report on quality and customer value. . . The biggest obstacle is [a] change in

culture. . . . The rituals are followed religiously, but some of the spirit is lost” (emphasis

added) (personal email correspondence, 11/10/09).

The above quote suggests that even when a team is focuses upon following explicitly articulated

metrics; overall quality and customer satisfaction may suffer. The tacit assumptions that are

embedded in cultural norms are not transmitted along with the explicit metrics. For the workers,

the meaning of “customer value” and how they can work toward achieving it is unclearly

specified, particularly from their cultural location. The quote above simultaneously demonstrates

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the limitations of explicit knowledge, while underlying the centrality of tacit cultural norms that

are embedded in expectations of work in a cross-cultural work context.

Similarly, the way that explicit agreement or disagreement are made across cultures

exemplify cultural tacit challenges in offshore services. In the United States people tend to take

explicitly articulated statements at face value. For example, when a client asks if a specific

service can be implemented by a specific date, and hears “yes,” then that client will reasonably

expect that the service will be implemented by that date. If that date is not met, however, the

client will be upset and believe that they have been deceived or that the vendor did not meet

expectations. For Indians who live in a society that is more culturally sensitive to status

hierarchy, however, it is considered overly direct to tell a superior “no, we cannot meet your

deadline.” When Indian employees are asked a difficult question, they may be evasive, but

tacitly agree with their client in order to avert conflict with a perceived superior. The subtext

communicated by the Indian worker, that the client may fail to pick up on, is “we will try.”

Consistent with these observations, another North American Manager commenting upon his

Indian offshore workers wrote that, “People say ‘yes’ to requests; however it requires constant

follow-up for them to deliver” (Manager of North American multinational, personal email

correspondence, 11/8/09). Failure to meet the client’s explicit deadline may be terms for ending a

relationship or at the very least cautiousness in allowing the offshore team to manage more

critical tasks. This is turn may have a detrimental impact on the future offshoring relationship,

especially as it relates to moving into higher value tasks.

Soft skills and cultural understanding are important skills at any stage of an outsourcing

relationship, but particularly in the early stages of the relationship when services are being

transitioned for the first time. A transition manager at Infosys reported that those employees

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working on transitioning services from one-country to another need industry specific knowledge,

but they should also have good peoples’ skills and “soft” skills (Interview 32, 11/29/07).

Another Infosys manager who was involved with starting up a 300 full time employee project for

a client emphasized the importance of tailoring soft skills training programs to inculcate

interpersonal communication skills and an understanding of what norms are expected in the US

business culture:

“I want . . . [employees] extremely comfortable talking on the phone with the client, I

want them to get attuned to an American accent because the minute they come on the

floor, the day they join me, there is going to be trainers from the US here for the next 8

weeks. They need to be able to understand them. They need to be able to be comfortable

with them and ask the right questions. They need to be able to speak up, for example,

which is a huge issue with lot of Indians” (Interview 88, Director, 4/23/09).

The quote above highlights the difficulty that India workers may have in understanding

American clients, but also the importance of learning to proactively ask questions when

something is unclear. American businesspersons will expect to hear clarifying questions if

employees are unclear about instructions and will not generally look for more tacit cues that

people may not understand the instructions provided.

A related challenge identified by an Evalueserve executive is how to manage the

differing cultures of its own employees working across four global operating centers (India,

China, Chile, and Romania) and the firm’s sales force and their customers based primarily in

American and Europe:

“That’s where it becomes more of a sociological issue and more of an interaction issue

and more of a cultural issue. That is not about processes alone, it is about culture

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understanding, it is about the ‘softer’ side of things . . . . We have people from . . . 75

countries working in the company right now, and forget about India and China versus

Europe and the US where there is huge cultural difference everywhere. Even within the

Central European countries, I mean the way a Swiss will think will be very different from

the way French will think. . . . In 7 years we . . . created a global multinational company.

I mean, you can understand being a sociology student yourself what that means in terms

of cultural challenges that we face” (Interview 41, 2/12/08).

This quote emphasizes the cultural cognitive challenges that offshoring firms may experience not

only with their foreign-based clients, but also with their own employees who are increasingly

globally dispersed. These internal cultural challenges are expected to increase, as “Indian”

service firms increasingly become multinational organizations2.

In order to get employees to better understand communication coming from another

culture, IT enabled service firms across India invest heavily in “soft” skills training. Soft skills

training includes training in three overlapping areas: 1) business skills and etiquette, 2)

communication skills, and 3) learning what is “appropriate” in a client’s business culture. All

four firms profiled in this study offered and emphasized “soft skills” training to provide

employees the tools to reduce cultural cognitive misunderstanding between cultures. Soft skills

include interpersonal communication (via phone, email, face-to-face interaction), presentation

skills, leadership skills, norms of business dress, cultural understanding, which are embedded

within forms of tacit knowledge.

Firms teach business skills and etiquette because most newly hired ITES employees in

India lack work experience. The typical service employee tends to be in their twenties and

2 Leading offshore outsourcing service firms are now outsourcing to new locations that have lower costs or specific hard to find capabilities, such as language specialization (Giridharadas, 2007).

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relatively inexperienced in the workplace. Even workers who recently completed graduate

training in India, which is particularly common in knowledge intensive services, tend to lack

work experience relative to their counterparts in the United States. This is because Indians do not

usually work in the workforce between completing their undergraduate course work and starting

their graduate programs. In the U.S. students often work an average of 2 to 4 years before

returning to graduate school. These differences mean that Indian graduate students receive little

exposure to the workforce environment prior to starting work and have they have fewer

opportunities to learn western cultural expectations as residents in India. For this reason, a lot of

the soft skills trainings try to teach business socialization skills of some kind. At the Infosys’

Leadership Institute, which is a formal part of new hire training, for example, employees are

taught business fundamentals, such as, how to work in a team, e-mail etiquette, and other

corporate practices (Interview 66, Group Leader, 12/15/08).

Many employees working in knowledge intensive services require some English

language practice, particularly in speaking in an accent that is understandable to clients. Some

employees interviewed expressed difficulty with English communication, particularly if they

grew up in rural areas in India, where fewer schools teach in English and the English instruction

tends to be of a lower quality than found in the urban centers. Even proficient English speakers

may have trouble understanding American English accents and phrases, and customers may

similarly experience trouble understanding their offshore Indian workers.

There are various approaches to teaching soft skills, which include informal instruction

coordinated by a manager or a mentor, team socialization, and formal classroom training

programs, E-learning modules, and outside consultations. Team level socialization, group

trainings, and exercises may provide a forum for presentations. Group level training may also

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include customer role-plays in front of a group that can comment and learn from the interaction.

At the GRC, for example, there is a cohesive and congenial team atmosphere and soft skills

training occur at the team level itself where experienced members and managers mentor new

employees. Soft skills training, particularly for employees from rural areas, focus on

communications skills. At Evalueserve, they have a more formalized presentation skills training

programs where employees can make a speech that is recorded on video that receives feedback

from training experts in oral communication and public speaking that provide feedback on the

strengths and areas of improvement, covering such areas as body language, tone, and

presentation content (Interview 41, Executive, Evalueserve). All 4 firms used either e-learning

modules, developed internal or externally by outside consultants, to help facilitate some of the

“harder” aspects of soft skills training, such as explicit business rules and examples of business

emails.

Conclusion

An analysis of knowledge intensive services based on four knowledge intensive services

demonstrates that industry upgrading does not depend solely on learning “hard” skills, but also

on “soft” skills that include tacit knowledge, impression management skills, and embodied

cultural capital. Externalization may help firms capture tacit knowledge, but it cannot solve all

related tacit problems. Indeed, over reliance on explicitly articulated frameworks and metrics

may actually obscure the tacitly expressed goals and knowledge elements culturally embedded,

especially when moving across cultures in business. Intercultural skills embedded in cultural

cognitive frameworks will be required as long as Indian service firms are focused upon export

markets or have co-workers based in foreign countries.

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Knowledge intensive service also require a degree of technical “know-how” that may

only be partially explicitly articulated. Service firms from this study have adopted a variety of

strategies to try to capture and disseminate these aspects of tacit knowledge ranging from one-

on-one mentorship, to visual knowledge sharing sessions, to broader networks that extend

beyond the firm.

This analysis depicts firms are the primary actors in trying to create, capture, disseminate

tacit components of knowledge necessary for offshore services. However, there are other

organizations, universities, and governments that are involved in trying to address some of these

tacit knowledge issues at a broader industry level in India. One example is the CII support of the

“K Community – India” network and their regional groups discussed above. Another example, is

the trade association representing the software and services industry in India, NASSCOM, which

is working with government and universities to craft training programs that more appropriately

address India’s skill gap in a number of skill and knowledge areas. A component of these skills

focus on the development of “soft” skills and professional skills required for employment along

side more traditional explicitly articulated technical capabilities and industry knowledge

(Interview 086, Director, NASSCOM, 4/7/209). According to a senior civil servant who has

worked with NASSCOM, the trade association was working with government, firms, and

universities to upgrade worker skills and part of these efforts were focused on providing “soft”

skill development and English language development alongside more traditional academic

studies (Interview 80, Government Official, 2/27/09). The purpose of the NASSCOM supported

program is to increase the soft skills in graduates before they reached the labor market.

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Market". Academy of Management Perspectives, 20(4), 35-41.Drucker, P. (1993). Post Capitalist Society. New York: Harper Business.Friedman, T. L. (2005). The World Is Flat: A Brief History of the Twenty-first Century. New

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NASSCOM (2006a). Annual Report 2005-06. New Delhi: NASSCOM.NASSCOM (2006b). Medical Transcription Outsourcing New Delhi: NASSCOM.Nonaka, I., & Takeuchi, H. (1995). The Knowledge Creating Company. New York, NY: Oxford

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http://www.rediff.com/money/2008/jul/17sd1.htm

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Appendix: Tacit dimensions of work across 4 Firm Cases

KPO Medical Finance

More Specialized

Teleradiology Solutions:Core service: Radiology reporting

Skill requirements: Interpretive knowledge to assess abnormalities in imaging technology

Skilled Employee profile: 30 US ABR Radiologists & some Indian certified radiologists

Tacit technical “know-how” Knowledge sharing sessions and weekly visual review sessions of “difficult” cases.

“Soft-skills” Training: Internal & external consultants train on business, leadership, & communication skills

Evalueserve:Core service: Financial and patient research

Skill requirements: Analytical skills and in-depth financial literacy

Skilled Employee profile: 1700 research analysts; engineers, MBA’s, intellectual property lawyers, PhDs, chartered accountants, statisticians

Tacit technical “know-how”“Research is an art”Team knowledge sharing sessions

“Soft-skills” Training: Cultural training of employees to interact with culturally diverse clients & employees. Video recording & feedback on presentation skills.

Less Specialized

Global Radiology Center:Core service: Manipulation of MRI or CT scan from 2D to 3D image

Skill requirements: Interpretive knowledge to assess abnormalities in imaging technology

Skilled Employee profile: 4 Indian certified radiologists & 4 certified technologists

Tacit technical “know-how” Aptitude: “more art than science” One-on-one & team mentorship

“Soft-skills” Training: One-on-one & team mentorship

Infosys BPO, Knowledge ServicesCore services: Financial analytics, research.

Skill requirements: Analytical skills and in-depth financial literacy

Skilled Employee profile: 1000 highly skilled professionals, including chartered accountants, MBAs, engineers, statisticians and economics graduates

Tacit technical “know-how” Company discussion boards and “Wikis” provide collaborative discussions around topics. Team collaboration.

“Soft-skills” Training: Highly structured soft-skill training environment. Online modules & tutorials.

Specialization: Defined as how interpretive and customized the work is. If it tends to be more routinized, less tailored/ customized, it therefore less specialized. The degree of industry skill and knowledge (domain knowledge) required for a job tends to increase the specialization of that job.

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3-D Imagery samples downloaded from MGH website: http://www.mgh3drad.org/index_noflash.html

Producing 3D imagery from a 2D image to enhance radiological diagnosis.

“So apart from the knowledge, it is more like an art” (Interview 17, Radiologist, GRC, 11/1/07).

Sample 1: 3D reconstruction of neck CTA showing carotid bifurcation used to assess stenosis.

Sample 2: 3D reconstruction of CT Urograph shows two ureters on the left side.

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