Business process outsourcing (BPO) is an advanced type of IS outsourcing. This study will investigate the obstacles and challenges of BPO Industry. One of the most important problem in this area is identifying existing explicit knowledge and using it to create further knowledge for decision making, so deep investigation on a conceptual model is needed that helps realize the complexities of outsourcing areas especially for business process outsourcing. Most of outsourcing literature has focused on social and cultural impacts and very few tools have been developed to assist manager in making outsourcing decision by modelling the knowledge. In this paper we propose a methodology for modelling the knowledge of a domain in small and medium size enterprises (SMEs). This methodology is based on ontological knowledge map. Findings of this research overcome these obstacles through the use of a formal organizational ontology and knowledge structure maps. The ontology guides decision makers in managing the complexity of outsourcing with holistic approach to the domain of outsourcing. Ontologies as a conceptual model provide a framework to facilitate efficient and effective knowledge-sharing, knowledge reusing and improving communication by modelling the domain of discourse. Keywords: business process outsourcing, ontology, knowledge ma
