GE Capital CIO: Outsourcing Went Too Far

In this article about GE Capital’s decision to reduce its use of IT outsourcing in favor or more insourcing, Partner Steve Martin offers industry commentary. Sample excerpts: “’As hard as it is to outsource, insourcing is probably five times that difficulty,’ says Steve Martin, a partner at the outsourcing consulting firm Pace Harmon (which isn't working on the GE effort). Just hiring hundreds of people in a short time frame is fraught with pitfalls, including getting the right skills and building the right culture… But across industry, Martin doesn't see a macro insourcing move; it's moving ‘from a trickle to a slow drip.’ However, he does see dissatisfaction among long-time outsourcing customers that their providers ‘fall into a cadence’ and stop delivering the speed and savings they once did. Quality problems rank just behind speed and cost as another top concern. Martin thinks companies still can get speed, savings, and quality from a well-crafted outsourcing deal, but that today ‘you're seeing just a lot of frustration with the outsourcers in terms of performance.’"