Why Some US Companies Are Giving Up On Outsourcing

Partner Andy Sealock and Senior Associate Chris Stacy discuss the rising trend of insourcing and when it makes sense for organizations to repatriate some parts of their business. Sample excerpt: “General Motors created a stir when it announced its intention to insource a majority of its IT operations to delivery centers in the U.S. GM is not the only company to pull back at least a portion of its previously outsourced offshore IT operations. Why are many companies more seriously evaluating in-house solutions? Outsourcing is the right approach for some companies – particularly those that take the time to properly structure an agreement that drives cost reduction, takes advantage of outsource provider best practices, clearly defines scope and service levels that meet the company’s needs, and allows the company to focus on its core competencies. When well planned and executed, outsourcing relationships provide substantial benefits to an organization. However, some companies are making the decision to repatriate their outsourced IT services. This is happening for a variety of reasons, including: failure to meet expectations…desire for in-house expertise…marketplace pressures…financial segmentation…contractual flexibility…visible and modular service delivery…[and] highly skilled retained organization."