In 2005 a trend swept the outsourcing industry that people thought would spell the end of outsourcing or at least curtail its rapid growth – insourcing.
End user companies, either not satisfied with the outsourcing service or undergoing a change of requirements, deemed outsourcing or offshoring unsuitable and brought the process back in-house.
One example in was that of Sainsbury’s, who outsourced IT to Accenture, but decided to end their agreement three years early. People assumed the failure was because of serious faults in the quality assurance and testing of the service or a failure to meet SLAs and agreed KPIs.
But the insourcing trend has gone quiet. Outsourcing, in the meantime, has boomed. Maybe firms are keeping their deals more quiet from the press for fear of damage to reputation or maybe companies are actually heeding the best practice advice that the NOA has advanced for so many years and the outsourced deal worked!
Either way it came as a bit of a shock when insourcing reared its ugly head recently in the deal between NYSE Euronext and Atos Origin. The specifics of why the IT is to be insourced remain unclear, but what is apparent is that insourcing is still prevalent and that outsourcing is not (yet!) perfect.
Lessons still need to be learned and best practice still needs to be developed and followed.
But at least outsourcing is generally moving in the right direction…out!