Navigating the Challenges of Insourcing

Posted 06-06-2013 Print Email

Businesses are exploring if they should bring some IT functions back in-house, but a successful repatriation involves a host of technical, legal and HR issues.

What if the contract doesn’t have a transition assistance claim, and the service provider is not motivated to help as it knows it is losing a gig? How can a company incentivize the provider to cooperate? Stacy suggests engaging the provider with the lure of project-based services. “It will cost a little extra, but it will be worth it to get the support,” he says. “It’s not just that they may not be willing to support, it’s that they may say they’re willing, but in actuality shed their best resources to other accounts.” Hence, it’s advisable to require that both key people and the project scope be retained.

An alternative to holistic insourcing is selective repatriation. Companies can look hard at insourcing “on a tower-by-tower basis”; that is, service desks, deskside support or asset management. “Don’t try to boil the ocean,” Stacy cautions, rather “see what specifically makes sense to bring in, and to the extent that you can do so effectively with your contract, bring things in gradually and see how it goes.”

Stacy expects selective repatriation to continue, with the trend depending on the success of initial decision-makers. “CIOs talk to each other,” Stacy says, and insourcing trailblazers’ experiences and ROIs will determine “whether others are emboldened to make similar decisions.”

About the Author

Based in New York City, Karen A. Frenkel writes about business, entrepreneurs, innovation, computer science and technology, and has been published by, Bloomberg Businessweek, and Science. 


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