September 10, 2012, 6:15 AM — You hear it time and again, outsourcing strategies that backfire or hinder a company's ability to remain competitive in a fast-paced marketplace. Needs change, and yesterday's strategic panacea becomes tomorrow's roadblock to innovation.
Count General Motors among the companies reassessing -- and in the automaker's case, actually reversing -- its sourcing strategy. That's right, one of the biggest consumers of outsourcing services is in the process of shifting away from IT outsourcing and bringing much of its technology work back in-house.
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In light of such a dramatic reversal in IT strategy, anyone who relies on outsourcing providers to fulfill IT functions should at least think about their sourcing strategies and how they might be changed for the better.
And there are indications that the growth of outsourcing is slowing. Research and advisory firm Everest Group in August 2012 reported that the global services market saw transaction volumes dip in the second quarter of this year, following a declining trend seen over the previous four quarters.
Whether it is to increase flexibility, deliver solutions faster, or improve quality of service, organizations seeking to break free of outsourcing dependency should keep in mind that weaning off service providers is no easy matter. It involves building up internal expertise and streamlining your IT operations; for lots of companies, the move to insource can be long and costly.
Here are five tips for making your insourcing endeavor a success.
Kick the outsourcing habit tip No. 1: Soul-search -- with an eye on the long termInsourcing versus outsourcing is too big a decision to make without deep corporate soul searching. This requires not only looking at current needs but also forecasting future requirements and IT's role in addressing them. What impact would insourcing have on achieving those goals and delivering the best products and services to customers?