A number of studies highlighted a gradual increase in the number of enterprises switching from IT outsourcing to IT insourcing. Many large companies have already started terminating their IT outsourcing contracts, and bringing specific IT operations back in-house. In simple words, IT insourcing can be defined as the business practices of performing certain IT functions by deploying in-house staff and resources, instead of delegating the functions to an outside company. Also, the business practice differs from IT outsourcing in the category of cost, resources, control over processes, and location of the IT operations.
Understanding Important Aspects of IT Insourcing
Many companies outsource their software development and testing project to save money. They can develop and test the software by taking advantage of the existing workflow and employees of the outsourcing partner. But a business has to develop new work processes, build the required infrastructure, and deploy skilled employees to carry on its IT operations smoothly. Hence, the company has to invest extra time, effort and money to insource its IT operations successfully.
IT outsourcing enables enterprises to meet their IT requirements without using their own resources. But when a company switches from IT outsourcing to IT insourcing, it has to deploy its own resources. The company also need to explore ways to optimize resource utilization. Also, it has to increase the in-house resources to meet all requirements of the IT process or operation.
Location of IT Operations
When a company outsources its IT process the location of the operations shifts to the location of the outsourcing IT service provider. But when a company decides to insource the operations, it has to place the operations in its existing premises. Also, it needs to explore ways to place the IT operations in a nearby location to synchronize all its processes.
Control over IT Operations
When a company outsources its IT operations, it does not have any control over the operations and processes of the outsourcing project. It still needs to coordinate with the outsourcing partner to carry on the operations efficiently and smoothly. But IT insourcing enables enterprises to exercise full control over the IT process or operations. Many companies even opt for IT insourcing to avoid losing ownership and control.
Cloud Computing and Technologies
The cloud-based services and tools enable enterprises to switch from IT outsourcing to IT insourcing. A business can avail cloud technologies to carry on IT operations without building and maintaining physical infrastructure, and avail adequate resource on demand. Also, the cloud-based tools and services make various IT operations more efficient with reduced manual efforts. Many companies take advantage of cloud computing to insource their IT operations and avail benefits in terms of time, cost and quality.
Development and Utilization of Internal Talent
Many large companies have stated that IT outsourcing is affecting the in-house IT skills bases adversely. Also, outsourcing does not encourage the in-house software engineers to experiment and innovate. Hence, the IT outsourcing may impact a company’s culture, productivity and profitability in the longer run. But a company can always insource its IT operations to leverage the skills of in-house employees fully and encourage innovation. It can further enhance the skills and productivity of in-house software developers through training.
Preserving Intellectual Property
Nowadays, each enterprise explores ways to beat competition by preserving its intellectual properties effectively. A business can easily preserve intellectual property by custom software application development through in-house software developers and engineers. Also, the enterprise can use the software more efficiently to convert website visitors into customers and get higher ROI in the longer run.
Avoid IT Outsourcing Scandals
A number of studies have highlighted a steady increase in IT outsourcing scandals and controversies. Hence, the enterprises must explore ways to save money by outsourcing the IT operations to the right company and avoid these outsourcing scandals. Many companies also bring their IT operations back in-house to avoid these outsourcing scandals and controversies.
However, each enterprise must consider several factors and address a number of challenges to insource its IT operations successfully. For instance, the business needs to calculate insourcing cost, assesses the strength of its in-house IT support and infrastructure, and decides the amount of time required to insource IT operations completely. The business also needs to make and implement a comprehensive strategy to switch from IT outsourcing to IT insourcing without affecting its IT operations and functions.