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Tim Wright and Tania Williams Consider the New Insourcing Trend
As mentioned in: Computers & Law OnlineNovember 23, 2012
Partner Tim Wright and senior associate Tania Williams, both members of Pillsbury’s global sourcing practice in London, discuss the insourcing trend, which is on an uptick due to backlash the outsourcing industry received during the recent U.S. presidential election. With outsourcing being confused with offshoring during the debate and news of General Motors’ plans to discontinue its IT outsourcing arrangement and bring 90 percent of its IT work back in-house, insourcing is being examined heavily.
Randy Mott, GM’s newly appoint CIO, announced that they will open several innovation centers in the U.S. and hire 10,000 IT professionals over the next three to five years, making their insourcing plans significant. Turning over a new leaf, GM had previously relied on outsourcing workers to run its global IT functions. Another company following in GM’s footsteps is JPMorgan, who recently cancelled a five billion IT outsourcing contract and rehired 4,000 workers from IBM.
In a survey earlier this year, 48 percent of respondents had terminated an outsourcing contract due to vendor performance issues and changes in business strategy. While outsourcing is still more popular, insourcing is being considered by many companies with 34 percent of respondents reporting using insourcing as an exit strategy.
