Outsourcing backlash

As companies seemingly rush to outsource and "offshore" jobs (see below), there are signs that we're in the opening stages of a significant, management-driven backlash against the practice of outsourcing in general.

Computerworld reports on the results of a Deloitte Consulting study:

While organizations turned to outsourcing during tough economic times to cut costs and boost efficiencies, a study by Deloitte Consulting has found that few organizations have realized the benefits they expected and some are bringing outsourced projects back in-house.

The survey of 25 large organizations with a combined $50 billion in outsourcing contracts found that 70% have had negative experiences with outsourcing projects and are now taking a more cautious approach. One in four companies has brought outsourced functions back in-house and nearly half have failed to see the cost savings they anticipated as a result of outsourcing.

The study, titled "Calling a Change in the Outsourcing Model" and released last week, concludes that companies will need to alter their approach to outsourcing as the economy expands. While cost savings will remain important, companies need to look at outsourcing more strategically to determine when handing off IT projects makes sense, says Ken Landis, a senior strategy principal at Deloitte.

Read the whole thing.