Tuesday, October 18, 2011

Companies Moving Away from Outsourcing?

If there is anything like a pattern to enterprise information technology and communications strategies, it is that strategies oscillate between the "do it yourself" and "outsource it" poles. There are periods when the trend swings one way, and other times when the trend reverses.

Consider the ways enterprises source IT expertise. With all the talk about companies becoming more “agile,” many have taken the tack of outsourcing their IT operations to service providers of various types. But you always can expect a counter move at some point.

So it is that companies in some sectors such as healthcare and retail are moving to build their own IT teams, in some cases reversing course on a strategy of outsourcing.

Best Buy has announced that it will triple the size of the company's in-house IT staff by hiring 200 more tech professionals in 2012. Best Buy had largely outsourced IT operations, but the company's recently-hired CIO Jody Davis has reversed course.

Some attribute the oscillation to the logical value proposition any new CIO might want to bring to the table, which is that "what we have done does not provide enough value." It almost doesn't matter whether the current approach is "outsourcing" or "insourcing." What a new CIO often wants to do is prove his or her own value by changing course. You can argue about the ultimate value for any enterprise where that happens. But it seems to happen often enough that the oscillation pattern remains intact.

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