Look for the InSourcing Bandwagon to Start Boarding in 2012

As per this recent article over in World Trade on The Next Generation of Outsourcing, Michael Corbett, Chairman of the IAOP (International Association of Outsourcing Professionals) has been quoted as stating that outsourcing has reached its “threshold moment” with its ability to drive global socioeconomic and technology progress.

And we all know what happens when a business craze has been pronounced as reaching its “threshold moment” or “inflection point”. The big 5/7/8 consultancies look for the next craze that they can build excitement around to keep the consulting dollars pouring in. And since they believe that business trends, like the economy and “retro” social trends are cyclical, I can guarantee that it won’t be long before “insourcing” is announced as the next big thing.

Just like “downsizing” turned into “rightsizing” when the consultants realized that ( a) “downsizing” is a very easy thing for the media to spin negatively (because it is negative) and ( b) taking out too many people cripples the company to the point that it can’t do anything, the consultants will suddenly discover that “outsourcing”, which is ( a) also capable of being spun negatively by the media, is very similar to “downsizing” and then rediscover that ( b) taking out too many people internally is bad and some should be “brought back” to prevent the company from being crippled. As a result, prepare for the influx of “insourcing” bandwagons in 2012, which are being built as I write this (and launched as the economic debate for the 2012 Presidential Election focusses on the economy and the lack of Jobs at Home).

But just like you shouldn’t have hitched a ride on the outsourcing bandwagon, you shouldn’t hitch a ride on the insourcing bandwagon either (even if you did hitch a ride on the outsourcing bandwagon). For many companies, that have spent the time, effort, and resources to not only develop a close working relationship with the outsource provider, but to integrate their best practices and knowledge into their operations, continued outsourcing is the right way to go. Disruption, which occurs when something is pushed out or pulled in, is extremely costly. If the relationship is working well, and the provider is providing the services in a lower cost locale, pulling it back in doesn’t make sense. As with any major strategic decision, a thorough analysis has to be done to make the right decision. And that never happens if you just jump on a bandwagon.