Many a time due diligence is not done before making decision to insource what was outsourced. At times portions of it or entire arrangement. It becomes quite a challenge to pull it off for Managers at the ground level, if combined with their lack of experience in handling an insourcing event earlier it creates further challenges.

Often decisions to insource are made without calculated judgment or ROI. At times it is done just to threaten the vendor or due to non performance, safety breach, skill sets or delivery challenges.

I am a proponent of insourcing if the outsourcing arrangement is going south, the earlier the better so you don’t impact your business, your customers and your competitive nature among few. Having said that, it is important to do a detailed due diligence before pulling the plug and not after. Depending on the nature of insourcing whether you are bringing it back from a international location or domestic, the challenges can be different and manifold.

I have see several examples of insourcing and each of them needed a separate level of handling to ensure smooth transition without impacting the ongoing business. The most challenging one is to insource from an outsourced vendor located outside the country and build a team right there. At the outset it may look like a cost efficient venture but long term there could be surprise as costs mount both direct and indirect costs. Sourcing is one challenge, and keeping the resources against attrition is another. Rising wage costs, issues with logistics be it transportation, telecommunications, security after hours availability are all issues to contend with. Rampant poaching mean you will see constant attrition and transition from outgoing to newer resources, the need for bench strength will mean higher resource costs. Supervising is another challenge. Frequent need for travel from headquarters to remote location is both expensive and taxing. Visa issues create bottlenecks on free movement of resources. Training staff on both sides including cultural sensitivity needs to be factored as well.

it is advisable to take stock of what you could potentially encounter and have a mitigation plan in place. Bringing in advisors or those that have done this before would savings not just costs but also surprises as well.

it takes months depending on the scale to get to where you want to be. So don’t underestimate the pitfalls. Plan for it.