Since the early 1990’s, IT outsourcing has become a popular strategy with contracts valued at billions of Euro, and durations ranging from five to ten years. Stories in the computing and business press together with reports of analyses by consultants highlight that during the life-time of some contracts, organisations have reconsidered their original decision to outsource. With this rethink, the options available are to continue with the existing vendor and the existing contract, to re-negotiate some or all of that contract with the existing vendor; to re-tender the contract or part of the contract and seek new vendors; or to backsource, bringing some or all of the previously outsourced activities back in-house. This last option has major implications for the organisation yet there is little empirical research on this final part of the outsourcing process. This paper introduces backsourcing as a legitimate strategy in the outsourcing process. An exploratory study identifies some recent examples where companies have made the decision to backsource, surfacing the rationale behind those decisions. From an analysis of the data, an end-to-end model for the outsourcing process is presented. The paper concludes with an agenda for future research.
McLaughlin, Des and Peppard, Joe, "It backsourcing: from ‘make or buy ’ to ‘bringing it back in-house ’" (2006). ECIS 2006 Proceedings. 117.