Niyamath Parveez

What is insourcing? A definition for this term is rather hard to find, but a close approximation can be made, such as, “an internal division of the company, but one that is run strictly along the commercial lines, handling tasks that would otherwise have to be outsourced”. This insourcing department is a division of the company, but is treated as if it were an outsourcing service provider. For instance, a manufacturing company may “insource” its brochure designing to an insourcing department. It is a new way of cutting costs and boosting profits that a number of US-based companies are opting for.

Insourcing a service is not without its share of drawbacks though. In fact, insourcing a process can at times have more problems than simply outsourcing it. Some of the noteworthy conditions that need to be satisfied in order to make insourcing a process successful are as follows:

1. IT Director must be knowledgeable enough – This one should go without saying. When you are insourcing a process, your IT Director will be in charge of it. Naturally, the Director must be knowledgeable enough to co-ordinate between teams, keep the upper level management informed about the progress of work, and be able to assist in hiring proper candidates, if necessary. Also, it is the IT Director’s task to calculate the funding required for handling the project and communicate it to the upper level management at the beginning, so that he/ she would have a sufficient budget at hand to get the job done.
2. The process must be clear to upper level management – It is very important to keep the upper level of management in the loop about the process. They should be well informed not just about the status of the project, but also the little details, such as the man hours being spent for it, and most importantly, the cost requirement for completing the job successfully. That way, it is easier to get additional funding for the project, should it be necessary at some stage.
3. Arrangement for additional training must be there – It is important to note that all staff members in the insourcing department may not have the same level of technical expertise. There must be arrangements in place to make sure that they can be trained to upgrade their skills, if necessary. This would mean allocating additional money at the starting of the project, in case additional training sessions are required later.
4. Treating the insourcing team as an outsourcing service provider – It is important to always treat the insourcing team like an outsourcing service provider. The management of the department should not be handled by the management that looks over the rest of the company. It is better to have the department managed by a separate IT Director, who will keep the company management in the loop about the status of the projects, maintain communication between the teams involved with the project and request for additional funding if required to finish the project on time.

Thus we can see that insourcing processes does not necessarily mean that outsourcing will be obsolete. The steep requirements that need to be met in order to insource a process successfully may make outsourcing more profitable for companies after all.