Is Outsourcing Declining?

Deloitte has released a study on outsourcing. The study shows that:

-Seventy percent of participants have had significant negative experiences with outsourcing projects and are now exercising greater caution in approaching outsourcing.

-One in four participants have brought functions back in-house after realizing they could be addressed more successfully and/or at a lower cost internally.

-Forty-four percent of participants did not see cost savings materialize as a result of outsourcing.

The problem is that some businesspeople, in typical blockhead fashion, forgot that outsourcing was a tool, not a panacea. So they jumped on the bandwagon without really understanding what they were getting into. Outsourcing is great – sometimes. It is not always a good strategic move. It depends on the situation. I hope they have learned from their mistakes, but I won't hold my breath. (When I hear about some corporate blogging strategies, I think the same thing – mistaking a tool for a panacea).

If outsourcing really does start trending downward over the long-term, that will be bad news for economic doomsdayers. It was one of their favorite scapegoats.

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