What are the reasons for Insourcing?

Question

We're making a project and we really need the reasons for Insourcing...all the information we found for insourcing is being "the opposite of Outsourcing"...we'd be appreciated if someone help us about this question :)

Answer 1

Reasons for insourcing are:

1.  Intellectual Property

2.  High-tech/High Security

3.  Infrastructure (if it would cost more to ship it from China than to produce it in the USA then no use in outsourcing)

Answer 2

Insourcing takes advantage of the fact the American workers are still far more productive then workers in other countries (some industries competitive advantages factor in but as a general rule). Insourcing takes advantage of the dollar (while it is low). Also states are usually pretty good at cutting huge deals on taxes and whatnot

Answer 3

To boost the American dollar for one, give work to Americans. Better over site on quality and safe products.

NAFTA is a broken, unfair system that needs to be thrown out.

Answer 4

Insourcing can mean a couple of things, formally, it can mean bringing overseas workers from India/China particularly but often from Russia or elsewhere to perform work here in the US.

I'll describe a small oddesey in outsourcing which became in sourcing which lead directly to just simple employee hiring from the local area. We did not have a broadly or specifically positive experience with this particular trend.

One of the things we found was seriously problematic about outsourcing was that we had some significant problems.

1. Costs - Our costs started out and remained fairly moderate for our projects however, as time went on we needed to involve more stateside staff to oversee projects which of course increased the project to the point where it was a "Chiefs and Indians" problem. When it became clear to management that our manager to worker ratio had fallen below 3 to 1 and was fast approaching 2 to 1, outsourcing became a non-starter.

2. Competence - The (in our case Indian and Chinese) groups we used for outsourcing did posess talented and creative people in their departments, however, we discovered a very disturbing trend.

With US workers it is unacceptable that an IT worker know - just one thing within a very narrow knowledge domain, unless they are a Ph.D candidate or otherwise significantly advanced in their area of expertise, the ability to adapt to circumstances and learn new material - on demand is requisite.

We found that there were a very few "fluffer" employees at the the three firms we worked with, these employees were very bright, highly competent and willing to consult for approximately 2/3'rd to 3/4'th the salary of a US worker (in the NYC tri-state area). When our contracts were just beginning we had high availability towards these reps and they were quite attentive to our needs.

After the projects were started, invariably these "fluffer" employees were utterly absent and we were left with larger "teams" of employees who were each VERY narrowly competent in certain areas.

This is done for very good reasons in India (if you are the consulting firm), employees who become broadly competent can demand higher salaries so new employees who are brought in are only given training or "allowed" to learn how to do a very narrow range of skills and tasks. This necessitates and implies both a team and keeps all of the workers dependent on the particular firm for employment.

3. Control - This largely leads to the last factor which caused us to reject outsourcing, which was control, after the employees who started our project were taken off the project, from week to week, we had competency issues where X did not know Y or did not know what Y as working on, often times it would take days to determine if there was a project breakdown.

4. Quality control - eventually - the these staffers would simply say that their part of the project was done, simply because they did not feel like  working on it anymore , this required management layers to be introduced and quality control teams to be developed in addition to the development and testing staff.

To solve this problem originally we in-sourced some of the staff workers involved, when they became available - some months later.

After transitioning three employees here, 6 months of delas later, we discovered the nature of their "pidegon-hole" knowledge, and more immediately critical was a serious refusal on the part of two of them to take initiative to become more broadly skilled unless that skill-set / training was given in lieu of office-time / productive work. After some months of working along those lines, all three in turn decided to return to India. Leaving us with no knowledge base and limited options.

Still undeterred when we went in search of another firm, we ended up finding out that our product-line and designs for our product were in fact being advertised as developed and this other firm was already working with our competition in the marketplace. Adding insult to injury, two of the individuals previously associated with the project were not only not available to us , but we found out later, were working with our competition.

Immediately we terminated two similar startup projects and lawyered up for action against our competitor, having that action in place, we did something which was positively anathema and against the advise of a "consulting group" which had sold us on the idea of arbitraging our IT products.

Approximately a year later, we have brought two young engineers from the local college and a Sr. DBA/Systems Designer in house for development. It costs us about 15-20% more than we were spending with all the middle management and consult fees but everyone has an iron-clad NDA and non-compete agreement which we feel is enforcable.

Regarding the legal matter of suing our competitor, we were advised that it was not actionable since the firm in India approached our competition and thus the lawsuit would need to be litigated there.