They also suggest that similar cost savings might be achieved internally. Companies that outsource IS also may be outsourcing their capacity to learn and to coordinate technologies within the business, giving up the opportunity to build core learning competencies, and losing a capability that could potentially be a key success factor. Moreover, empirical evidence has so far provided little support for the popularity of outsourcing in terms of improving overall organizational performance. Not surprisingly, a general 'backlash' against outsourcing has begun to be reflected in the popular IS press.
Some companies are so disillusioned that they're bringing IS back in-house.
Recently, a trend toward more selective IS outsourcing has been identified. Companies such as DirecTV, Elf Atochem, SmithKline Beecham, and others are handing over bits and pieces of few IS activities such as asset management, network management, desktop management and applications maintenance to vendors while maintaining other functions, such as applications development, in-house. Our research over the last few years in this area suggests that this question is increasingly important. In fact, the advantages often attributed to IS outsourcing may be achieved internally within the organization by bringing the competition of the 'free market' to bear on the internal IS units and the user departments. For one recent example of an organization moving along this path, you may like to browse the story of Hartford's internal IT division.