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Glossary ·Turnaround & Restructuring

Backsourcing

Also known as: In-Housing, Insourcing (Development), Bringing Development In-House
Definition

Backsourcing is the full or partial repatriation of previously outsourced activities into an internal team. The peer-reviewed literature identifies three exit options from a failing outsourcing relationship - backsource, renegotiate, or change vendor - and models the transition as five parallel workstreams: change management, vendor relationship management, competence building, organizational build-up, and transfer of ownership. Documented drivers are quality problems, cost, and loss of control.

The best-audited large case - Norway’s NAV, which brought 100+ systems in-house - succeeded on delivery speed, ownership, and quality while researchers could not verify the cost savings that motivated it. Plan backsourcing for the benefits that materialize, and pressure-test any business case built purely on per-developer savings.

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