The Biggest Decision CIOs have to make today: Reshoring vs Offshoring outsourcing.

29 Nov

Offshoring may not be the most beneficial option for CIOs when it comes to outsourcing. As I mentioned in my previous blog “Welcome to the age of Reshoring” outsourcing is becoming another vital decision that CIOs can be faced with.  William Floyd CTO, MB Trading has had mixed outcomes when it comes to outsourcing.  Over the last 20 years MB trading has been outsourcing to India-based companies but due to the long distance of India and its cultural differences has led to communication problems between teams effecting overall performance. As a result jobs that were once outsourced offshore are being reincorporated in-house.

“We are confident we can do much better than the outsourcing company, we also feel we can do this in-house at similar costs, due to the recession.” William Floyd CTO, MB Trading

Similarly for Richard Broome, CIO of Host Analytics location & distance played a major part in his decision whether to strategically outsource offshore or inshore. Initially Host Analytics a cloud based company outsourced its customer support to India. But it became apparent that there was a communication gap between offshore customer support and its customers, there was a lack of expertise. Broome came to realise that customers’ needs were not be met by outsourcing IT operations. A strategic decision to keep outsourcing in-house was a right decision for host analytics as it a skilled and experience workforce were able to understand the customer’s needs. (Techtarget.com)

Location was the difference between a nightmare and a dream-come-true outsourcing strategy.” Richard Broome CIO, Host Analytics

More recently Randy Mott CIO of general motors is withdrawing form it reliance on offshore outsourcing, but is reversing GM’s outsourcing strategy to an onshore one. It plans to double the in-house experts in the next 3 years but the big issue is maintaining efficiency without increasing costs. Will others follow suit at a detriment of IT service leaders like (HP, Dell, IBM) or is this just an unnecessary move that will be too costly to maintain?

“If you’re more efficient and you can go through the process more quickly, you have more time and more resources to be looking at innovations that provide a competitive advantage for the company,” Huston-Rough.

Employees at the Fiat and Guangzhou Automobile Group manufacturing plant in Changsha work on the production of Viaggio vehicles (BloomBerg Business Week)

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4 Responses to “The Biggest Decision CIOs have to make today: Reshoring vs Offshoring outsourcing.”

  1. ericlynch1 November 29, 2012 at 11:34 am #

    First of all ‘davidoppermann’ some man to jump on the CIO bandwagon.

    As for your blog, to say that the biggest decision a CIO has to make is whether to offshore or reshore I wouldn’t agree with. I recommend you should read a few of the blogs on the topic before you make a statement like that.

    Because there are a lot more important decisions that a CIO needs to make before the issue of offshoring or reshoring comes into play.

  2. ismisetusa November 29, 2012 at 3:44 pm #

    I see your love and passion of CIOs has taken over ericlynch1 – perhaps you would like to continue a blog on their roles past our own personal deadlines!

  3. ericlynch1 November 29, 2012 at 5:42 pm #

    well ‘ismisetusa’. you may be right about the passion for CIO taking over. and ya never know maybe I will continue to blog beyond the deadline seeing as I have got a taste for it now and have learned quite a bit in the last few weeks,
    WATCH THIS SPACE

  4. roisg November 29, 2012 at 9:08 pm #

    Interesting blog davidoppermann, I would say that GM’s decision to pull many of its jobs back onshore was a purely political decision, considering it was an election year and that Obamas government had bailed them out by $26.5 billion when they were at the brink of disaster, the US government still own about 25% of GM so id say that has much to do with that rather than negative issues experienced with outsourcing.

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