Internal Bias regardless of internal pressures to reduce costs
We have seen the following drivers for avoiding outsourcing
A. Highly customized processes:
Companies with complex back-office processes that are highly customized to their internal customers’ needs typically fear a loss of control when outsourcing. In this scenario, the knowledge transfer process involved in outsourcing is extraordinarily long and is seen as risky. Fear of degradation of service levels is also high. Finally, the internal pressure from below the executive level (typically at the business unit functional level) to keep the processes in-house is high because those functional owners are the original architects of the customized processes and are closest to the customers.
A subset of companies, typically in manufacturing (or other older, established industries) and ―town‖ companies, are wary of the outsourcing blow-back from their constituents. In industries where layoffs are common and customer reaction may cause loss of market share, outsourcing avoidance is higher than the norm.
C. Cultural aversion
Some companies will not outsource as a matter of internal policy. Captive centres can offer a practical compromise for companies that want to gain ―outsourcing-like‖ benefits while keeping the work in-house. Companies looking to choose between outsourcing and establishing a captive centre should conduct an internal change readiness assessment to determine the level of internal bias.