Insourcing Services

Business expansion and reduction cycles are becoming progressively more rapid. This necessitates increased agility to respond accordingly. Often, certain restrictions in outsourcing contracts can slow down necessary time-sensitive procedures.

Insourcing a contingent workforce gives companies the ability to scale projects up or down quickly as needed—all without affecting the head count of the core staff. 

The need for flexibility in human resources models is another driver towards insourcing. This need is particularly salient in the drug development and medical device industries, where companies must respond to the discoveries of their competitors, as well as nurture their own innovations, all within a tightening labor environment.

Over the past 10 years, many blockbuster drugs went off-patent. This created a serious challenge for pharmaceutical manufactures that now need to get drugs to market at a much faster pace. Hold-ups in product launch can seriously impact revenues. With as little as a one-month delay, a $150 million product can, as one executive explained, result in as much as a $12 million decrease in final sales.

It used to be assumed that outsourcing was the critical pathway to cost-effectiveness. The outsourcing organization took all the responsibilities as per the contract agreement with the sponsoring organization.

Many companies had indeed cited cost as an impetus for outsourcing. However numerous organizations found that cost factors accrued exponentially when

The IT industry offers a real-world case study in how the ills of pervasive "over-outsourcing" has led to a rebound of insourcing, with positive results. As cited by Deloitte in its 2013 IT insourcing report,  a whopping 79% were either satisfied or extremely satisfied with the change. 

As any good manager knows, quality is a major driver in the pharmaceutical or any other health-related industry. Quality problems can lead to numerous issues that may unfortunately fall into the lap of the sponsoring organization.

Multiple issues have been noted when sponsoring organizations have purely outsourced regulatory affairs functions. Many of these issues can have a direct negative impact on quality assurance. They include:

• Difficulties monitoring CRO performance
• Difficulties in evaluating CRO performance
• Compromised flow of information between sponsoring company and CRO
• Misalignment of shared vision and/or objectives

An interesting research study published in 2018 investigated how insourcing might be related to social capital and knowledge sharing. It compared social capital and knowledge sharing activities within and between firms.

Results indicated that that knowledge sharing and social capital are stronger when employees were in captive sourcing relationships. It also suggested that trust plays an important role in knowledge sharing and social capital. Insourcing, then, can lay a healthy foundation of knowledge sharing, creating environment of productivity and trust.

Life science industry leaders are rightfully concerned about compromising or losing critical skill sets within the company. Scientific research, development, and innovation will always be of high importance to the surviving and thriving of the organization.

Insourcing enables organizations to maintain control of processes and communications. In some cases, executives cite the improvement of control as a critical driver in the decision to pursue insourcing arrangements in the first place. One study reported that 77% of executives cited increased control as a rationale for insourcing.