Last edited 10 Aug 2021

Insourcing in the construction industry



[edit] Introduction

Insourcing (or self-sourcing) is the practice of using in-house staff to provide services that are not necessarily related to the primary activities or core competencies of their organisation. This practice may require external input to cross train staff, enabling them to undertake new tasks.

This is the reverse of outsourcing, which involves the contracting of non-primary business activities and functions to a third-party service provider.

[edit] Insourcing services

Insourcing services might include IT, security, facilities management, landscaping, accounting and other administrative functions. Some of these tasks are commonly associated with soft facilities management.

Within the construction industry, insourcing services may also include CAD/BIM, project management, preparation of documentation, human resource administration, energy management and other activities associated with operations.

When insourcing is applied to in-house facilities management departments, it may be beneficial to incorporate a charge-back scheme. This allows departments to be treated as an ‘in-houseoutsourced service with the ability to report tangible data.

[edit] A return to insourcing

In the last few years, many local authorities and other public sector entities have begun to review their policies around competitive tendering associated with outsourcing and to reconsider insourcing as a method for encouraging cost containment and accountability.

Competitive tendering became increasingly common in the UK in the 1980s, when it was seen as a way of making public organisations open themselves up to bids from private firms. This was intended to increase transparency, drive down costs and improve the efficiency of central and local government departments. However, it was criticised for placing too much emphasis on cost rather than value, and is now sometimes seen as a 'race to the bottom'. As a result, many organisations have made the decision to move away from long-term outsourcing contracts.

[edit] Benefits of insourcing

Insourcing can:

[edit] Drawbacks of insourcing

Potential negative aspects of insourcing include:

[edit] Related articles on Designing Buildings Wiki

[edit] External reference

Designing Buildings Anywhere

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