For a long time, companies have been using outsourcing as main strategy to overcome obstacles and gain competitive advantage. The reasons for doing so are many, including the possibility of cutting cost, sharing risk and focusing on the core competences. However, current research shows that outsourcing has reached its limits and companies start considering alternative solutions and revising their sourcing strategy. Therefore, an upcoming trends is to backsource. This describes the process of taking previously outsourced functions back in-house. As outsourcing brings a loss of knowledge, the matter of backsourcing is not always an easy one and therefore, bringing various challenges, which need to be overcome.The decision for backsourcing is taken when the outsourcing strategy no longer provides the best solution for the company to gain competitive advantage. On the one hand, the outsourcing partner might not be able to deliver the desired quality of the products or services anymore; on the other hand, the company itself might discover new opportunities, which provide more profit. Important motivations for backsourcing include regaining control of the core business activities, dissatisfaction with the outsourcing company, merger and acquisition etc.There are many risks and challenges managers have to consider when deciding to backsource an activity. The challenges derive from both internal and external issues and may vary based on the characteristics of each company and the business environment. Moreover, being aware of critical success factors can enable a company to fasten the backsourcing project and bring it to an end more successfully.This thesis aims at increasing the understanding of motives, challenges and critical success factors for manufacturing companies when conducting a backsourcing project. Therefore, a middle-sized manufacturing company’s backsourcing project has been investigated. From this case study, we were able to derive essential factors by interviewing managers in the under-explored field of manufacturing companies’ backsourcing projects.The result of this study shows that the matter of backsourcing plays a major role in every company’s strategy. Motivations for backsourcing could be connected either to dissatisfaction, the opportunity to gain market share or the opportunity of acquiring a competitor. Being clear about these motives and evaluating them carefully is the first step of the process. By having a strong project team, the challenges can be handled and overcome. Moreover, identifying and knowing the critical success factors enables the company to allocate its resources and in this sense to bring the project successfully to an end.

Bakgrund: Outsourcing är ett fenomen som rönt mycket uppmärksamhet under de senaste två decennierna, och kan ses som en trend. De företag som väljer att outsourca gör detta för att få de fördelar som outsourcing sägs ge. Trots de många fördelar indikerar ny forskning på att en del företag väljer att avsluta sina samarbeten med sina leverantörer. Dessa företag går därför emot trenden att outsourca. Syfte: Syftet med uppsatsen är att förklara varför småföretag väljer att insourca en specifik aktivitet. Uppsatsen ämnar testa begrepp från forskning kring outsourcing och backsourcing som förklaring till insourcing, samt identifiera hur insourcingprocessen ser ut för småföretag. Metod: Denna studie har tillämpat en kvalitativ metodansats där en fallstudie har utförts på tre småföretag. Datainhämtningen har skett genom intervjuer med företagens ägare/VD. Slutsats: Småföretags främsta anledning till att insourca en aktivitet härleds till ökad kontroll och service, men kan även härledas till ägarnas egenskaper som person. Insourcing är ett även ett sätt att garantera ett mervärde för kunden och på så sätt skapa långsiktiga, stabila och lönsamma relationer. / Background: Outsourcing is a phenomenon that has gained a lot of attention during the last two decades, and can be seen as a trend. The companies who choose to outsource do it to acquire the benefits that outsourcing can give. Despite the benefits, more recent studies shows that companies choose to end their cooperation with their suppliers. These companies therefore go in the reverse direction of the trend that says that companies should outsource. Aim: The aim of this studie is to explain why small entreprises choose to insource a specific activity. The studie will try to test different concepts from research regarding outsourcing and backsourcing to explain insourcing. The study also aims to identify how the the insourcing process looks like for small enterprises. Methodology: This studie has applied a qualitative method, where a case study has been used on three small enterprises. The collection of the data was made through interviews with the owner/CEO of the company. Conclusion: The two leading motives why small enterprises choose to insource an activity are because of higher degree of control and service, but also because of the characteristics of the owner of small enterprises. Insourcing is also a way of securing a high value in the offering of products to the customers and thereby create more stable, long-term and profitable relations with their customers.

Introduction: Outsourcing as a phenomenon has recently gained a lot of attention and is by some even considered as a trend. Traditionally, the functions to outsource have often been activities like computer operations or production with the purpose to cut costs or util-ize on resources not available in-house. The issues of outsourcing are however increasing, making the insight of the sources of competitive advantage and core competences more important than ever. With the rising amount of outsourced functions in firms of today, more and more outsourcing projects tend to end up with poor results. The combination of suppliers failing to live up to the standards set and an increased pressure of cost savings and quality improvements from customers is becoming untenable for many companies. As a result, large efforts are put into coordination and training and some companies even break their outsourcing agreement to either turn to another supplier or bring the function back in-house. Motives for bringing an outsourced function back in-house are often con-cerned with issues of quality and control. Purpose: The purpose is to determine whether backsourcing is merely a tool to correct implications of unsuccessful outsourcing agreements or if there are other underlying mo-tives to the process. Method: The study has been conducted according to the qualitative research approach. Empirical data has been collected through personal semi-structured interviews with repre-sentatives from three different companies that recently have backsourced a business func-tion. The empirical data have been analyzed in the light of relevant theories concerning outsourcing and backsourcing. Analysis: The analysis indicates on both differences and similarities of motives for, and implications due to outsourcing among the investigated companies. The same is evident for the backsourcing of the specific functions. Conclusions: From the analyzed data, conclusions can be drawn that all the companies suffered from implications from their respective outsourcing agreements and used back-sourcing to compensate for these. However, the process has, in some cases, increased knowledge and made the function perform better once taken back in-house. / Inledning: Outsourcing som fenomen har under den senaste tiden fått stor uppmärksam-het och anses även i vissa sammanhang som en trend. Funktioner för outsourcing har tra-ditionellt sett varit aktiviteter som datahantering och produktion med syftet att minska kostnader och få tillgång till resurser ej tillgängliga internt. Outsourcings ökande betydelse och komplexitet gör att företags förståelse för sina källor till konkurrensfördelar och kärn-verksamheter är viktigare än någonsin. Samtidigt som fler aktiviteter outsourcas i företag, påvisar allt fler outsourcingavtal på dåliga resultat. Kombinationen av leverantörer som misslyckas leva upp till förbestämda standarder och ett ökat kundtryck gällande kostnads-besparingar och kvalitetsbesparingar blir ohållbar för många företag. Detta resulterar i stora satsningar på koordinering och utbildning. Vissa företag till och med bryter sina outsour-cingavtal för att vända sig till en annan leverantör eller tar tillbaka funktionen internt. Ofta är motiven för att ta tillbaka en funktion internt förknippade med kvalitets- och kontroll-frågor. Syfte: Syftet är att avgöra huruvida backsourcing endast är ett verktyg för att korrigera konsekvenser av ett misslyckat outsourcingavtal eller om det finns andra bakomliggande orsaker till processen. Metod: Studien har genomförts i enlighet med kvalitativ metod. Empirisk data har insam-lats genom personliga, semikonstruerade intervjuer med representanter från tre olika före-tag som nyligen har backsourcat en företagsfunktion. Den empiriska datan har analyserats i ljuset av relevant teori gällande outsourcing och insourcing. Analys: Analysen påvisar skillnader och likheter av motiv och implikationer mellan företa-gen både gällande dess outsourcing och dess backsourcing. Slutsats: Från den analyserade datan kan man dra slutsatsen att samtliga företag led av problem från dess respektive outsourcingkontrakt och att backsourcing användes för att åtgärda detta. Processen har emellertid i vissa fall ökat kunskapen förbättrat funktionen efter det att den har tagits hem.

<p>Introduction: Outsourcing as a phenomenon has recently gained a lot of attention and is by some even considered as a trend. Traditionally, the functions to outsource have often been activities like computer operations or production with the purpose to cut costs or util-ize on resources not available in-house. The issues of outsourcing are however increasing, making the insight of the sources of competitive advantage and core competences more important than ever. With the rising amount of outsourced functions in firms of today, more and more outsourcing projects tend to end up with poor results. The combination of suppliers failing to live up to the standards set and an increased pressure of cost savings and quality improvements from customers is becoming untenable for many companies. As a result, large efforts are put into coordination and training and some companies even break their outsourcing agreement to either turn to another supplier or bring the function back in-house. Motives for bringing an outsourced function back in-house are often con-cerned with issues of quality and control.</p><p>Purpose: The purpose is to determine whether backsourcing is merely a tool to correct implications of unsuccessful outsourcing agreements or if there are other underlying mo-tives to the process.</p><p>Method: The study has been conducted according to the qualitative research approach. Empirical data has been collected through personal semi-structured interviews with repre-sentatives from three different companies that recently have backsourced a business func-tion. The empirical data have been analyzed in the light of relevant theories concerning outsourcing and backsourcing.</p><p>Analysis: The analysis indicates on both differences and similarities of motives for, and implications due to outsourcing among the investigated companies. The same is evident for the backsourcing of the specific functions.</p><p>Conclusions: From the analyzed data, conclusions can be drawn that all the companies suffered from implications from their respective outsourcing agreements and used back-sourcing to compensate for these. However, the process has, in some cases, increased knowledge and made the function perform better once taken back in-house.</p> / <p>Inledning: Outsourcing som fenomen har under den senaste tiden fått stor uppmärksam-het och anses även i vissa sammanhang som en trend. Funktioner för outsourcing har tra-ditionellt sett varit aktiviteter som datahantering och produktion med syftet att minska kostnader och få tillgång till resurser ej tillgängliga internt. Outsourcings ökande betydelse och komplexitet gör att företags förståelse för sina källor till konkurrensfördelar och kärn-verksamheter är viktigare än någonsin. Samtidigt som fler aktiviteter outsourcas i företag, påvisar allt fler outsourcingavtal på dåliga resultat. Kombinationen av leverantörer som misslyckas leva upp till förbestämda standarder och ett ökat kundtryck gällande kostnads-besparingar och kvalitetsbesparingar blir ohållbar för många företag. Detta resulterar i stora satsningar på koordinering och utbildning. Vissa företag till och med bryter sina outsour-cingavtal för att vända sig till en annan leverantör eller tar tillbaka funktionen internt. Ofta är motiven för att ta tillbaka en funktion internt förknippade med kvalitets- och kontroll-frågor.</p><p>Syfte: Syftet är att avgöra huruvida backsourcing endast är ett verktyg för att korrigera konsekvenser av ett misslyckat outsourcingavtal eller om det finns andra bakomliggande orsaker till processen.</p><p>Metod: Studien har genomförts i enlighet med kvalitativ metod. Empirisk data har insam-lats genom personliga, semikonstruerade intervjuer med representanter från tre olika före-tag som nyligen har backsourcat en företagsfunktion. Den empiriska datan har analyserats i ljuset av relevant teori gällande outsourcing och insourcing.</p><p>Analys: Analysen påvisar skillnader och likheter av motiv och implikationer mellan företa-gen både gällande dess outsourcing och dess backsourcing.</p><p>Slutsats: Från den analyserade datan kan man dra slutsatsen att samtliga företag led av problem från dess respektive outsourcingkontrakt och att backsourcing användes för att åtgärda detta. Processen har emellertid i vissa fall ökat kunskapen förbättrat funktionen efter det att den har tagits hem.</p>

Titel: Borta bra men hemma bäst? - kritiska framgångsfaktorer vid återförandet av en tidigare outsourcad aktivitet Författare: Gustav Forss och Simon Skott Handledare: Jörgen Dahlgren Bakgrund: Outsourcing har sen början av 1990-talet varit trendigt. Ett genomförande av outsourcing kan leda till avsevärda positiva effekter, det finns dock studier som tyder på att många företag har negativa erfarenheter av fenomenet, varpå backsourcing vuxit fram. Negativa erfarenheter av outsourcing samt att marknaden för densamma fortsätter att växa, borde innebära att vi i framtiden kommer se fler fall av backsourcing och dess roll som en alltmer etablerad strategi. Tidigare studier har endast fokuserat på motiven till backsourcing och vi vill därför bredda den akademiska förståelsen i ämnet. Syfte: Att identifiera de kritiska framgångsfaktorer som ligger till grund för lyckad backsourcing. Vidare vill författarna också öka förståelsen av fenomenet backsourcing. Definitioner: Outsourcing - överlåtande av en tidigare internt utförd aktivitet till en tredje part. Backsourcing - återförande av en tidigare outsourcade aktivitet, till egen regi. Insourcing - införande av en aktivitet som tidigare utförts av en underleverantör. Resultat: Genom studien har författarna urskilt ett mönster i hur och varför företag genomför backsourcing. Vidare har en modell över backsourcingprocessen skapats som kan hjälpa företag i återförandet av en aktivitet. Författarna har också identifierat fyra kritiska framgångsfaktorer som är specifika vid backsourcing. Sökord: Backsourcing, Outsourcing, Insourcing, Kritiska framgångsfaktorer, Backsourcingprocessen

Outsourcing has been a common topic in relation to business strategy for many decades. It is when an organization transfer some activities to an external vendor. In order to achieve a competitive advantage organizations use external vendors to perform the activities more efficiently and effectively. The global competitive environment has increased the use of outsourcing worldwide, concequently the use of outsourcing has changed the boundaries of todays firms. Lately, backsourcing has gained more attention, which is when an organization has outsourced an activity that was previously executed in house, and then bring it back into the organization again. Insourcing on the other hand, has been given less attention. It is when an outsourced activity that has not been executed within the organization previously, is internalized. The reason for choosing this research topic was that we wanted to write about something that could be applied to the “real world” and the decisions that business leaders face in their occupation. Therefore, when we were offered the chance to write our degree project for Alfa Sweden we accepted their proposal. We identified two main research gaps in the existing research regarding insourcing, there is no study that covers the insourcing process and the steps inherent in it. Additionally, how the organization’s capabilities are linked to the opportunities and challenges organizations face during insourcing, has not been examined before. Therefore, the purpose of this thesis is to build a model of the insourcing process and the steps included in each phase of the process. Additionally, to explore the opportunities and challenges that can arise when organizations go through the insourcing process. These opportunities and challenges will be connected to the company’s capabilities, meaning its resources and competences. In order to fulfill this purpose and gain a deeper understanding of this relatively unexplored field, a qualitative study was conducted. Eight semi-structured interviews were pursued where seven interviewees represented different companies belonging to the same group and one interviewee represented the perspective of an accountant firm. From the results of the interviews, we derived four themes, namely design of the sourcing solution, the insourcing process, resources and competences. Through analyzing the results of our study we have been able to create a model for what the insourcing process looks like and the steps included in the planning, implementation and control phase. This model can contribute and guide companies who are planning to insource certain activities in the future. Furthermore, our results revealed several opportunities and challenges and their connection to the company’s resources and competences. In addition to these theoretical contributions and practical implications we also provide practical recommendations for Alfa Sweden.

Uppsatsen är en kvalitativ studie av outsourcing och backsourcing. Outsourcing innebär att en uppdragsgivare överlåter hantering av aktiviteter och delar av verksamheten till externa leverantörer och kan ses som ett kraftfullt verktyg för att skära ner på kostnader och förbättra företagets resultat och effektivitet. Backsourcing innebär att man flyttar hem aktiviteter som tidigare varit outsourcade, i huvudsak på grund av olika avtalsmässiga problem eller på grund av intern omstrukturering samt omvärldsförändringar. Syftet med studien är att identifiera faktorer relaterade till en framgångsrik outsourcing samt även vilka faktorer som organisationer bör beakta inför en backsourcing. Arbetet är begränsat till att studera outsourcing respektive backsourcing inom den svenska finansbranschen. I underlaget till studien har intervjuer genomförts med sex olika experter som alla varit djupt involverade i ett flertal outsourcingprojekt, antingen genom att de har haft operativa chefsbefattningar eller genom att de har haft ansvaret som övergripande projektledare. Experterna har även bred kunskap avseende ekonomistyrning och organisationsutveckling inom finansbranschen. Studien baseras på primärdata som samlats in via kvalitativa intervjuer. Semistrukturerade intervjuer är det tillvägagångssätt som använts för insamling av data där intervjuerna genomförts per telefon på grund av de rådande omständigheterna med den pågående Coronapandemin (Covid-19). Därefter har relevant information sammanställts, kategoriserats och analyserats utifrån den teoretiska referensramen. Dataanalysmetoden har tagit inspiration från metoden Grundad teori där öppen kodning och kontinuerlig jämförelse varit centrala moment i arbetsprocessen. Studiens resultat visar på att de faktorer som uppmärksammats mest varit relaterade till samarbete och kommunikation samt uppföljning och kontroll. En god kommunikation och öppenhet har visat sig vara utmärkande för lyckade outsourcingprojekt. Det är även av avgörande betydelse att parterna i outsourcingförhållandet visar förståelse för samt accepterar den andra partens mål och syfte med outsourcingen. Resultatet pekar också på hur väsentligt det är att det outsourcande företaget inte avtalar bort sitt tillsynsansvar samt rätten till fortsatt insyn och kontroll. Baserat på resultatet har följande slutsatser dragits. Målanpassning, en öppen och kontinuerlig kommunikation samt ökad vikt vid avtalsarbetet är delar som måste beaktas. Om man prioriterar detta skapas bättre förutsättningar för att en outsourcing ska fungera optimalt. Samtidigt ger det en säkrare grund att stå på när man tvingas göra förändringar i ett outsourcingarrangemang som att exempelvis genomföra en backsourcing. / Outsourcing implies that a company transfers the management of activities to an external supplier. Backsourcing on the other hand involves bringing back activities that have previously been outsourced. The study aims to identify which factors that have been linked to a successful outsourcing and which specific factors that should be taken into account to be able to interrupt an outsourcing and implement a backsourcing. The study consists of experiences from experts who have been involved in a number of outsourcing projects, either because they had operational positions or because they had the responsibility as overall project managers. The result proves that various factors, mainly related to cooperation and communication as well as monitoring and control are essential during the outsourcing process. Based on the results presented, the following conclusions can be drawn. Goal adjustment, an open and continuous communication as well as a greater commitment in legal management, are important elements that must be considered. If one prioritize this, better conditions are created for an outsourcing to function optimally. At the same time, it provides a safer foundation to stand on when the company is forced to make changes in an outsourcing arrangement, and for exampel implement a backsourcing.

Abstract The thesis is a qualitative study of outsourcing and Insourcing/backsourcing. When developing strategies, managers need to decide between buying (outsourcing) or manufacturing (insourcing) various activities within the company. Outsourcing means that a company entrusts the management of activities and parts of the business to external suppliers and can be seen as an effective strategy for reducing costs and improving the company's flexibility. Backsourcing is a new trend and means that the company takes back activities that have previously been outsourced, mainly due to various contractual problems or to changes in the environment. The purpose of the study was to investigate whether backsourcing is an option for the case company. The purpose of the study is also to find out what types of costs resources and capabilities the case company will need in the backsourcing. The study primary informationwas collected via interviews. The method used was semi-structured interviews, conducted on site and remotely with five respondents from the company. The results of the study show that there are both pros and cons with outsourcing andbacksourcingstrategies. How and why companies were considering backsourcing was identified, as well as critical success factors specific to backsourcing, such as transaction costs, resources, knowledge, and capabilities. Based on the results and theory some analysis were made, such as the state the company is at the moment and changes that have happened in order consider its sourcing decision. And what changes in cost, resources and capabilities the company may need to prepare for

Outsourcing has become a well known and commonly used strategy for Swedish companies, which involves buying a part or process from a subcontractor rather than performing it within the company. Common reasons why companies chose to outsource rather than to perform the activities themselves are cost- and competition related. Previous low labour- and facility costs in countries such as China and Estonia have been forces that have kept the outsourcing trend strong. In recent years you can see more Swedish companies bringing back previously subcontracted functions into the company, so called insourcing. This can partially be explained by changes in external market factors such as raising salaries in low-cost countries and increased automation.

This paper examines the reasons behind firms considering backsourcing. While firms experience problems with their outsourcing activities, backsourcing emerges as an alternative solution. Firms primarily take cost considerations into account when reconsidering their outsourcing practices, but this only scratches the surface. A deeper analysis is needed, since cost increases arise from issues such as quality defects and cooperation problems. Even though production costs are low, outsourcing always implies transaction costs. Therefore, firms must implement a landed cost analysis before making their outsourcing decision. However, transaction costs occur from lack of competence, difficulties in communicationand problems in working relationships. This paper intends to focus on these underlying elements, since backsourcing is not only a matter of increased costs. Based on five interviews this study identifies these underlying elements. Findings suggest that backsourcing has emerged due to lack of monitoring and control systems as well as communication difficulties. Excessive focus on the core competence of the firm will also increase the risks of backsourcing. This paper also suggests that backsourcing may arise from business opportunities, since internal and external conditions change.