Outsourcing: is it growing, shrinking, or transforming?

In 1990, Hamel and Prahalad published an article in Harvard Business Review called The Core Competence of the Corporation. It argued that companies should outsource their non-core services, because, in the words of Jack Welch, “Your back office is someone else’s front office.”

This article helped to usher in an era of outsourcing. A rising tide lifted boats in outsourced logistics, IT, and HR.

32 years later, has that wave crested? It appears that companies are now rethinking those decisions.

Will more retailers start buying and deploying their own logistics services? The Wall Street Journal has picked up on this trend in the supply chain world. American Eagle, Walmart, Target, 7-11 and Gap have all bought or built third-party logistics capabilities to offer to peers.

Will we see more outsourcing or less in the coming decade?

Benjamin Gordon, Cambridge Capital