How to Insource Digital Services in the Public Sector: Lessons Learned from the Italian Case of Enel

Abstract

Over the past three decades, outsourcing digital services has helped public organizations save money. However, most public organizations have recently complained about losing control over the outsourced digital services and facing increasing costs. As a result, some public organizations have started evaluating the insourcing of previously outsourced digital services to regain control and decrease costs. While the literature acknowledges these motivations, it lacks detailed guidance on how public organizations should insource digital services. This paper addresses this gap by examining how Enel, an Italian utility provider whose main shareholder is the Ministry of Economy and Finance, successfully insourced a digital service that had previously been outsourced to various suppliers. From Enel’s study, this paper contributes to the literature by providing a comprehensive framework that explains how to execute the insourcing process.