Target to Insource Software Projects

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Target to Insource Software Projects

The news of Target's big push away from IT outsourcing and toward hiring 1,000 new global technology workers was first reported by The Wall Street Journal. It was divulged the retail giant was seeking to hire about 500 IT workers at its Minneapolis headquarters and 500 at its technology facility in Bangalore, India. Chief Information Officer Mike McNamara told CIO Journal that the company's reliance on vendors "got to a stage where almost half the team is in third parties. It's unhealthy."

Now, In an exclusive interview with The Economic Times, during the Nasscom leadership summit in Mumbai, McNamara said that while some work would be insourced, the Minneapolis-based retailer would still continue to work with technology vendors such as TCS.

McNamara said that Target, which currently spends well over $1billion on technology annually and has multi-million-dollar outsourcing contracts with TCS and Infosys, wanted to build up its own engineering capabilities internally and not rely solely on third party vendors.

"You have to have your own software engineering capability, you have to have your own data science capability in-house because that's how you're going to create a huge amount of value going forward. And that's why I want to do it — I want to build up our own engineering," said McNamara, who was previously CIO at Tesco. "I don't see the outsourcing model being fundamentally challenged. But I think it'll change in nature slightly. And those things that can make a difference to our business, we will develop ourselves inhouse," he added.