A company-reported sourcing example
Klarna reports reducing external marketing-supplier spending and attributes part of that reduction to AI. The work named includes translation, production, CRM and social agencies. It is a concrete sign that purchasers are revisiting the components of an agency relationship.
The assumption worth revisiting.
Bringing routine production inside can increase speed and learning. It can also remove useful challenge, market understanding or specialist judgement if those were bundled into the relationship. An invoice is not a map of the value behind it.
Which part of this relationship makes us more capable, and which part simply makes more material?
Give the capacity a purpose.
Separate what you want to produce, learn, own and continue buying. Use some released capacity to build the internal capability and maintain access to outside perspective.
How this fits the capacity allocation →
Use AI to challenge your first interpretation
Help me explore this question: Which part of this relationship makes us more capable, and which part simply makes more material? Identify the assumptions in our current approach. Offer alternative explanations, including one that challenges our preferred answer. Separate hypotheses from evidence and suggest what we should ask the people affected.
Treat the answers as possibilities to test with people and evidence.
Go deeper into the evidence.
UK Government Commercial Agency / Government Commercial Function · Official decision framework
The framework compares internal, purchased and mixed delivery using whole-life costs, capability, risks and outcomes.
Public-sector guidance, not evidence that insourcing saves money or a general legal requirement for private companies. Applying the method here is TIP’s interpretation.
Klarna Group plc · Company annual filing; company-reported attribution
Klarna reports a $7m Q1 2024 reduction in external marketing-supplier spending versus Q1 2023 and attributes 37% of that decrease to AI. Named services include translation, production, CRM and social agencies. The filing also describes workforce reduction alongside AI efficiency, cost optimisation and normal-course employee attrition.
Management attribution, not an experiment. Supplier reduction is not proof every service moved in-house. The filing does not establish that every leaver went unreplaced, that there were no layoffs, or that all workforce changes were caused by AI.
podcast
Agentic AI and the future of global business services
McKinsey · McKinsey Talks Operations
A useful prompt to reconsider the boundary of shared services: which decisions and activities could move closer to internal operating knowledge?
Listen or watch for: Would moving more work inside improve the complete process, or simply move a bottleneck?
About this resource
Consultancy examples and forecasts. The episode does not establish that insourcing is always cheaper or that predicted headcount reductions will occur.
Turn the question around.
Your customer’s insourcing opportunity could change your own business model. Explore which part of your offer they could own, and the value they would still want from you.
Explore the commercial risk →How TIP applies this to itself →