Most of the IT team working in the Perot data center had been employed by CVS before being outsourced. "We rebadged them as CVS Caremark employees. It was a morale boost for them to be part of the team again," says McGuigan. The company expanded the Scottsdale data center, and the two facilities back each other up for critical applications. The insourcing has enabled IT to be faster and more flexible, and it also brought the technical teams supporting the retail and pharmacy benefits business closer, adds Steve Zoltick, CVS Caremark's vice president of infrastructure and operations.

McGuigan says he wouldn't rule out outsourcing the data center again "if it gets to a point where the services are so standardized and predictable that it makes sense." But the stresses of backsourcing previously outsourced work mean it isn't a decision to be made lightly.

"Once you control it, you have to show how you reduced costs, increased speed or improved agility," McGuigan says. "If you can, your [business] partners will welcome the insourcing. If you can't, they're going to wonder why you're not outsourcing."

in CIO's Financial Drilldown.