One-time e-commerce high-flyer Kana is swimming against the offshoring tide with plans to bring development back in-house.

Kana, which develops software to help firms with customer service, said it will bring development back to the US, rather than outsourcing to India.

“[Under previous management] we had outsourced development of our core products,” said Michael Fields, Kana’s chief executive. “But to give up intellectual property of our products was just not a good idea. While making the decision, all of the details of costs came back, including duplication of equipment and miscommunications.”

Fields said that its outsourcing agreement had taken away the human interaction of face-to-face meetings. “It was really a Byzantine environment and created a situation where it was costing us money to outsource it,” he added.

Smaller firms should reassess the view that it is cheaper and easier to develop software abroad, Fields argued. “I submit that there are significant differences to engineering in software [compared to] other industries,” he said. “There were rewrites and it was probably taking twice as long to develop versions as if we had done it in-house. The process was broken.”

The “backshoring” strategy comes as Fields attempts to rebuild Kana, a company once valued at $9bn but now no longer trading on the major exchanges. The firm plans to bolster staff and client management to win back customers.