Making the Kessel Run: Re-Insourcing Software Development in the U.S. Air Force

Abstract

The U.S. Air Force has traditionally acquired software through the military acquisition process. This acquisition process is used broadly for diverse types of purchases and requires considerable time. Concerned that this approach is not ideally suited for the acquisition of rapidly evolving, innovative software, the U.S Air Force re-assessed its previous make or buy decision regarding software and stood up Kessel Run. Kessel Run is an innovative, in-house software development organization, intended to assess the viability of “re-insourcing” software development. This research reports on a case analysis of Kessel Run. We explore why and how the Air Force developed Kessel Run and offer insights into its operation. Our results suggest that, while cost-reduction goals certainly facilitated Kessel Run’s origin and cost reduction has remained a benefit, the primary driver and benefit of re-insourcing Kessel Run is capability development. This finding seems to support a resource-based logic to insourcing. Our results also show that the leaders of Kessel Run succeeded in establishing the organization by relying on commercial start-up concepts, which allowed the organization to attract talent, develop capabilities, and meet customer needs far faster than typical acquisition approaches. We identify lessons learned and implications for other re-insourcing opportunities.