Guessing is not a strategy: How to build decision velocity with AI and real-time data
June 10, 2026 | Live Webinar
5 Outsourcing Risks
Offshore outsourcing can help achieve a variety of business goals, but it is critical that senior management understand the many trade-offs. In creating a strategy to manage the offshore relationship, you must address these five major risks inherent in outsourced projects.
Businesses are under increasing pressure to do more with less, and offshore outsourcing is on their agenda for many reasons, including lower costs and capital expenses; accelerated time to market; compensation for lack of internal staff; and improved quality. In search of these goals, outsourcing may be a suitable solution. However, as with any new business endeavor, there are trade-offs. Here are five major risks that organizations should consider in planning and executing an outsourcing strategy.
1. Cost expectations. For several years now, outsourcing proponents have claimed that IT work costing $40-$80 an hour in the United States can be done for $15-$25 an hour in India or Russia. If those figures sound too good to be true, it’s because often they’re not. An offshore team often will not become productive (by onshore standards) for at least three months, or even longer for complex projects. Companies should expect to pay an additional 5 to 15 percent on managing an offshore outsourcing program, at least during the first year. The transition phase will add costs, too — planned expenses should cover due …
Please log in or sign up below to read the rest of the article.
ADVERTISEMENTS
|
"If you would be a real seeker after truth, it is necessary that at least once in your life you doubt, as far as possible, all things." - Rene Descartes |