A question many executives are asking is "how can we tell whether our offshoring efforts are delivering value to our company?"
While you pay offshore vendors much less than what you would be paying a U.S. vendor, some members of your staff complain that offshore productivity is really low, that 2 or 3 offshore personnel are doing the same work that used to be done by one experienced person in the United States. And that’s not all: offshore outsourcing entails additional costs for travel, communications, and duplication of equipment and/or software tools, to name just a few expenses. At least some of your staff may be implying—or even loudly proclaiming—that offshore outsourcing is not saving money after all and that it was a bad idea. Even if offshore outsourcing may have saved you money in the beginning, it may not be doing so any longer. After all, offshore labor costs also tend to escalate over time.
The cost of offshoring isn’t only about money; it’s also about perception. If, for example, your management team must work into the night and arrive at work in the early morning to manage offshore projects, their perception about who is benefiting and who is hurting becomes personal. While added stress on your domestic staff should not be ignored, the way to address this issue is to develop an objective view of all facets of costs:
