I have now being working on offshoring initiatives on and off for 3 years now. I have worked on defining processes for moving work from one location to another location, recruited offshore resources for a testing team, and managed that testing team on a daily basis.
Offshoring initially developed as a cost arbitrage policy for shipping work from high-cost countries to lower-cost countries. Despite the industry and employer spin of using Orwellian phrases like "Best Shore", the reality is that work is being moved from countries that are perceived as having a higher cost base to countries with a lower perceived cost base.
I believe the whole approach ignores the reality of the immaturity of the I.T. industry, which is really only 40 years old. Those of us with more than a few years experience know that the industry has faulty institutional memory, a terrible track record for learning from mistakes, fundamental blindspots that it seems unwilling to address (like using natural languages to try and define Requirements) and a woeful inability to manage delivery programs and projects to stay within budget and deliver promised benefits.
At the same time, the preferred offshore locations (India, China and Eastern Europe) are even more immature, with no long-term track record of supporting I.T. solutions, and a large number of enthusiastic, talented but inexperienced software developers and leaders. Just one example: when I was trying to assembled a software testing team last year for a U.S. client, I interviewed nearly 20 people from our India subsidiary. The oldest resource I interviewed was born in 1976, and only one candidate had more than 5 years I.T. experience. When I asked them about what they would do if a testing project fell behind schedule, their whole mindset seemed to be predicated on working more hours when issues were discovered, rather than trying to work smarter. Not one candidate talked about reviewing processes to determine if they could be made more efficient or effective.
Under the current offshoring model, we are shipping work out of one immature industry context to an even more immature context in a geographically distant country. If you performed a properly structured Risk Analysis on that proposed action, what do you think the results would be? Right now, the decisions being made are being based largely on cost arbitrage (day-to-day running costs) and fashion.
The sad reality is that Account Teams in I.T. Service corporations may also be conniving in this race to the bottom, by agreeing to contracts that require ongoing cost reductions within the framework of equivalent service. Are those cost reduction profiles supported by any empirical evidence that shows they are achievable, or is this based on the "we'll find a way" school of unsupported optimism? And are we simply following the herd? If we are, we are indeed condemning ourselves as a corporation to perpetual mediocrity. If you are a technical I.T. contributor, the bottom line is that the Account Team in most contexts no longer looks like your friend. They almost look like an extension of the customer, working for the "other side". This is terrible for corporate cohesion.
Anecdotally, a lot of offshore support teams are marginally capable of supporting solutions. Their overall lack of I.T. experience leads to a lot of onshore hand-holding from US-based staff. However...with the current US recession, this additional work is being largely hidden from view by requiring staff in the US to work "as many hours as is needed to get the job done", with the unspoken implication that team members who do not sign on to that work ethic will be removed and replaced by people who will. When the recession ends, this excessive rework and supervision may become more visible, as I.T. staff push back against working 14 hour days by changing employers. However, right now I believe that the negative issues associated with offshoring are largely being papered over by corporations whose leadership narrative is powerfully based around offshoring to save clients money. Any competing narrative that conflicts with that story will be unwelcome. Personally, I have been informed once already within my current employer by my leadership chain that messages from below to leadership that there are issues with offshore delivery and support are likely to be tuned out.
While discussing these issues with a fellow architect, he postulated that one idea that corporations should be looking at is to set up and nurture onshore "Dream Teams". We jointly defined a "Dream Team" as a small, highly skilled and experienced collection of highly motivated individuals, using extensive automation for software requirements gathering, development, testing and deployment. Such teams would be deployed in situations where quick response and high-quality delivery is essential. Many corporations have a lot of onshore individuals that could be members of one or more "Dream Teams". The main challenge with this idea is the current offshoring mindset in both my employer and our customers, where the answer to any issue appears to be "offshore it", and then everything is structured to get to that initial answer.
Here is an interesting article from a periodical which discusses the phenomenon of Backshoring - the return of work from overseas to the country from which it was originally migrated.
Since Backshoring is very much "swimming against the tide" and also represents an admission of offshoring failure by a corporation, I expect these stories to be largely hidden from view in many corporations.