As far as "does it EVER work" concerned: it does. It doesn't work well though. Most people can run, doesn't mean that most people can run as fast as Usain Bolt.

As far as "does it EVER work" concerned: it does. It doesn't work well though. Most people can run, doesn't mean that most people can run as fast as Usain Bolt. More at http://stackoverflow.com/questions/502995/offshoring-does-it-ever-work http://stackoverflow.com/questions/502995/offshoring-does-it... Amongst other things, writing killer software depends on two pre-conditions: - Intimate knowledge of the domain, being at ease with the tools, identifying yourself as part of the group people (field) working in the domain. This is enabling factor. - External pressure or demand on the domain to change. This is a motivating factor. Outsourcing more often than not gets it exactly the other way round: - Outsourced organisations are not exposed to the natural external pressure or demand exerted on the domain, they do not identify with the domain. Instead the motivation is extrinsic: KPI’s, money and formal contracts.In other worlds they don't feel the users' pain. - External teams lack intimate state-of-art knowledge of the domain due to informational asymmetry; they don’t directly work in the domain but provide services to the domain. That is to say they are less able to push state-of-art forward, but would rather produce more of the same. Due to the lack of information they work in a permanent haze, not being sure what the valid thing is and this creates a lot of unease, reduces amount of positive risk taking, and cripples creativity. Real advantages that software brings to the table in any business is through gains in effectivness not efficacy.