One of the reasons outsourcing happens is not to get cheap labor. Individual developer cost do seem cheap, but adding the culture cost (like India, where low p

One of the reasons outsourcing happens is not to get cheap labor. Individual developer cost do seem cheap, but adding the culture cost (like India, where low productivity is generously tolerated and bad people are kept around) and the communication cost(time lag, people not understanding the requirement, distance from the customer) brings the total cost of the team to be nearly at par with the cost of the American team. It is not that the management at the large companies cannot see it. They do it prevent wage inflation in America. If they can get comparable work( and you can get it from India if you manage it right) at nearly the same cost, they reduce the demand for similar jobs in America. As to the specific answer , yes it does work. However, you need a strong management that focuses on results. I have seen projects outsourced with no clear goals handed to the offshore team. They invariably fail (despite the team being reasonably smart) because the team was not working towards anything tangible.