If you are in a low-margin industry (e.g., retail), a low-revenue growth industry (e.g., chemicals) or in one where prices are continuously declining (e.g., high-tech) then software development outsourcing is no longer a “nice-to-have” but a “need-to-have” strategy.
Offshore outsourcing is a logical fit for companies that have exhausted other traditional cost-cutting measures such as Six Sigma, Lean, or automation. For these firms, offshore outsourcing becomes the next tool or method for reducing operating costs while meeting customer demands, without overextending corporate budgets.
But the nature of what can be successfully offshored is very much dependent on the level of management sophistication in the firm. For companies with limited experience, we have found that the specific services that work best offshore are low risk and noncore to the business. Typically, they are labor intensive, structured, repeatable, and nonproprietary. Within IT, this might include software and application development or systems maintenance. Within financial services, processes such as accounts payable and receivable or general accounting. In customer care, repeatable call center services work best.

Source: http://www.journalofbusinessstrategy.com/articles/OffshoreOutsourcing.shtml

This article is powered by A-1 Technology, an offshore outsourcing company.