It is generally more difficult to manage remote employees than to manage on-premise staff. And as the distance grows, so do the costs and complications.
Bandwidth, long-haul flights, time zone differences and cultural and language barriers can cause operational glitches and eat up some of outsourcing's cost advantages.
An increasingly popular alternative among Silicon Valley companies, according to this SiliconValley.com article, is to locate outsourced jobs in the Western Hemisphere rather than in India or China.
Though details are hard to come by, the article cites HP and Intel as companies that are nearshoring, rather than offshoring, some of their technical support tasks. HP recently announced plans to double its workforce of 3,300 in Costa Rica.
Mexico promotes itself as a nearshore location that actually makes it possible for some U.S. executives to commute regularly to work.
Nearshore locations can also sometimes offer niche expertise that is simply not yet available in Asia or other far-flung locales. This CRM Buyer story says that Uruguay is popular among insurers, for instance, because of its strong finance and banking industry.
Adding nearshore sites to more distant offshore destinations can also improve operational resiliency, says Symphony CTO Jerry Smith in an IT Business Edge interview. A broad geographical distribution "reduces the risk of having everything at a single point in the value chain of the company," he advises.