Adding Value Through Offshoring

For decades, offshoring involved little more than moving call centers to countries with lower labor costs. But things have changed. Today's new generation of offshoring increasingly features value-added services, such as highly complex software projects or specific R&D functions. These changes are forcing companies to rethink their internationalization strategies in order to incorporate more of these kinds of value-added offshoring processes. In this article, the authors discuss the risks and opportunities that managers must consider when offshoring, and they propose six steps aimed at creating value rather than simply reducing costs.