Risk and reward have always been major factors in offshore outsourcing. The trick, of course, is to mitigate the former while maximizing the latter. Security has been a major concern after 9/11, with companies becoming edgy on offshoring software programming work to countries perceived to be in "risky" zones. Besides this, the backlash offshore outsourcing has created in US/Europe due to fear of job losses and rising unemployment, has put companies in a piquant situation. On one hand are these 'threat' factors, while on the other hand, it is the enormous pressure to have software development of applications management done in Bangalore or Beijing. "Business imperatives are real," says neoIT CEO Atul Vashistha.

With such an 'imperative' force pushing for outsourcing, business realities become vital. While it is not possible to bulletproof an outsourcing relationship, setting realistic expectations, identifying multiple hot sites to operate from, and having a robust governance model become mandatory. This article examines such ideas vs actions, what problems a buyer faces in offshore outsourcing, and factors that sets apart a few strong supplier countries from other players.

In light of current world events, neoIT has worked closely with offshoring clients to assure business continuity plans are in place. While many clients already had disaster recovery plans in place before September 11, 2001, the urgency to implement those plans became a priority. In some cases this involved establishing alternate, or back-up sites, where work can be shifted if needed. In other cases, neoIT helped clients evaluate and source work to multiple locations in order to spread risk rather than concentrate operations in a single location.

The impact of the war in Iraq has further increased the sense of urgency for this type of planning and has caused clients to accelerate contingency plans and increased the pace with which these plans are implemented. Yet, as in any good business planning, the fundamental principles for offshore outsourcing still apply: have a disaster recovery and business continuity plan, perform offshore sourcing in multiple locations in multiple countries and ensure that local management is engaged in the planning and implementation process. In these times, we urge our clients and suppliers to exercise caution and review and test their business continuity and disaster recovery plans.