Outsourcing does not guarantee cost savings. Typically, it is a short-term expedient and most of the benefits accrue outside of the company. Here are some common global outsourcing problems:

• Cost Expectations: Wage comparisons do NOT equate to cost savings.
• Transfer costs: It takes time and effort to transfer knowledge.
• Security: High risks of information technology security breaks.
• Knowledge and Intellectual Property: Loss business process secrets.
• Product Safety: Regulations are far less than US or Europe.
• Corporate Culture Change: Major miscommunications caused.

A more enlightened, strategic view of global sourcing is starting to emerge as managers get a better fix on its downsides as well as potential. The new buzzword is "transformational outsourcing". Many are discovering that outsourcing is really about corporate growth - making better use of skilled US staff, typically locally outsourced; not just cheap wages abroad.

The cost savings from global outsourcing are small compared to the enormous gains in efficiency, productivity, quality and revenues that can be achieved by fully leveraging local talent.