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From "Who Benefits from Outsourcing? Not the Line of Business":

The Deloitte study also debunked several other oft-claimed benefits of outsourcing. For example, proponents frequently claim that outsourcing can free up internal company staff to focus on projects that deliver more business bang-for-the-buck; for a majority of respondents (57 percent), this wasn't the case. In fact, because of the increased management overhead associated with the outsourcing model, many companies said this was impossible.

This is far from surprising to most IT pros, of course.

"This project [I'm now on] has been joked about for staying mainframe, but the cost savings over implementing this in 'newer technology' will be in the tens of millions of dollars," says Cave. "If it were the outsourcers alone, they would probably just do as desired by upper management and build a whole new subsystem. But once [management] was presented [with the cost estimates], they realized that the numbers don't lie."

I haven't posted about offshoring/outsourcing in awhile. Whether your outsourcing to another campus in your own company or to a different company across the globe, we've known for years that distributed development and IT-work makes things more difficult, slow, and costly.

If your people aren't in the same room, or barring that, the same floor in the same building, you won't be as productive as possible, nor make as much money as possible. (Granted, if you have a bunch of those Hero-monk types, they might need their own office and 7 months on a steady diet of flat-foods.) You'll end up with some horribly distributed monstrosity, whose parts will barely be able to talk or work with each other. Just like your people, all spread out across the world.

This is a fact of programming and IT. End of story.

(If you can figure out how to get around this fact, there's vaults of gold waiting for you.)