As many US companies have learned, there can be significant challenges with traditional offshore outsourcing to countries in Asia, such as India or China.

• Extended work days - Only a few hours of overlapping time exists between teams, either late at night or early in the morning, making a regular work day extend into a 12+ hour day. Additional hours increase the cost of the engagement and can erode employee morale.
• Communication breakdown and miscommunication - If an idea is missed or an issue misinterpreted, developers have to wait until the next day to clarify the problem and then wait another day to see if the offshore team understood the idea correctly and delivered accordingly.
• Minimal real-time communication - Simple communication has to be done over e-mail with 8-12 hours between responses.
• High Turnover - The best engineers aspire to higher paid positions at companies with the best career paths, such as captive offshore development centers (CODCs) of brand name companies like Google, Microsoft, and the major outsourcing firms, such as Infosys or Wipro. Furthermore, many of the best engineers aspire to management, so they may not focus on mastering one particular technology, which makes depth of expertise harder to find.
• Attitude - The offshore team may not assimilate the sense of urgency to get the job done or share the same enthusiasm, passion and quality vision for the product.

The overhead of doing business offshore can be high, but outsourcing is about saving money. That is why Nearshore outsourcing is now the most viable alternative for many companies.