Outsourcing is a fact of life. Most companies - whether they choose to outsource work to outside vendors or a captive center of excellence (COE) in their home country, or whether they choose a foreign entity or a captive COE in another country (commonly known as offshoring) - find that it may make economic sense to outsource a host of business processes and application development work. There's a great deal of political debate these days about offshoring, particularly in the U.S. However, no matter what your opinion is (pro or con), the stark reality is that development costs in host countries are often substantially lower and - especially in the case of India - the pool of talented workers is almost endless.

The cost savings associated with offshoring come with substantial risks - particularly when the offshoring arrangement is for application development work. Consequently, finding a way to control and reduce the risks of offshoring has become a priority for companies that choose to move application development work offshore. Plus, the more complicated the application development work, the more complicated the risks in most cases.

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