Offshoring has become the management fad of the moment; the innovation du jour; the accepted reaction to cost pressures; or before 2000, during the technology boom, the reaction to labor shortages in industrialized nations.

Does any of this constitute a strategy?

In order to begin answering this question, the notion of “offshore strategy” needs to be qualified for each company. It needs to be seen in a broader context and not in isolation. First, for medium- and large-sized companies, offshoring is part of a broader globalization strategy. Second, also for medium- and large-sized companies, offshoring IT is just one part of the larger scope of knowledge and service activities that companies source globally, along with IT-enabled services (ITES) and research and development (R&D) of all kinds. Thus, strategic offshoring is, but, part of an overall sourcing strategy which deals with the portfolio of strategic options: whether these options be at home, abroad (in both high-wage and offshore nations), inside the company, outside the company (outsourcing), and through various collaborations.

Accordingly, an exacting definition of IT offshoring strategy:

Admittedly, few companies take such a holistic view of their offshoring strategy. Most companies offshore with a more isolated set of goals, and with a shorter time horizon, in an evolving, or even reactive strategy.