Handy write-up of a Gartner session on offshore outsourcing by TechTarget writer Mark Brunelli here. The most important piece of advice: "'A lot of offshore engagements actually get into trouble because of a lack of communication,' [speaker Michael] Montonen said. 'Be honest and upfront about what you're doing, and be honest about the business reason for doing it.'"
In my experience, managers (especially those in the executive tier) have a great deal of difficulty being honest, particularly when the news is unpleasant or may provoke confrontation and disagreement. Good advice; tough to implement.
Another useful tidbit: "Before shopping around for overseas suppliers, companies should develop a business plan that clearly explains the business drivers for the initiative."