I have been thinking about the hoopla around Global Delivery of Software and Management of Outsourcing Initiatives. Global outsourcing is here to stay, there are no qualms about it. Simple business case is Cost and productivity benefits that helps to seize the competitive advantage. These benefits seems to be real, but often becomes challenging to materialize. The problem starts where the rubber meets the road. Top 4 in my opinion are:
1) In rush, corporations opt for outsourcing or service providers grab every opportunity without pondering about the disparity in process maturity between service providers (Offshore) and customer (Onshore). Service providers are on the higher side of CMM/CMMI (with most of them being at level 4 or at level 5) whereas outsourcers typically arent at that level.

2) The case of requirements gathering. Service provider's team almost always struggle with specifications ambiguity and constant changes. Project managers on both the sides often struggle to ensure that project priorities are clearly understood and changes to the project plan are clearly agreed upon and communicated at every level, not just at senior management level but also at the lower level.

3)Inadequate Information to the team: Most of the time, resources have very narrow understanding of the bigger picture because it isnt easy to communicate every information that clearly describes the project, what is needed to meet business objectives, risks/issues involved and schedule/milestones/deliverables. Often, critical information is localized only to the project managers or project leaders.

4)Outsourcers as well as service providers often doesnt align themselves to a commonly understood IT process maturity which typically include aggregation of standardized methodologies; continuous process improvement practices; project management skills; change control procedures; portfolio management and service-level agreements.

The 4 challenges that I have mentioned can only be taken care of if teams on both the sides have 24x7 access to the project/process information and work on the same workbench. Lack of readiness in any of these areas will result in lost productivity, repeatitive change and a suboptimal result.