Over the past 15 years, companies have outsourced offshore services to cities in India, China and Eastern Europe in hopes of reducing costs and gaining a strategic advantage. Unfortunately, many businesses have had mixed results as there are several issues plaguing these popular locations. However, companies can benefit when they choose the right processes to outsource, evaluate operational and structural risks and adapt organizational forms to their needs. Classify processes by value Many companies focus their efforts on choosing countries, suppliers and negotiating prices, but do not spend time evaluating which services should and should not be offshored. Without a standard methodology for differentiation, it can be difficult to distinguish between products that companies should control internally and those they could obtain from foreign suppliers. It is essential to determine how each product helps companies create value for customers and capture that value for themselves. Products, which vary from company to company, should be ranked based on these two criteria and then added together to arrive at a total ranking for each. Using this methodology allows companies to create a hierarchy of values: the higher the ranking, the more crucial it is to the business. business strategy. This provides managers with adequate information to determine the most desirable products or processes to consider for outsourcing. Identify and manage risks Many organizations fail to consider all the risks that accompany offshoring. A simple cost/benefit analysis is often not sufficient as it ignores many of the latent risks involved. It is essential that companies are prepared to address major operational and structural risks that could affect their overseas plans. Operational risk may arise from the fact that the offshore service provider's employees need a great deal of experience or product knowledge to successfully operate at the necessary level. These problems can often be resolved, however, through thorough documentation that specifies the exact steps and procedures to perform in each situation. Other operational issues concern the metrics companies use to measure the quality of outsourced work. In many situations, companies will formulate parameters for the first time when choosing to offshore or will fail to establish any parameters at all. The best solution is for companies to create metrics, measure the quality of their processes and use continuous improvement internally before deciding to move abroad..