Over the past 15 years, companies have outsourced to a handful of cities in India, China and Eastern Europe for offshore service functions in hopes of reducing costs. costs and gain a strategic advantage. Unfortunately, many businesses have experienced mixed results as these popular spots face several issues. However, companies can benefit when they choose the right processes to outsource, assess operational and structural risks, and adapt organizational forms to their needs. Ranking Processes by Value Many companies focus their efforts on choosing countries, suppliers, and negotiating prices, but do not spend time evaluating. what services they should and should not outsource. Without a standard differentiation methodology, it can be difficult to distinguish between products that companies should control internally and those they could obtain from overseas suppliers. It is essential to determine how each product helps companies create value for customers and capture that value for themselves. Products, which vary by company, must be ranked between these two criteria, then added 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 company's strategy. This provides managers with the appropriate information to determine the most desirable products or processes to consider for outsourcing. Identify and manage risks Many organizations do not consider all the risks that come with offshoring. A simple cost/benefit analysis is often not enough, as it ignores many of the latent risks involved. It is essential that companies are prepared to face major risks, operational and structural, which could affect their projects abroad. Operational risk may arise from the fact that the offshore service provider's employees need a lot of experience or product knowledge to operate successfully at the necessary level. However, these problems can often be overcome with comprehensive documentation that specifies the exact steps and procedures that must be performed in each situation. Other operational issues concern the metrics companies use to measure the quality of outsourced work. In many situations, companies will formulate indicators for the first time when they choose to offshore or fail to establish indicators at all. The best solution is for companies to create indicators, measure the quality of their processes and use continuous improvement internally before deciding to offshore..