Outsourcing in general, and software outsourcing in particular, has accumulated so many myths and legends in such a small time that I can only compare it with stories about UFO’s. Those myths mutate, and change colour, and sometimes even pass as best practices.
I am not pretending to know all of them, however after working in the industry for many years I have come across dozens of them and even (and I’m not proud of this one) most likely did participate in creation of at least a couple.
Here is a small and humble attempt at redemption; I hope you will read this with your sense of humour switched on.
Myth 1. Offshore costs are so low you save 80%.
If you look at pure cost per hour, then this is probably the number you will see on your calculator. However, you should be prepared to find out that when you add the cost of management, your time to monitor the process, and the fact that cheapest developers rarely are the best ones, you will save 25-45%. This is still a very good number, mind you.