Understanding
I once worked with a Chinese team on a credit card system. I was a contractor to the UK company that has outsourced to China. They had delivered a product the just did not work. When ask "Who has a credit card" no one raised their hand, when asked "Who knows what a credit card is" same result! Its no wonder the project failed, no one on the development team understood the problem. Understanding is paramount but is predicated on shared experiences. You might know what the words mean but not what is being said.
International
When things go bad what recourse do you have? It can be difficult and extra expensive to seek legal redress from a foreign company.
Local facilities
Depending on the project complexity more or less local support is required, never no support! Some offshore companies employ agents to act on their behalf (see accountability). To understand complex systems human beings need to experience them. As soon as you take a system out of its environment you change the system.
Acountability
Who is accountable for decisions of the offshore team? If you are talking to the local representative do they need to refer back to the Offshore management, if talking to the offshore management do they need to refer to the local team? Do you go round in circles ?
All the above have been issues seen or experienced in many offshore projects, Not all projects that have these issues will fail, most however will fall short of their potential. What the solution? There are two.1/. Build or buy the expertise to run an offshore project.
2/. Get the benefits off offshore with out the problems.
SHAMELESS PLUG ALERT! As you may have guessed 3B-Workshop is the option 2 solution, pop on over to 3b-workshop.com and see what we can do for you. END SHAMELESS PLUG ALERT! Sorry about that but I am very proud with what our team achieves for our customers.