"Internal people will refuse to transition to the offshore model because they have a certain comfort level, or they don't want their buddy to lose his job," Renodis's Manivasager says. "There has to be a mandate. Trying to build consensus can take a very, very long time." Manivasager has seen some relationships take as long as three years to get off the ground because the strategy was neither shared with nor embraced by employees.

Bottom line: Expect to pay an extra 3 percent to 5 percent on layoffs and related costs.

The Cultural Cost

One of the biggest impediments to offshore savings is productivity. "You simply cannot take a person sitting here in America and replace them with one offshore worker," GE Real Estate's Zupnick says. "Whether they're in India or Ireland or Israel."

One reason for that is the American workers' comfort level with speaking up and offering suggestions. "A good American programmer will push back and say, What you're asking for doesn't make sense, you idiot," Zupnick says. "Indian programmers have been known to say, This doesn't make sense, but this is the way the client wants it." Thus, work takes more time and money to complete. And a project that's common sense for a U.S. worker - like creating an automation system for consumer credit cards - may be a foreign concept offshore. Additionally, offshore vendors often lack developer experience (the average experience of offshore developers is six years).

On average, IT organizations going offshore will experience a 20percent decline in application development efficiency during the first two years of a contract as a result of such differences, Meta Group Vice President of Service Management Strategies Dean Davison says. According to Meta Group, lags in productivity can add as much as 20 percent in additional costs to the offshore contract.