The rumors have begun to swirl at your company: The CEO is exploring offshore outsourcing of some company operations. Where is he getting his information? And what is he likely to hear from consultants and colleagues?

Given the strong feelings surrounding the so-called offshoring trend, executives glean information from hired consultants, fellow executives, white papers and industry conferences.

If you may be affected by an outsourcing decision, knowing what consultants and other execs are telling your boss may not be reassuring, but it will help you understand their perceptions of the current IT job market.

What's Best for the Company?

Consider this: When Phil Verghis, a former executive at Akamai Technologies and an expert on outsourcing, speaks to C-level executives from the US and other Western nations at a forum in Bangalore, here's what he'll tell them: "If you're not looking at offshoring, you're doing your company a disservice."

But thinking about offshoring is not the same as launching an offshoring effort, says Verghis, who is now president of the Verghis Group. His advice outlines a host of issues executives need to consider as they mull a decision: How will your US-based employees react? What about privacy and intellectual-property concerns? Will offshoring play a role in your company's compliance with US laws? Will geopolitical issues and conflicts interfere with your efforts?

Not an Open-and-Shut Case

While reports in the mainstream press sometimes oversimplify the issue, the decision is typically a complicated one, requiring executives to study the pros and cons.

"The press does present this as an open-and-shut argument, as if executives quickly look at the numbers and then make a call to offshore services," says Marl Kobayashi-Hillary, author of Outsourcing to India: The Offshore Advantage. "Most firms that look at this option will have spent 18 months to two years planning the move."

Companies must consider a variety of factors, from the location of offshore operations to whether to partner with an established firm or create a subsidiary. "What is often forgotten is that there is a considerable risk in going offshore," says Kobayashi-Hillary. "It can go wrong and processes can fail, so the company has to plan carefully."

Shaping the Decision

By the time executives begin to contact consultants or vendors, they have likely had their views shaped by the voluminous amount of research on offshoring. The main sources of information, according to outsourcing consultants and executives, include industry white papers and reports, from the likes of Forrester Research and META Group, as well as reporting in trade publications, such as CIO and Computerworld.

A virtual cottage industry now churns out research about the intricacies of offshoring. These white papers, research reports and webcasts, from both independent research firms and software companies, present data and analysis with titles like "Keeping Offshore Development on Track" and "Offshore Sourcing: Undertaking Internal Due Diligence."

At the Start: Cutting Costs

Jonathan James, vice president of marketing for Syntel, a global outsourcing firm, says investigating offshoring options often begins with a CEO or CFO asking a company's CIO about cost savings after having read widespread reports of reductions in IT project costs of 25 to 40 percent.

Company executives feel the pressure to cut costs and offshoring consultants know this. The Syntel home page makes it explicit: "If you thought your competitors would slow their IT spending until they had bigger budgets, you better think again. These days, many of them are likely to be spending smarter, not slower. The move to offshore is undeniable."

Along the Way: Employee Issues

But once executives begin to explore the issue, they often turn from financial analysis to more varied concerns such as employee morale and supervision of offshore workers, plus the specific applications and systems to outsource, says James. His company increasingly plays a role in the psychology of offshoring for US companies, helping them discuss and manage the ways offshoring affects US-based workers.

At the Finish: No Hasty Decisions

While companies may be eager to explore offshoring, they typically do not make hasty decisions, according to Kobayashi-Hillary. "I have never seen a rush to do this," he says.

Read More About Offshoring

• “The Offshore Battle”
• “Are Tech Jobs Headed Offshore?”
• “If Offshoring, Then What's Next for Techies?”
• “Techies Sound Off on Offshoring”
• “The Offshoring Wave”