I work for a company which has embarked for the last 18 months or so on outsourcing significant parts of its’ business; indeed the contract this company has signed is one of the largest completed to date.
As a result of that, the business has seen much change and an influx of folks from India has ensued; We have had to deal with a number of issues, from cultural to communications but I think it’s been reasonably successful in terms of transition – although not so much for the company’s PR, nor the staff that have been “downsized” from this outsourcing. Outsourcing definitely has its’ place if done the right way.
That being said, I think the company has been too aggressive in its’ approach and this will come back to haunt it – client service has already been affected and the time to effect work has been increased – the outsourcing company admits it will take their employees 1.8 times longer to achieve the same types of tasks (average).
Now the real danger of outsourcing
All that I’ve mentioned to date is pretty minor compared to what China has in store for us, if this article is to be believed. Because we outsource a significant amount of microchip production – most of which is conducted by China, it’s alledged that China has the ability to hack into pretty much any computer – IBM, Toshiba, Dell, Apple… they all use chips manufactured in China.
“It is there, deep inside your computer, if they decide to call it up,” the security chief of a multinational corporation told The Investigator. “It is capable of providing Chinese intelligence with everything stored on your system — on everyone’s system — from e- mail to documents. I call it Call Home Technology. It doesn’t mean to say they’re sucking data from everyone’s computer today, it means the Chinese think ahead — and they now have the potential to do it when it suits their purposes.”
Worrying eh?
Paul's Thought Emporium 
Whoa. I thought I was the paranoid one. There are so many facets to outsourcing that it is unreal. Thank you for writing this.