Sending jobs overseas, or offshoring, is the subject of many business meetings across America. In 2001, offshoring was a $25.75 billion industry.

India is the country that leads the world in accepting outsourced business. They have been very receptive to embracing the concept of free trade and allowing the world's businesses to offshore jobs.

The amount of money that companies can save in wages is amazing. College graduates in India earn one-tenth to one-fifth of an American graduate. Other low wage countries include the Philippines, China, Russia and Eastern Europe, and Central and South America.

In a closed door industry meeting held in Houston representative Som Mittal of India, spoke of the virtues of relocating to that country. He emphasized that American and multinational companies can reduce the investment in equipment and increase or decrease workforces quickly as business dictates. By outsourcing computer coding, document scanning, customer-service call-center staffing and payroll processing companies can achieve a 20 to 25 percent gain in productivity. And, Mittal pointed out, operations can go on 24 hours a day because of the time difference between America and India. When one country goes to bed the other is rising.

However, the U.S. government is watching all of this and taking steps to curb the outflow of jobs. Today there are almost 20 bills under consideration both in Congress and at the state levels. Also, the Indian government is proposing to start to tax offshore related dollars streaming into and out of that country. Finally, he mentions the potential problems associated with sending intellectual property overseas.

The first decision a company needs to make in determining the outsourcing of jobs is to decide what type of business it wishes to ship overseas. The best types of jobs are the kinds which are repeatable or automated tasks which stick to strict guidelines. Credit-card balance retrieval and medical-record scanning tasks are examples.

Fifty percent of businesses fail after attempting to offshore, generally because they set up the business poorly, choose the wrong location, or they don't fund the operation properly. A lot of attention must be paid to the business once the offshoring of tasks has been started.

Another error that companies make is to put unrealistic expectations of cost savings on an operation. There is a common error of not understanding the salary differential between countries. In one example a senior executive expected a cost savings of 75% in his operation in India, but he did not allow for a 50% employee turnover. He was not quite competitive with the rest of the marketplace and as a result, employees were being lured away by competitors. A more realistic savings is in the 30 to 40% range and before a company considers investing serious money in the operation it should methodically plan the operation.

The second major decision is the type of presence the company wishes to have in the offshore country. There are two models. The first is called "captive," in which the onshore company has total control of the offshore business and over the quality of work performed. The second model is "shared services," which relies on offshore contractors to hire, manage and pay the foreign employees working on offshore tasks. It involves lower investment, but also less control.

Whichever model is chosen, the company must manage and monitor the offshore employees. Support from the onshore company is needed at every level. Experts say that it takes at least 6 months to cross-train managers and that there should be a stateside liaison for every 4 to 10 offshore managers.

The final point that experts emphasize is to understand the culture and be prepared to handle the differences. For example, weddings in India can have three months of festivities leading up to the lucky day. In a small community that can severely affect the number of people working.

There is a lot for a company to think about and plan for when considering a successful venture into offshoring of jobs. There is savings to be made if the company plans properly, has realistic expectations, and sends the right jobs abroad.