My company has always avoided, and still avoids, outsourcing (at least beyond a half hours drive!).

Handing over mission critical development to a remote location, in a different culture, seems to me to be asking for problems. How do you control IP? Security? Basically - you can't.

A bit like asking all those great programmers in China to develop Britains defense software ("well, they were the cheapest quote, sir!").

Best way, is to create a very good, small development team in-house and pay them what they are worth. This should usually be on a par with the directors and board members!!