Globalization has changed the way we live and interact today. The role it has played in the IT industry is enormous. Today a software development process can be handled by experts at a geographically remote place. Although many benefits are seen in outsourcing yet there are many challenges that also need to be considered. In the initial stages of getting offshore services it is important to consider all factors involved in order to avoid missed deadlines, budget leaps that ultimately affect the overall productivity. Very often the main challenge which is also the key factor is having a good communication and directing the expertise you are outsourcing in the right direction. The flow of communication must be smooth with regular checks and feedbacks from both sides. The time difference between the two sides can create confusion. The time difference may mean a few hours in which project participants are in office at the same time therefore there is time restriction that works as a negative factor allowing limited direct communication. There are many offshore services you can get but the important thing is to have your project on time and on budget. Another factor is the decreased monitoring of your project. With the project participants at the other end it is difficult to get accurate reports on work status. The feedback you get might not be as regular and clear as you would want it to be. It is difficult to have the status of the project checked until it presented for your consideration and it is then only then that you can check your concerns. When the project is delivered many companies report to have assembling problems or problems in the proper running of the application or development. This is the most challenging part when offshore development is integrated and when the implementation processes start some elements turn out to be incompatible. As the standards of measuring project accuracy, quality differs so do the results. However all these problems are not as big that cannot be overcome. There are companies successfully managing offshore development across the world and delivering productive fruitful results.