Northwestern uses Indian outsourcing firm Infosys Technologies Ltd. for a variety of tasks. At the time, Zwieg was in constant communications with executives at Infosys about backup, preparedness, and the political situation. Zwieg was assured that there would be no interruption of service, and it turned out those assurances were correct. Now, business is back to normal, and Zwieg says he isn't considering going elsewhere.

That's good news for Indian companies, which have attained a leadership position in offshore outsourcing based on a reputation for high quality, low cost, and meeting deadlines.

Indian developers are highly meticulous in their documentation, release planning, and metrics, says Stephanie Moore, a Giga Information Group analyst. "Nobody tests better than the Indians," she says. And the legacy of British colonialism means widespread fluency in English and a rigorous Western-style education.

Another factor: U.S. outsourcing companies simply can't compete with the rates charged by Indian outsourcers, which average $22 to $35 an hour.

For many businesses, outsourcing overseas is a step-by-step process. Business-technology managers often test the waters with a small assignment or project. If that works out well, more work is sent overseas.

Nielsen CIO Ross advises business-technology managers to be cautious but not afraid when hiring an offshore outsourcing company. Start small, he says, then give the company additional responsibilities.

That's the way it worked at TV ratings company Nielsen Media Research. CIO Kim Ross first hired Cognizant Technology Solutions Corp. in 1995 to supplement his own staff with an offshore team. That approach provided the easiest entry and the most control, Ross says. Over time, Nielsen added projects--first maintenance and, eventually, new development--that gave Cognizant more project control. Now, Cognizant is "sort of an extension of our own organization," he says. "We'll look at a project that's more stable in its life cycle, or even a new project, and ask, 'Is this something Cognizant could do?'"

That comfort level took awhile to achieve, Ross says. But now, "we can know the fixed price of the whole life cycle." Nielsen negotiates a fixed price for the first phase of development and only then negotiates the next phase of staffing and maintenance. Today, the level of comfort with Cognizant is such that Nielsen outsources some of its most innovative projects that embrace the newest technologies.

For example, a project to manage data collection for all 13,000 U.S. local cable systems is being developed. For each system, Nielsen needs to know what ZIP codes are being served, what network is showing on which channel number, and other service information. "It's a huge data-management task," Ross says. Nielsen wants to store the information in a relational database that a Web browser can access. Like other projects Nielsen hands off to Cognizant, Nielsen creates the requirements, retains a supervisory role, and does quality assurance itself. But Cognizant takes on the bulk of the project, and Ross expects Nielsen will save 30% to 40% over doing it in-house.

When considering an overseas service provider, Ross' advice is to be cautious but not afraid. CIOs should "focus specifically on why this company would know your business well enough to serve you," he says.

But it doesn't have to be an all-or-nothing proposition, either. "There are good ways to sneak up on it," Ross says. "You can enter by mixing your staff and offshore staff on a project or by starting with a stable, well-run application." Once that's proven successful, consideration can be given to additional or more intensive projects.

Not every CIO is eager to embrace the idea. Jane Landon, VP and CIO at Prudential Insurance Co. of America, describes herself as a reluctant convert. Landon got into offshore outsourcing because she was given a project that had to be completed in seven months, and she faced penalties if it wasn't done on time. It also would have put her in front of the chairman of the board to explain the missed deadline. So she put six key staffers on the project and outsourced the rest. The results were good, and now offshore outsourcing is a regular part of her IT operations.