Offshoring...

I used to contract for a big OS and Office software company - they sent loads of work to India. After 2 years they brought a lot of it back to Europe - offshoring was no cheaper (in fact it worked out quite similar cost-wise once you factor in everything) and it's not that the quality was bad, it was more that it meant trying to discuss complex issues over VOIP when having 6 people in a room together with a printed schema and some sharpies was just more efficient.

Installation instruction scripts were followed to the letter, everything needed to be spelled out as you never knew who you would get doing an install or update - so you had to try to pre-empt all the failure modes and explain in bullet points how to roll back etc for each case. Sure, this is good practice by and large, but it meant UK engineers were spending hours writing these instructions each week when the patch was 2 minutes work and could only really be rolled back by those same engineers anyway as it required deep business knowledge.

They were also hit by the vendor creating and billing phantom employees, which really did not help, but is very hard to monitor.