Many firms that outsource want to reap all the savings from cutting costs on developers without accounting for the additional overhead they’ll need to manage developers who aren’t right down the hall. All the informal code reviews, requirements clarification, etc. that was done real-time and face-to-face must be made explicit and conducted remotely…often across multiple time zones. Furthermore, the project management performed by the outsourcing company is done for the benefit of the outsourcing company, not one’s own firm.
This overhead can only be ameliorated a bit with tools and technique: there is effort inherent in making inarticulate or tacit knowledge explicit. My heuristic is to add from between 25 and 33 percent more project management effort (beyond the typical in-house estimate range) to such projects.
From my comment on a long-standing LinkedIn post, this one on outsourcing QA.