Organizations worldwide recognize that to compete effectively, it is essential to concentrate on what we do best and where we can add value, rest all the processes should be outsourced. With this, offshore software development has become a strategy for most of the companies. It is no longer just a means of reducing cost, but a tool for adding value to business and specilization. It enables organizations to concentrate on their core business, carry out business re-engineering and provide timley and accurate information.