InformationWeek Spring Conference: Offshoring's Pros And Cons: Page 2 of 2

On the other hand, Dunbar noted that companies must be careful of the level of intellectual property that they entrust to any outsourcer. The work that Lilly outsources to its India-based employee contains low levels of the company's intellectual property. "We've kept higher-value work in-house," Dunbar said. "You've got to be careful about what you outsource because collaborators can become competitors."

Lilly avoided cutting IT workers when it outsourced work to India by retraining those workers to do other jobs. "People conclude that outsourcing is one of the worst things to happen to the U.S. economy," said Dunbar, who served as Lilly's CIO for four years until his promotion last year. But the way a company manages the outsourcing process and its impact on employees comes down "to a respect for people."

Still, the United States must also be wary of sending too much of its junior-level work to other countries because doing so could hurt the future of the country's workforce, Said Dunbar. "You can't sever the umbilical cord to the future."