By Joe Hogan, Managing Director, Alsbridge, Inc.
David Mitchell, Managing Consultant, Alsbridge, Inc.
In a typical offshore outsourcing arrangement with a US-based client, the service provider must pay for personnel and non-personnel expenses in one currency (e.g., Indian Rupee - INR), but collect the services fees in another currency (e.g., US dollars - USD) creating a currency risk between the provider's service expenses and the client's fees.

This research paper discusses how to manage the currency risks involved in an offshore outsourcing agreement.