tl;dr; = short term gain, long term pain and shareholders should beware - it's not cost cutting, it's cutting off your right hand
capgemini, accenture etc etc all have a similar outdated business model. They offer to replace a $100k first world engineer with a third world engineer for $50k. In the short term this looks good for the CEO - he's a bottom-line hero, just saved the company $50k x # engineers per year.
Long term, it's a mess.
The outsourcing company only pays the third world engineer $10k and pockets the $40k. This was fine a few years ago as there was a huge number of talented engineers in eg India, Philippines etc who really could do the job. Today it's not so easy. The cream of them have already emigrated to the first world on the back of their talents. The local job market has risen so that really talented people can't be found for $10k any more, so the bottoms landing on the empty chairs are attached to increasingly mediocre talent. The better ones move on quickly.
Add to that the difficulties of working with the time zone difference, the language problems, the cultural disconnect and the profound impossibility of communicating the intricacies of a mature IT infrastructure - and you get a project that is quickly going nowhere.
My direct experience of these changes (I've seen a few) is that the organisation keeps going on momentum alone for a few years - the existing old IT systems soldier on with only minor maintenance work being done, just enough to lurch from week to week.
No major development is possible because the talent that put the system together has been sacrificed - so the company fails to respond to new challenges and does not innovate. Unless the enterprise's business is completely unchanging, it's a slow glide path to oblivion - but the ground is just as hard for all that.
Now the really important thing is that by the time the shareholders realise the dirty deed they've been dealt, the genius CEO who gave them that short term gain has moved on to more triumphs elsewhere, no doubt at ever higher remunerations.