Most global executives know by now that offshoring can deliver more than just labor cost savings. A good offshore strategy should also generate new revenues, increase capital productivity, and manage risk in ways that would be unaffordable in home markets. (For a look at how offshoring plays out in the pharmaceutical industry, see "Pharma leaps offshore.")

But in many sectors, relatively few executives are acting on this knowledge, even though leading companies are showing where the gains can be made. One reason for the lag is that many executives don't fully recognize the potential for generating revenues and cutting costs through offshoring—or through broader strategies that combine it holistically with other restructuring initiatives.

Take the airline industry. A carrier with $10 billion in annual revenues could save about $100 million a year by offshoring labor-intensive tasks (such as reservations, the administration of loyalty plans, and customer care) to a region with lower labor costs and comparable or even higher-quality talent pools. Today most multinational companies with significant operations in developed nations have analyzed the cost-cutting opportunities that offshoring can provide and understand them well.

Most companies also recognize that, in theory, utilizing this same lower-cost labor can allow...