Combining Agile software methodologies with offshoring / outsourcing is an effective solution for software development
This case study written by Jeff Sutherland concluded that a fully distributed Scrum has more value than localized Scrum:
Availability of talent
Scaling up/down with knowledge retention and without local layoffs
Shared ownership from the start
Decide architecture together
Get to know the client and domain
Norming session for the team
Form personal relationships
The results of the project described in the case study, are easier to reproduce using nearshore resources. The difference is team interaction.
The quality and amount of team interaction increases when you use nearshore resources within similar time zones and with people who can travel easily to have face-to-face interaction.