Several factors have contributed to dissatisfaction with offshore outsourcing agreements, says Tom Weakland, a managing partner at DiamondCluster. Fierce competition for top talent among offshore providers has led to increased employee turnover, and the type of work that customers are sending overseas is becoming more complex. Both of these elements are leading to a rise in troubled projects and missed deadlines.

Moreover, because the number of offshore providers has risen dramatically, buyers are facing increased risks, such as the possibility of vendor financial instability or the inability of new entrants to attract and retain top talent at low costs.

And customers often underestimate the changes wide-scale outsourcing deals can entail. "You're talking about complex business change and transformation," Weakland says.

It's not surprising that PricewaterhouseCoopers reported similar results in a study released in September. The firm surveyed IT and business executives at 156 financial services firms, and only half of the respondents said they were satisfied with offshore providers, citing problems with cost overruns, staff retention and cultural differences.

But dissatisfaction doesn't seem to be slowing the offshoring trend. In the PricewaterhouseCoopers survey, 74 percent of the respondents said they plan to increase their use of offshore contractors.