Didn't work. Complete disaster, in fact.

I reckon you could make it work if the work being outsourced:

(a) requires no domain knowledge
(b) can be completely defined in a formal specification
(c) requires no specialist knowledge or skills
(d) doesn't have strict time constraints

...and, to be fair, that might constitute quite a lot of programming work for some companies. All four criteria were not met by what we tried to outsource, and the experiment fell flat on its arse.