Over the past decade, Business Process Outsourcing (BPO) has become a usual business phenomenon arising from a new business strategy in the banking industry through the world. Banks are increasingly outsourcing their activities to third parties and relying more than ever on suppliers. (Deloitte, 2012) The Swiss bank UBS is no exception. Since UBS established the UBS India Service Center in Hyderabad in 2006, part of its back-office and middle-office functions were outsourced in subsequent years to lower-cost countries, such as India , China, the Philippines and Poland. The latest news indicates that UBS will begin outsourcing its fixed income trading platform to two technology groups in a bid to cut costs. (Reuters, 2014) However, amid the growing trend towards outsourcing, UBS announced plans to close its fixed income business and lay off 10,000 bankers by 2015. The job cuts represent around 15 percent of the 64 000 current workforce of the group. (CNBC News, 2012). When companies outsource work, they usually eliminate the department that previously did it. Although offshore outsourcing certainly poses more than two problems and management skills are required to overcome them, this report will examine the case of outsourcing the operations of the investment bank UBS and discuss two of them. challenges for management: UBS employees face an uncertain future and a loss of motivation; Offshore partners have different organizational or national cultures and the difference can lead to lower productivity. These are mainly two issues related to the implementation phase of outsourcing. Outsourcing is defined as the use by a regulated entity of a third party (either an affiliated entity within a group of companies or an external entity in the middle of paper). ..... result of the operation. In the case of Team A, English is not the first language in China and it is unrealistic to expect offshore workers to have the same level of understanding after the same amount of time of verbal exchanges or No. verbal communication as native speakers. Therefore, transferring knowledge and obtaining clear feedback may take longer. Different ways of interpreting something can even cause misunderstandings and have a negative impact on UBS's operational risks. work for a different company. In fact, outsourcing is a business relationship between two separate entities. The two entities have different values, visions, ways of interacting and ways of doing business. Just like notional cultural differences, organizational differences impact quality. outsourcing work. Despite cultural conflicts