Companies including HSBC and Aviva were among corporate giants who cut tens of thousands of jobs that way.
Now, a spokeswoman for Norwich Union says it goes both ways. "We are constantly looking at the mix of work we have offshore and on," she said.
IT services firms have positioned themselves to take advantage of the changing philosophy, with both British and Indian companies looking at ways to straddle both markets. LogicaCMG, an IT services firm widely criticised by analysts for not expanding offshore when others did, is now setting up an outsourcing division in India.
Its strategy is to keep so-called 'voice' services onshore, while placing internal services such as accounting and billing offshore.
Meanwhile analysts expect big-hitting Indian outsourcing companies such as Tata Consultancy Services, Wipro and Infosys Technologies to look for more opportunities in the UK, or risk losing out on the growing trend towards both on and offshore outsourcing.
"What these companies have is scale, but no presence or base onshore. They need to make a customer-facing acquisition," said Landsbanki analyst Michael Donnelly.
He added that LogicaCMG was known to have recently beaten one of the Indian firms to a major contract due to its presence onshore in some major European markets.
"Customers are looking for the front end capability, but are looking for the price point too," new LogicaCMG CEO Andy Green said at the group's results last month.
The value now seen in having a foot in both camps became apparent last summer, when French IT provider Steria bought British rival Xansa for around 472 million pounds -- a 70 percent premium to its share price the day before it said it was in talks.
Xansa was the first British outsourcing company to expand into India, buying a firm called IIS in 1997. It is now in the forefront of a trend towards a mix of offshore and onshore outsourcing work.
