Alsbridge, Canada, nearshore, outsourcing, offshoring, all-sourcing
Alsbridge: Canada offers attractive opportunies as a nearshore location
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Alsbridge, independent advisors on outsourcing, shared services, and offshoring recently completed several trips to Canada on client engagements and as part of their Fall 2005 Offshore Tour. The information gathered re-affirmed several well-known opinions and shed some light on the direction Canada is heading as a nearshore alternative to offshore locations such as Asia Pacific or Eastern Europe.
Canada offers a very mature offshore market serving the US mainly in the area of call centers and software development. Most of the usual suspects have large facilities serving the US to include IBM, EDS, and Keane; but so do the "Big 3" Indian providers (Wipro, TCS, and Infosys). It is the latter which offers insight into the growing trend of viewing Canada as the nearshore front end for a globally distributed offshore model.
Take Dell, Inc. for example…In August of this year, Dell announced their intentions to open a 500-seat center in Ottawa to compliment their existing centers in Toronto and Edmonton. Dell is adding this new center in addition to a planned 50 percent expansion at the Edmonton center from 500 to 750 seats. While at first glance it may appear that Dell has shifted their offshore strategy to focus on Canada, the expansion is actually part of their self-described "all-shoring" strategy. In fact, Dell operates more than 30 such contact centers around the world and plans to open their first customer call center in the Philippines in February 2006 with an initial headcount of 700 agents.
US organizations will continue to see Canada as an attractive location for a variety of reasons to include: a moderate labor arbitrage, proximity to US markets, good language capabilities, flexible professional immigration regulations, and the availability of skilled labor in key locations. However, offshore locations such as India, China, the Philippines and others will continue to offer significant cost savings over Canada with negligible difference in service delivery for most IT and BPO endeavors. Recognizing this fact, Canada is taking steps to position itself in more complex sectors such as HR Outsourcing, niche IT development, and R&D services. The offshore market continues to evolve, and Canada will likely continue to play a vital role as a nearshore component in global offshoring strategies.
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