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CCCA_V2No2_Outsourcing-FIN.qxd:CCCA_V1No1_DriversSeat-FIN.qxd 5/1/08 2:59 PM Page 22 Cover Joel Ramsey SENIOR ASSOCIATE McCarthy TÉtrault,Toronto But the most significant catalyst was the growth of formerly U.S. multinational.” Third World countries such as India and the Philippines that As Canadian companies become more involved in offshore spurred the explosion of BPO in offshore markets, Ramsey says. BPO, they enter a world that is rapidly evolving and drastically The considerable cost advantages of doing business in these changing. “Indian BPO firms are looking more like the big countries and the advancement of their people’s skills had a huge multinationals they were competing against ten years ago,” says impact. “People in these countries are now highly educated, Ramsey of the stability, professionalism and confidence that now sharp, and have multiple language skills,” he explains. exude from the subcontinent. And as the 1990s went on, companies based in the U.S. and India’s IT-BPO services industry is growing at an above-sector Europe grew more comfortable with outsourcing critical business average of almost 8%,according to a report published in February processes to offshore service providers.“Companies began testing by the National Association of Software and Services Companies, the waters by using offshore call centres to do other things off- a Mumbai-based consortium that represents the industry. “The shore, such as research & development, marketing and account- overall Indian IT-BPO revenue aggregate is expected to grow by ing [functions].The economies of scale and the synergy allowed over 33% and reach US$64 billion by the end of the current this to happen,” Ramsey says. fiscal year,” the report states. “As a proportion of national GDP, the Indian technology sector revenues have grown from 1.2% in Canada comes onboard fiscal 1998 to an estimated 5.5% in fiscal 2008.” The trend to BPO has finally started to infiltrate the Canadian mar- As a result, it’s gotten to the point that “multinational [out- ket, which is “five to ten years behind the U.S.,” says Asif Quadir, sourcing] firms from the U.S. are starting to go to India and senior legal counsel, outsourcing and technology, for the Bank of developing capabilities for BPO that [Indian powerhouses] Nova Scotia.“It has now reached a level of comfort; two to three Infosys Technologies Ltd. and Tata Group have created,” says years ago, if the prospect of outsourcing was raised, people worried Quadir, who helped Infosys build up its outsourcing roster as a about jobs.Now,no one bats an eyelid.It’s the way things are done.” member of its strategic global services group earlier this decade, Adds Ramsey:“It’s got to the point where Canadian companies negotiating major deals with American Express and Eastman have come into the [offshore] BPO market, which is more devel- Kodak.“They went in, paid more, and poached middle manage- oped and sophisticated right now.These companies [have realized ment from the Indian giants. Now, many are even developing MARK STEGEL that they] can take their processes offshore even if they’re not a big their own universities in Bangalore.” 22 CCCA Canadian Corporate Counsel Association SUMMER 2008