Published: March 5th, 2007

The landscape is changing. Indian firms are no longer working only at the lower end of the IT spectrum. Some of the largest IT firms in India have a global presence and want to create global sourcing or “right sourcing” supply chains that draw on talent and resources the world over.Canadian companies want to be a part of that model. That’s why the Information Technology Association of Canada (ITAC) doubled the size of the delegation it sent to the National Association of Software and Services Companies conference, NASSCOM 2007, last month.

Paul Kent, a member of ITAC’s executive committee, and the COO of Xwave, said ITAC went to NASSCOM to make sure Canadian organizations had networking opportunities.

The right kit bag
“In the outsourcing phenomena, the word being used now is ‘right sourcing.’ We represent a nearshore option and they have an offshore option. The best approach is to make sure you have both in your kit bag.”

Foreign Affairs and International Trade Canada agrees. Through its Consulate General in India, it helped set up meetings between Canadian organizations and Indian IT companies. “NASSCOM 2007 provided Canadian participants with valuable contacts and useful insights into the Indian IT and ITES sectors,” said the office’s spokesperson, Anne-Marie Parent, in an e-mail. The Consulate in Mumbai, for example, set up a roundtable meeting with representatives of the regions of Toronto, Ottawa, the Waterloo Tech Triangle, Nova Scotia and Prince Edward Island with a leading Indian IT company poised to open three or four centres in Canada.

Hyderabad, India-based Satyam Computer Services Ltd. already has an office in Canada, which plays an important role in its services delivery model. The company provides a mixed delivery model that uses both onsite and offshore resources, said Satyam Canada’s senior vice-president of the Americas, Gary Teelucksingh. Employees attend a three- to six- month training program so they have a common framework to communicate with, he said.

The ventures are going both ways. Xwave plans on looking into how offshoring can make it more competitive than its U.S. counterparts, Kent said.

But such strategies have some worried. John Boufford, president of the Canadian Information Processing Society (CIPS), thinks companies should make a concerted effort to buy Canadian. “There should be a policy to buy Canadian when the price and quality are comparable,” he said. “Perhaps there should be a premium attached to the Canadian portion of a bid to create a competitive advantage.”

Michael O’Neil, the managing director of the Indaba division of Info-Tech Research Group, thinks it’s a more complicated equation than just jobs being lost overseas. “The jobs loss part of (outsourcing) is easy to encapsulate into a soundbite,” said O’Neil, who also attended NASSCOM 2007.Though some jobs may go overseas, people are freed up to do other work – and at least some of those will find jobs of higher value that can contribute more, O’Neil said. The capital savings a company makes on cheaper labour is also spent elsewhere.

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