Canadian IT still in U.S. shadow: CGI president

TORONTO — CGI Inc. will never fall under American ownership, promises its president Michael Roach.

Roach, who handles Canadian and European operations for the outsourcing firm, delivered a speech Tuesday about Canada’s role in the global

IT economy before the Toronto Board of Trade. “”We’re not for sale,”” he said. “”I believe we’re pursuing a dream here. We will resist vigourously any attempt to be bought by a U.S. firm and we have structured the company so it’s very difficult to be bought.””

Roach lamented the sizable stake American companies already have Canada’s IT economy and urged the audience to consider homegrown talent before shopping around in the U.S.

He noted that while Canada is adding IT jobs faster than the U.S., the majority of those jobs are on the production side rather than leadership and management roles. Quoting the Information Technology Association of Canada, Roach said there is still a 30,000 shortage of qualified IT personnel in Canada. “”In short, we are getting plenty of good jobs, but not enough of the best jobs.””

Canada needs to take a firmer hand in its own destiny, he said, and nuture the development of IT professionals. There certainly should be sufficient talent in Canada to compete on the international scene, he said, noting that Canada has the highest percentage of post-secondary graduates anywhere in the world.

He also pointed to the need for more Canadian investment in IT infrastructure. “”I’m convinced that the absences of these decision-making centres is toxic to our economy,”” he said.

Montreal-based CGI Group Inc. may be committed to remaining in Canada — “”Nobody ever won any awards by giving up their home base,”” he said in an interview — but the company also has to expand overseas to compete. According to Roach, CGI acquired services company IMRglobal last year to strengthen its position in the U.S., but also to take advantage of its assets in India — an emerging player on the IT scene. There are more than 400,000 Indians working in IT, he said, exporting IT services and software to the rest of the world worth US$5 billion annually.

The Indian IT economy has boomed due to the “”extraordinary availability of highly-skilled and highly competitive labour. . . . Why do industrial countries export these activities? Basically because the costs are lower, but also the necessary workers are trained and available in places like India.””

CGI released its second quarter results for 2002 on Tuesday with a net earnings of $33.2 million — almost 50 per cent higher than the same period last year. According to the Q2 report, CGI has a backlog of signed contracted worth $9.1 billion and a pipeline of outsourcing bids still under review worth $5 billion.

The company will lean more heavily on outsourcing for revenue as the market grows, said Roach. He sees the private sector, rather than public, as the bigger opportunity. Companies are still taking a serious look at trimming their bottom line, he said, under persistently difficult economic conditions. The shortage of skilled Canadian IT workers is also contributing to growth in the outsourcing market, he added.

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