With the rupee steadily appreciating against the dollar through 2007, the otherwise expensive continental American locations are now proving to be a good option for the U.S.-based companies to handle customer-service operations. And this time, Canada is trying to draw some business from Latin America and the Caribbean Islands, thanks to factors such as similar time zones, common ethnicity and language. In 2006, Halifax — the capital of the Canadian province Nova Scotia — was seen making news on the outsourcing map when a lot of companies from Bermuda started establishing their back-office centers, creating thousands of jobs in the city.
The trend is only catching up further as Halifax offers the advantage of cultural affinity, helping it draw the call-center business. Industry analysts at Datamonitor had forecasted that the call-center industry in this provincial city would grow at 7.9 percent a year. Consequently, over 3,579 jobs were created in the city in 2006.
While there is good momentum, the city is faced with paucity of talent because the offshore delivery business is yet to go mainstream. But the city’s technology savvy population and environment that brings together industry, government and education for collaborative efforts holds it against the leaders. There are eight universities in and around Halifax where more than 2,000 IT students graduate each year, feeding skilled employees into the ICT sector.
| Halifax: Quick Take |
| Currency: CAD (US $1 = 1.1334 CAD) |
| Key Service Providers: Keane, ADP, EDS, Blue Ocean Contact Centers, Minacs, TeleTech, CSC, Creel Solutions, RIM, CGI, xWave, Unisys, Fujitsu |
| Key Processes: application development and maintenance, Finance and accounting |
| Languages: English and French |
| GDP (official exchange rate): $1.089 trillion (2006 est.) |
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Source: CIA Factfile;
Global Services |
The local government and business associations are also active in bringing in more business to this small city by providing tax credits and other initiatives. Nova Scotia Business is one such private sector agency, which works to attract new companies to locate in Nova Scotia to provide long-term employment opportunities for Nova Scotians, and help those already in the province expand through services such as export development and financing.
The agency, for instance, helped Paragon Advance Development, a Bermuda-based IT company, get a five-year payroll rebate of a maximum of $1.2 million. Also, the Economic Development Department of the province will provide the company $300,000 as training and recruitment incentive.
Lower salaries are also a reason for many companies choosing Halifax as an outsourcing destination. A skilled software worker, who can command $80,000 to $90,000 a year in Boston, can be hired for as much as 25 percent less in Halifax. Also costs for a typical 110-employee software-development group in Halifax are about 40 to 50 percent lower than those in Boston or New York, say industry experts, making it an economical nearshore option.
Q&A
Jason k. Powell
Managing Director, Keane, Canada
Halifax has a very business-friendly government that is investing in the knowledge economy sectors like IT
Keane is one of Canada’s top 100 employers. To find out about what attracted the company to Halifax, Canada, Global Services’ Adyasha Sinha spoke to Keane Canada’s Managing Director Jason K. Powell
How do you see Halifax’s prospects in the current dollar devaluation scenario?
The devaluation of the U.S. dollar has negatively hit our profit margins. The appreciation of the Canadian dollar versus the U.S. dollar has been occurring over the last five years. Despite this, we have been seeing an increasing interest in Halifax. For example, Keane has adopted its strategy to provide more high-value offerings from Halifax.
And, what are these high-value services that you offer?
From the Halifax center, Keane currently handles application development and maintenance projects for Fortune 500 customers, especially from the financial-services sector. Recently, Keane has also developed a capability in Halifax to service Rich Internet Applications projects based on FLEX technology. These projects use the agile methodology, which is not as readily available in all the regions.
Have you noticed any increasing traffic toward the Halifax center?
The center opened in 1997, and has now grown to almost 500 consultants, who are servicing our customers in the Northeast, North Central and Western parts of the U.S.A. We have, recently, expanded activities into the domestic market, including Ontario and Western Canada.
What business benefits does Halifax bring with it?
Halifax provides a great place to pilot outsourcing for first-time customers. Many same time-zone tasks can also be executed remotely from Halifax, such as agile-development projects, business-analysis activities and other high-communication roles.
Are there any challenges that one would face in Halifax?
The biggest challenge lies in educating customers about advantages of Halifax. As a smaller population center (approximately 400,000), the area isn’t well known.
