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Oh Canada – challenging in call centre offshoring
Or what we should call 'nearshoring', for US companies

By Tony Hallett

Published: Thursday 14 August 2003

Canada is becoming a major option for US companies looking to outsource call centre operations, competing with countries in the developing world on grounds of economic stability, proximity and a shared communications infrastructure.

The idea that companies can gain advantages without looking for very cheap operations on the other side of the world is gaining traction, according to Datamonitor, which forecasts a 33 per cent rise in outsourced facilities in Canada to 600 by 2007, and a rise in agent positions of 52 per cent over the same period.

Although countries such as India, Malaysia and the Philippines hog the headlines when it comes to outsourcing abroad – or 'offshoring' – they face competition in the form of what some pundits have termed 'nearshoring'.

Datamonitor call centre analyst Peter Ryan said Canadian success will be for reasons of accessibility, shared culture, cost and infrastructure.

"For many US companies, if they want to go and visit a facility in Toronto, Montreal or Calgary it could be under three hours away," he said. "In some circumstances you could even drive there. For the same companies, India, Malaysia or the Philippines is probably a 15-hour trip."

The relative cultural closeness of Canadians and US citizens is also a factor and despite it being a developed, highly educated economy, the difference in strength of each country’s dollar makes Canada attractive, even against lower cost areas such as the US South.

On communications links, Ryan also pointed out a common telephony system, as opposed to the poor infrastructure in parts of some developing economies.

A potential problem for Canadian outsourcing operations, however, is a lack of local Spanish speakers. Although many Canadians speak more than just English, with strength in various Indian and Chinese languages as well as French, Spanish isn’t as widely used as it is in the US.

And while Ryan says Canada can compete on cost, a company looking for the largest reductions in its call centre overheads is still likely to find cheaper options further afield.

Some Canadian provinces, for example Quebec and British Columbia, are considered more receptive to outsourced call centre operations, though other areas have their strengths, according to Datamonitor.

Its report, 'Profiting from Call Center Outsourcing: lowering risk and maximizing savings', is available now.