Nearshoring center in Halifax sees growth

TORONTO (11/13/2003) - An outsourcing firm has launched a recruitment campaign in a bid to attract IT professionals across Canada to positions in its nearshore outsourcing operations in Nova Scotia, due to growth in the market.

Headquartered in Boston, Keane Inc., which has 7,500 employees spread across facilities in the U.S., U.K, India and Canada, has seen a 30 percent increase in the demand for nearshore outsourcing over the past six months, said Jim Brewer, the firm's vice-president of global services delivery. That's why Keane is now on the lookout to fill software engineer, project manager and business analyst positions in its advanced development center (ADC) in Halifax, which it opened in 1996.

The range of skills required is broad, "anything from older legacy skills in Cobol and DB2, all the way up to J2EE and .Net," explained Brewer. "The technical skills need to reflect the diverse nature of customers that we serve."

To support the initiative, Nova Scotia Business Inc. (NSBI), the province's business development agency, authorized a payroll rebate for Keane for a maximum of C$1.5 million (US$1.2 million) over three years, provided Keane creates and maintains 175 new jobs.

Although he wouldn't disclose the exact percentage for the rebate, NSBI's president and CEO Stephen Lund said Keane will only receive money back after the people hired at the Halifax ADC have been employed for a full year and the government has collected the tax revenue. "Whatever we take in, whatever the government takes in...it's always a net for us," Lund said.

The ADC in Halifax was recently recognized as the first Canadian IT services facility to be assessed at Level 5 against the Software Engineering Institute's (SEI) Capability Maturity Model (CMM), a standard for evaluating and improving software processes. CMM Level 5, the highest ranking, means an organization has achieved a state of continuous process optimization, driving operational efficiencies into IT organizations through the application of project management, application delivery and measurement best practices.

Brewer said the achievement of CMM Level 5 in the Halifax ADC will enhance Canada's ability to compete with some of the offshore countries. To help the Halifax ADC continue to uphold those standards, Nova Scotia Economic Development will give Keane a C$2.5-million innovation incentive to support the company's achievement of CMM Level 5 certification.

Brewer said lately there has been a "tremendous increase" in interest when it comes to offshore outsourcing, which Keane also offers through its two ADCs in India (with one slated to be opened next week). But the appeal of nearshoring has spiked partially because "a number of companies on the leading edge who were (involved in) offshore...are now looking more holistically at their IT portfolio," Brewer explained. "Instead of putting all of their eggs in one basket like India, they can work with Keane to develop some redundancy in terms of technical infrastructure."

Brewer explained that there are geopolitical factors to consider when deciding whether to go offshore or stick closer to home. "Today there is a relatively stable working environment in India, with a business-friendly government...but the fear is that there are certain cultural challenges of delivering something in one's own location versus delivering something 12 hours off-shift and overseas," he said.

"The political environment in India or the Philippines could change tomorrow, and those are places where there is less perceived political stability," he added, noting the recent fluctuations in the tension between India and Pakistan. "Companies are asking themselves, 'What would my out be if the political situation got worse?'" By combining offshore outsourcing with nearshoring, a company's business knowledge "can be spread throughout many locations."

NSBI's Lund said there is no way Canada can compete with India on wages alone. "But for a U.S. company, the total cost of ownership is critical -- not just wages." Companies who opt for nearshoring "don't have to fly halfway around world," and can benefit from cultural similarities, closer time zones and fewer rules and regulations. And they can still save 40 to 60 percent when doing work in Nova Scotia versus New York or Boston, he said.

More information about Keane's job opportunities can be found at http://www.keane.com/careers.

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