Title: The India advantage (Part I)

Sub-title: Quebec firms are rushing to take advantage of India’s skilled, English-speaking workforce and fast growing economy

 Bangalore - Michael Cant smiled as he glanced at the foundation of CGI’s new India headquarters. The structure, located in an industrial park alongside outsourcing giants such as Tata Consulting, Wipro and Infosys, will eventually house up to 2,500 employees, who will handle assignments for some of the continent’s top banking and telecom firms.

 Yet despite the building’s eventual high-tech orientation, several dozen workers were hauling cement in containers loaded on their heads, much as they would have, had construction taken place 1,000 years ago. “That’s India for you,” said Cant, CGI’s vice-president (marketing) with a grin. “(The country) is trying to vault over several stages of growth all at once.”

 Cant isn’t joking. While much of the Canadian business establishment is fixated on China’s emergence on the world stage, India, with its younger, English-speaking workforce, its fast growing economy and exploding population (which will be the world’s largest by mid-century), is creating a myriad of threats and opportunities, which could eventually make those emanating from China pale by comparison. 

 One example: while Asia’s sub-continent remains mired in poverty, India’s engineers, software programmers and high tech workers, are being hired to work on foreign contracts as fast as the country’s universities can churn them out. And unlike the jobs being lost to China, those heading to India are of the white-collar variety, the kind that politicians’ and registered voters’ kids tend to want. Canadian firms are thus faced with a dilemma: while some have been criticized for being too slow to take advantage of India’s rise, many are setting up shop just as India’s skilled-labor supply is becoming tighter.

 CGI isn’t one of them. Its India division’s roots go back to the early 1990’s, though CGI only picked up the Bangalore and Mumbai offices several years later, as part of a broader acquisition. Since then, staff has expanded rapidly, but selectively. “We follow a client-centric focus,” said Cant. “We don’t tell customers you should be doing this or that, we offer a solution that builds on a global footprint.”

 Like many Canadian firms that operate in India, CGI’s challenge is twofold: to trumpet the advantages to its financial services, telecom and IT clients of sourcing work in India, yet at the same time to properly explain the social and public policy implications of doing so.

 In fact many companies that are based in, or do business in Quebec are closed mouthed about their Indian operations. Air Canada, which operates a call center there, Bombardier, which recently outsourced writing and editing jobs to India and Dell Canada, which sells computers to Quebecers on off-peak hours from a center in Hyderabad, all tended to downplay their outsourcing arrangements.

 However unlike many firms that use global sourcing strategies, Cant isn’t shy about defending the practice. “Many of our clients’ compete on an international scale, so for them, outsourcing a part of their supply chain to India is directly related to boosting efficiency to protect existing jobs,” said Cant.

 That said, CGI, which continues to employ the vast majority of its  25,000 staff members in Canada and the United States, leaves it up to its clients to announce (or not) which portion of their work is being handled in India. So while CGI’s Bangalore employees are divided into sections with overhead signs indicating which client they ultimately work for, we were not allowed to photograph them.

That said, a quick tour of the massive Bangalore facility begs the question as to why there are not more of them. The CGI employees we spoke to all had excellent education, spoke perfect English, had tons of enthusiasm – and cost an estimated 70 to 80 percent less than comparable Canadian employees would.

 What’s more, according to one Montreal engineer, cheap Internet communications and an Indian “can do” attitude mean that overseas work can be accomplished on a much smaller scale than that handled by CGI. “I get resumés from potential Indian sub-contractors all of the time,” said Daniel Spooner, a self employed engineer and president of DesignFabrik, a strategic design firm which does work for the medical products, telecommunications and transportation industries. “And I am often tempted to see whether using them will add value to the customers I service.”

 But according to Cant, it’s increasingly quality and capabilities not just cost, which are driving Canadian customers to want to do business with Indian partners. “Companies that do work for foreign firms tend to be highly prized workplaces for Indians,” said Cant. “That in turn gives us better flexibility to provide our customers with the best value proposition, whether it be there or somewhere else.”

 

Caption: Michael Cant, vice-president (marketing) at CGI, overlooking the

company's new Bangalore facility, which is expected to more than double

the company's sourcing capacity in India.

 

(This article is the first of a three-part series on how Canadian companies are profiting from outsourcing, investing and trade opportunities created by China's unprecedented growth).

 

peter@peterdiekmeyer.com

 

 

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