Experienced outsourcers are discovering that outsourcing yields improved business performance.

Canada has a reputation of being a highly desirable [outsourcing] location for companies from around the world because of factors such as our well-educated talent pool, multicultural population, geopolitical stability and relatively low cost of conducting business," says Tony Gaffney, executive director of outsourcing for Accenture in Canada. "There are many examples of international companies who have either located captive operations here, or who have outsourced to companies in Canada.

"Many Canadian companies, on the other hand, tend to be far more conservative in their adoption of outsourcing as a strategic business practice than leading companies in their industry or their international peers," he explains.

"For example, retailers such as Best Buy, Wal-Mart and Home Depot leverage outsourcing extensively, whereas very few Canadian retailers do so. The same can be said about industry sectors such as financial services, telecommunications and others, including government."

Accenture is a global management consulting, technology services and outsourcing company. Gaffney talked to Venture about Canada's role in the world of outsourcing and best practices.

Venture: How long has outsourcing been around?
Tony Gaffney: It is a mature business practice, which has been around for well over a decade. As a result, companies outsourcing for the first time or seeking to expand their use of outsourcing can avoid going through a painful learning curve. They can do so by borrowing from the experience of those companies who have been outsourcing for many years with very positive results, and have already developed and refined techniques for high-performance outsourcing.

Venture: Why would a company outsource?
Tony Gaffney: Experienced outsourcers are discovering that outsourcing yields improved business performance. Far from just reducing costs, done well, outsourcing can play a pivotal role in optimizing business processes, expanding capabilities and building the competitive strength of an organization.

Recent Accenture client examples include a telecommunications company which outsourced to gain better access to skills and capacity to enable it to become more agile at launching new services; a utilities company which outsourced to improve its customer service operations in areas such as improved quality of customer interaction, increased revenues from cross-selling, reduced billing exceptions, bad debt and improved working capital; and, finally, a start-up company which was seeking to have a partner build it's IT operations while its staff focused on building the business.

Venture: Why does Canada excel in terms of outsourcing?
Tony Gaffney: The key reasons behind that tend to be the availability of skills in Canada, our diversity from a cultural and language perspective, the quality of life, which attracts a lot of people, the relative cost of doing business in Canada compared to other locations, and the political and economic stability of the country. As well, the Canadian legal system provides ample opportunity for recourse in transactional disputes, privacy infringement and theft of intellectual property.

And if security is a key issue, we are also a part of a North American security perimeter. Canada has a stable and established infrastructure.

Venture: Canada seemed to have had the edge for some time with outsourcing but appears to be lagging behind other countries. What can Canada do to leapfrog again?
Tony Gaffney: Canada has numerous strengths that we aren't capitalizing and marketing well enough to the rest of the world. Within Accenture, we fully leverage our Canadian capabilities as we service international clients. For example, Accenture's Canadian center is part of our global delivery network, [and] provides businesses in North America and the world access to a strong and experienced work force in application outsourcing.

As well, we have one of the largest BPO organizations in the world dedicated to the utilities industry and based in Canada. There are numerous success stories for Canada; we just need to raise awareness for them. Canada needs to look to other nations, see what they are doing with the positioning of these capabilities in global outsourcing, and learn from those experiences.

As a nation we can excel if we continue to be committed to what we are good at, a skilled work force, our infrastructure and continuing to promote incentives for firms that bring work to Canada.   VTR_US

Tony Gaffney is the executive director of Accenture's outsourcing business in Canada. He is also the managing director for Accenture's Toronto-based operations, overseeing all of its businesses. Contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it for more information.