The recent announcement that global BPO player TeleTech will be acquiring Canadian outsourcer Atelka has garnered a great deal of attention for the market just above the 49th parallel. Notwithstanding the sound commercial logic of this move, it illustrates the ongoing interest in Canada both as a point of delivery and as a demand market for CRM services. But, prospective entrants need to realize that today’s Canada is very different than it was a decade ago, and requires CRM business model creativity in order to succeed.
TeleTech has never been shy about making strategic acquisitions, and buying Atelka is an example of this. This move lets TeleTech expands its presence north of the US border, not only gaining capacity in a number of secondary and major centers, but it also garners the additional credibility that one of Canada’s most well-known contact center outsourcers brings to the table. Canadian enterprises are notoriously risk-averse when it comes to choosing a contact center vendor, and Atelka will provide TeleTech with an added level of strength when going after market share in Canada. Atelka’s domestic brand equity cannot be underestimated, and TeleTech stands ready to reap dividends from this move.
A more interesting question comes from the perspective of TeleTech’s opportunity to leverage Canada as a nearshore service point. The benefits of delivering contact center services into the US from Canada have been well documented, in terms of the close cultural / commercial alignment between residents of both countries, as well as Canada’s limited political risk. The established set of existing global outsourcers present in Canada also goes far in developing confidence for American investors. However, from a cost standpoint, the currency arbitrage between the CAD and the USD over the past two years has made Canada a much cheaper delivery point for US firms, which has arguably been the main driver for interest in what has become known as ‘the northern nearshore’.
In order to successfully leverage Canada as a contact center delivery point for US end-users, outsourcers will need to adapt to a number of new realities. For instance, as in many other countries Canada’s labor force is increasingly interested in the opportunities around remote working, and any vendor that champions a strong home-agent strategy is likely to find interest among prospective employees. In addition, Canada’s changing demography means that pockets of language speakers other than French or English (notably Spanish) can be more readily recruited north of the border, a significant change over the past decade. Forward-looking outsourcers eager to deliver from Canada need to take into account such changes, in order to successfully re-establish northern nearshore delivery as a business model of choice.
The fact that Canada seems to be making a comeback as a location of interest for more global BPO vendors is healthy and speaks to its latent contact center value, both as a demand market and a nearshore delivery point; TeleTech’s decision to acquire a leading Canadian vendor speaks volumes in this regard. What will be important for any outsourcer interested in Canada will be to recognize how the country has evolved, and adapt their delivery strategies accordingly.