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Article

Title: Offshoring closer to home

Author: Mears, Jennifer Article Type: Product Analysis
Source: Network World, v22 n10 p25(2) Publication Date: Mar 14, 2005
  ISSN: 0887-7661
  Illustrations: Tables
URL of Publication: http://www.nwfusion.com

A new trend is seeing many companies nearshoring call center operations. Nearshoring means sending work to geographically closer countries such as Mexico and Canada. The advantages include the lower wages in those countries and the fact that they are closer than China or India. A recent report indicated, for example, that a software operation based in Nova Scotia would incur annual operational costs of $8 million compared with $10 million in Boston and $11 million in New York. Among the companies currently nearshoring to Canada are CompuWare, Keane, IBM and Electronic Data Systems. Overall, the offshore market is currently valued at $6.9 billion, with an expected 20% annual growth rate through 2007, when it is expected to reach $17 billion. Another trend is seeing companies establish operations in rural areas within the US, where such benchmark costs as real estate and wages tend to be significantly lower than those prevalent in urban centers.

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