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Canadian based companies, like their counterparts in Europe, enjoy significant advantages of outsourcing to companies located beyond their borders. "Offshore outsourcing" therefore provides a powerful labor arbitrage.

In their attempt to remain competitive amidst economic recession, Canadian corporations, including a number of Fortune 500 companies, are looking offshore and nearshore to leverage substantial advantages including: drastic cost reductions in labor; large resources of highly-educated, English-speaking knowledge assets; an estimated 30% reduction in turn-over rates; an estimated 40-60% reduction in operating costs; and the most prevailing, yet increasingly economical, information and communication technologies.

Though, demand for offshore externalized services in BPO is still immature, there is a history of internal offshore processing by large enterprises in areas such as accounting transactions management, payment processing, medical transcription and contact center services. This trend is now expanding with service providers beginning to position themselves to offer offshore BPO services to clients by making investments in delivery centers in countries that have a strong pool of skilled labor, a labor cost advantage, and relatively sophisticated telecommunications and network infrastructures.

Remote processing from locations such as India and the Philippines, has been made possible with the technologies developed in the late 1990's and more recently. These include high-speed document scanning systems, document imaging software, integrated document management systems, Web-enabled ERP and stand-alone accounting systems, together with the declining cost and greater availability of telecom connectivity. Cross-border remote processing is therefore poised to explode as indicated by McKinsey & Company, which has predicted that the productivity improvement potential from cross-border remote services exceeds $500 billion.

U.S. organizations therefore have access to high quality products and services at remarkably lower prices because of the wage scale differential, which can result in labor savings as high as 60 percent. Another advantage is the time zone differences, which brings with it a quicker turnaround of services.