Louisiana uniquely positioned for new CGI investment
Launched in a basement with only one phone and a single client, CGI today stands as the fifth-largest independent information technology and business process services firm in the world. In 1976, 26-year-old entrepreneurs and CGI founders Serge Godin and André Imbeau developed a strategy, mode and management principles that guided the company to significant growth in its first decade. As the company consulted with clients, many clients outsourced IT functions. This prompted CGI to evolve into a consulting and systems integration company, and in 1986 it began the process of acquiring companies that specialized in outsourcing IT projects.
Based in Montreal, CGI refined its “build and buy” strategy of expanding and adopting techniques for organic growth and additional acquisitions. In 2006, the company pledged to double in size over the next decade, and in 2012, CGI made its largest acquisition to date by merging with the Anglo-Dutch business and technology services company, Logica. With operations in 40 nations across the globe, and with a current worldwide employment of 68,000, CGI’s carefully planned acquisitions and attention to evolving trends solidified the company as a global leader in its field.
Since CGI established the 2006 goals for growth, trends changed; and as many companies continued to outsource IT functions overseas, many others determined that it was crucial to have a presence in North America. This was especially true when CGI won state and federal government contracts, which came with strict restrictions on employment. By 2012, CGI had also invested in onshore delivery centers in the U.S. including sites in Belton, Texas; Lebanon, Virginia; and Troy, Alabama. The onshoring trend continued, and opportunities emerged for CGI to better position itself for new clients and U.S-based contracts.
Identifying locations with a talented workforce was a key strategy for CGI. Louisiana’s skilled workforce and nation-leading digital media tax credit made the state a strong contender for CGI’s next investment as it made efforts to stay ahead of reshoring trends.
In 2009, Louisiana made enhancements to its Digital Interactive Media and Software Development Incentive. The state expanded the program to include businesses deploying their interactive software in fields beyond the digital media sector. As a result, Louisiana successfully attracted such companies as Electronic Arts, Gameloft and Moonbot Studios. And with additional projects in the works, Louisiana emerged as a new focal point for digital media and software development companies that could qualify for tax credits on eligible development expenditures and in-state labor.
Additionally, Louisiana’s leading higher education institutions, which feature world-class computer science departments, provided a pipeline of talent for tech companies. The abundance of highly skilled workers further established Louisiana as a prime destination for new information technology investments.
State makes case for CGI investment
There were multiple compelling reasons for CGI to adapt to the trends of onshoring. Many of CGI’s current clients pushed for U.S.-based locations, and federal agencies stipulated their work be completed within the U.S. Domestic work also provided a higher level of security for customers in the healthcare and finance industries.
Louisiana’s highly ranked business climate offered CGI a strong operating environment, and Lafayette emerged as a leading option. The city not only provided a pipeline of talent for new IT investments, but the Lafayette Regional Airport provided the opportunity for prospective new clients to fly into the region to meet the employees who would create their products. Louisiana Economic Development first began working with CGI in July of 2012 to make the case for a CGI investment in Louisiana’s Acadiana Region.
LED partnered with the University of Louisiana at Lafayette, or UL Lafayette, and developed a comprehensive plan to ensure CGI would have all the resources in Lafayette. The State of Louisiana offered a $4.5 million higher education initiative over 10 years to be led by UL Lafayette. As part of the initiative, the university would triple the number of annual computer science graduates produced in its School of Computing and Informatics. This growth would not only provide a consistent pipeline of talent for CGI, but would place UL Lafayette among the Top 25 programs nationally for the annual number of bachelor’s degrees awarded in that field. Additionally, CGI leaders would have the opportunity to collaborate with UL Lafayette faculty and staff to develop curriculum tailored to CGI’s projects.
CGI would have access to the state’s Digital Interactive Media and Software Development Incentive, which had already proved to be of value to other software developers in Louisiana.
Finally, the state committed to provide a $13.1 million performance-based grant to fund the construction of a permanent 50,000-square-foot, state-of-the-art facility at the UL Lafayette Research Park, to be used by CGI. The new facility would serve as the company’s showcase product development building – an advanced and attractive center to host potential clients and demonstrate the work of CGI employees in real time.
The comprehensive incentive package developed by LED proved attractive to CGI, as it met many objectives to better position the company for onshoring trends.
CGI selects Lafayette for advanced technology center
In April 2014, CGI executives joined leaders from state government, local governments, and UL Lafayette to announce the company would develop a technology center at the UL Lafayette Research Park. The company announced it would create 400 new technology jobs for the project by 2017. The plans for the center would support CGI in achieving onshore delivery capabilities for clients, whose needs included diversifying risk, achieving close proximity to CGI, and reduced business costs.
“We welcome the opportunity to contribute to the economic growth and vision of Lafayette and the surrounding region,” said Dr. James Peake, senior vice president of CGI Federal. “Our partnership with Lafayette represents a groundbreaking model for CGI – bringing together the local community to identify opportunities for innovation that can be applied globally, while tapping the talent and resources of Louisiana. As a continuation of our relationship with the state, this partnership will help create 400 jobs and serve as a model of corporate-community cooperation for keeping technology jobs in America.”
In addition to the partnership established with UL Lafayette, CGI received the comprehensive, customized workforce services of LED FastStart® for recruitment, screening and training prior to and during the company’s hiring period. Also, approximately 100 roles within the company were dedicated to work on projects that qualify for the state’s Digital Interactive Media and Software Development Incentive.
CGI ramps up hiring in advance of center opening
CGI did not waste time in growing its team and filling positions. Company executives, government leaders and university administrators gathered in early 2015 to break ground on the new IT center. By that time, CGI had hired 40 employees and launched Louisiana operations at a temporary office in downtown Lafayette.
In May 2016, elected leaders and company executives officially dedicated the completed information technology center.
“This ribbon-cutting would not have been possible without the shared commitment of CGI and its local partners in higher education, economic development, state and local governments and the Acadiana community,” said Tim Hurlebaus, president of CGI Federal, a wholly owned subsidiary of CGI. “Together, we envisioned a state-of-the art technology facility that would bring high-quality jobs to Lafayette and provide world-class service to CGI clients. Today, with that vision becoming a reality, we recognize the contributions of those who welcomed our business to this great community, and the CGI team members in Lafayette who are serving our clients across the country and around the world.”
CGI continued its steady pace of hiring for available positions, and at the time of the dedication, the company employed 250 technology workers in Lafayette, and was actively recruiting candidates for more than 50 available openings. CGI remained well on its way to reaching 400 jobs and an annual payroll that will exceed $22 million. The project is also estimated to result in an additional 405 permanent new indirect jobs, for a total of more than 800 new jobs in Acadiana and surrounding regions.