Stellar Startups: Corporate aliya – the easy way

So what does a corporation do when it wants to make aliya? Same thing – it goes to a professional organization that specializes in helping companies move to Israel!

By DAVID SHAMAH
October 5, 2011 06:21
4 minute read.
The Jerusalem Post

groupon team_521. (photo credit: (Tim Boyle/Bloomberg))

Making aliya is a difficult process, as many of us know. Picking up and moving – and functioning in a different language and culture (such as it is) – is a major challenge. That’s why many people avail themselves of the assistance offered by professional organizations that specialize in resettling Westerners in Israel.

So what does a corporation do when it wants to make aliya? Same thing – it goes to a professional organization that specializes in helping companies move to Israel!

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As it happens, one of the most important links between businesses in “chul” (outside Israel) and businesses here is an organization called ITCom (itcom.co.il), which you may have never heard of, but which is the first one that big international corporations like Groupon and Motorola call when they want to set up shop in Israel, painlessly and quickly.

Groupon is a good example of what ITCom – via its subsidiary, Netcloud – can do, says Eyal Greifner, cofounder, along with Amir Omri, of ITCom.

“We became a partner with NetSuite several years ago, and we started building Net- Suite systems specifically for the Israeli market, including ERP [enterprise resource planning], CRM [customer relationship management], BI [business intelligence] and much more,” he says. “As a result, we were able to get Groupon on-line in Israel within just three months.”

Groupon’s experience is actually a good example of why a company would want to use NetSuite’s services – and why it would want to use ITCom’s NetCloud service.

NetSuite, of course, is the Larry Ellison (of Oracle fame)-created online business platform that takes care of all the “office backend” – accounting, inventory management, e-commerce components and much more – over the Internet, eliminating the need for much of that activity in-house, thus freeing up resources for other, more profitable activities.

Many companies are coming to the realization that they can save a great deal of money by outsourcing their business tasks; over the past two years, NetSuite’s growth rate has mushroomed. “It’s very simple – you just log in online and start working, without the need for infrastructure in the office,” Greifner says .

While NetSuite is a great convenience and a money-saver for any company, it’s a lifesaver for companies that want to move into a new international market. The financials, bookkeeping, business intelligence and so on is essential for business success, but setting up such an infrastructure takes much time, effort and expense – and has to be done in a foreign language, in a foreign country, with foreign laws, to boot!

Given that kind of challenge, not many companies would bother setting up shop in foreign lands, preferring to forgo possible profits; it’s just not worth the money. Especially a company like Groupon, which faces significant competition in every market. Groupon’s business model has been copied by everyone and his mother, and local operators obviously have a leg up on any newcomer, no matter what the brand name. And while it’s true that Groupon did acquire an Israeli company to get into the market, the company it acquired (Grouper) was certainly not the dominant player in the coupon space that Groupon planned on becoming.

Thus, if Groupon wanted to grow in Israel, it had to concentrate all its resources on sales. So even though we’ll never know for sure, it’s unlikely that Groupon would have set up shop in Israel – or in many other countries, as a matter of fact – without Net- Suite. What goes for Groupon goes for other multinationals, Greifner says, such as Kodak, Motorola, Ernst and Young and others.

Israel presents a special challenge for foreign companies, both because everything here is in Hebrew and because of some unique aspects of Israeli law, Greifner says. “Translating NetSuite into Hebrew took over a year,” he says, but even more complicated was “Israeliizing” some standard business practices that have a special twist here. For example, it’s almost unheard of elsewhere in the world for employees to have their income taxes automatically withheld, at various rates depending on their credits, family situation, etc.

“There are many unique laws here in Israel: the methods used to withhold income taxes, the ability to pay taxes online, the requirement for various government forms that do not exist elsewhere,” Greifner says. “We had to create components and integrate them into the localized system.”

As a result, he says, ITCom developed some novel methods to integrate localized information – methods that will be shared with other Netsuite reps in other countries.

And, of course, the right-to-left aspect of the Hebrew translation, experience in which may come in handy for use in other such countries (you know the ones I mean!).

“In a short time we’ve proven that NetSuite can work in a market like Israel,” Greifner says. “We expect to be signing up many more clients in the coming months.”

digitalisrael.net


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