Israel has long been recognized as a hotbed of innovation, but recent hi-tech industry turmoil has led to higher cost of doing business in Israel, which in turn poses a significant barrier to company growth. In response to that challenge, many companies have turned to outsourcing, which offers an effective way to get more done with less money.
Many Israeli start-ups are turning to outsourcing for a variety of tasks, including software development, marketing and customer service. By outsourcing these tasks, start-ups can save money on salaries, benefits and other expenses associated with hiring and managing employees. Additionally, outsourcing can provide access to specialized skills and expertise that may not be readily available within Israel’s borders.
In order to better enable companies to outsource effectively, French company Webhelp has developed a program, dubbed “The Nest,” which is designed to support start-ups and scale-ups around the globe to scale up their teams internationally and improve their customer experience operations. The global program has experienced a massive growth of 400% from 2021 to 2022, and the company has just launched the program in Israel as well.
The Nest will offer Israel companies a wide portfolio of customer services including omnichannel customer engagement services, B2B & B2C sales support, KYC and payment services.
“The underlying idea of the program is to be the ‘outsourcing partner’ for growth-stage start-ups and scale-ups, leveraging Webhelp’s extensive international experience in customer engagement, support, sales, digital content, and payments. The program’s unique model combines attractive pricing, managerial focus, wide flexibility, and agility to adapt to changes,” said Kobi Shmerler, who heads the Israeli branch of The Nest.
“In a world where profitability is the main indicator of start-ups’ operational quality, it is very important to minimize operational risk. Proper outsourcing greatly reduces the financial and operational risks of setting up local operations and opening new international markets,” Shmerler said.
Let someone else do it
Customer service is one of many fields that Israeli start-ups are turning to outsourcing for – another key contending field is cloud infrastructure development. According to Adi Heinisch, General Manager at CloudZone, ”Start-ups that have built their solutions on cloud-based technologies are facing a serious cost challenge in the midst of the [current] economic crisis.”
As foreign investment shows signs of waning and global hi-tech recession looms, Heinisch explained, “Boards of Director are pushing to save costs, which creates two main challenges for CFOs: How to analyze the actual cost per user/license, and how to make their infrastructure incredibly cost-utilized and efficient.”
Therefore, the wisest course of action in such a situation is clear: “Don’t do it yourself! Doing it by yourself will waste a lot of time and money and will remove your focus from growing and stabilizing your business,” he said.
Another form of outsourcing can be seen in the increasing trend of utilizing coworking spaces, such as those offered by WeWork and MindSpace.
Coworking offices are flexible shared workspaces, typically catering to small businesses and entrepreneurs. By renting out a space in such a space, companies are able to forgo costs related to building maintenance and management, allowing them to wholly focus on their work.
“The underlying idea of the program is to be the 'outsourcing partner ' for growth-stage startups and scale-ups, leveraging Webhelp's extensive international experience in customer engagement, support, sales, digital content, and payments.”
Kobi Shmerler
According to a 2020 study by global real estate services company JLL, coworking locations will make up 30% of all office space by 2030. “Shortly after we officially came out of the corona crisis, huge demands began and we noticed that the uncertainty strengthened the demand for co-working spaces,” said Nadav Fatal, CEO of Tel Aviv-based coworking space company Rooms. “This phenomenon continues and gets stronger to this day.”
While outsourcing has its challenges, including language barriers and cultural differences, many Israeli start-ups are finding that the benefits outweigh the risks. By leveraging the power of outsourcing, these companies are able to reduce costs, access new talent and expertise, and stay competitive in an increasingly globalized marketplace.