Ins and outs

As outsourcing expands in Jerusalem, cost remains the bottom line.

By LEAH GRANOF
outsourcing phones (photo credit: )
outsourcing phones
(photo credit: )
Imagine if you walked into work in the morning, opened your email and found the assignments you handed out at the end of the previous day now completed. This scenario is occurring more frequently today as companies outsource their projects to overseas workers. The set-up often involves North American companies subcontracting their services to India or Europe in the form of call centers and hi-tech projects that allow the North American counterparts to utilize round the clock labor at a cheaper cost. Israeli companies have been active participants in this venture for some time, as American companies take advantage of the large Anglo populations residing here, especially for their customer service needs. In addition, major hi-tech companies such as Intel and IBM have long had centers in Israel that employ the expertise of Israeli programmers and computer specialists. A new company, however, is expanding the outsourcing model into the relatively untapped area of custom publishing within Israel. Established in May of this year, Jerusalem Design plans to take advantage of the large pool of English speakers living in Israel to do the graphic design, editing and copy writing work for clients in the US, said co-founder Eli Kazhdan. As the former CEO of StartUp Jerusalem, a non-profit organization dedicated to the economic development and job creation in the city, Kazhdan says that he believes that the Anglo market in Israel offers an ideal supply of inexpensive talent and expertise that can also satisfy the economic needs of English speakers living in Israel. Acknowledging that the company can use employees in Israel for half the cost of what it can find in America, Kazhdan affirmed, however, that "cost is not everything." "It is very attractive that the Anglo market here speaks English at a mother-tongue level and has a deep understanding of the culture we are dealing with in America," he explains. Unlike most companies, which are based in the US and outsource a percentage of their work to Israel, Jerusalem Design - as the name implies - hopes that while its clientele will be US-based, almost all of its employees will be located in Israel. The company founders, however, admit, that they need a representative in the US to make the model viable. That is why co-founder Jonathan Jarashow is based in New York. In fact, Jerusalem Design is an offshoot of Jarashow's already successful medical magazine publishing company. Currently, most of Jerusalem Design's assignments come directly from Jarashow's own company or from his clients who are already sympathetic towards Israel. "We are starting with the low-hanging fruits for whom outsourcing to Israel isn't scary," Kazhdan said. For Dean Blumenthal, CEO of the New Jersey-based Lion Brand Yarn Company, however, the attraction to work with Jerusalem Design was the connection to Israel. The bottom line, though, still counts. "First the product has to be right, and then the second consideration is the price," he says. "After that anything I can do to help Israel, is great." Graphic design makes up the bulk of the work handled by Jerusalem Design thus far. One Israeli CEO who has done significant research in outsourcing for his company's needs explains that this is not surprising, since graphic design and computer programming have become two of the most globally sought after services. His company outsources significant work to Eastern Europe, which, next to India, has become the big hotspot for cheap but talented labor, the businessman says. Top-notch graphic designers working from the Czech Republic, Russia and Romania can out-bid top Israeli graphic artists by almost 80 percent, he claims. Jerusalem Design's founders, however, believe that they are contributing to the Israeli economy and supplying rewarding jobs to talented persons who otherwise wouldn't have many options for employment. "It's a win-win situation," Kazhdan argues. "A 50-year old new immigrant who doesn't speak a word of Hebrew can work from home and make three times the minimum wage here, while we cut our costs in half."