Many US corporations are beginning to rethink the advantages of outsourcing call centers services for their customers. Does the lower labor cost overseas really justify the erosion in the company's reputation among its domestic customers who may not be satisfied with the process or results of the interaction with those employees? The US market is beginning to develop an appetite for alternatives. Companies are seeking a new India - countries that can provide high-quality outsourcing services at low cost.
Israel is trying to fill this new need. The outsourcing market could generate hundreds of millions of dollars in annual revenue and create thousands of local jobs. On this assumption, the first conference of its kind was held in Manhattan yesterday with the goal of alerting the US business community that Israel is an attractive alternative to countries that have traditionally provided outsourcing services.
Israel Minister for Economic Affairs in New York Yair Shiran told "Globes", "This is a niche that Israel can fill very well. Although Israel's labor costs are higher than in Asia, but they are still significantly lower than in the US by 30-50%. At the same time, the quality of Israeli outsourcing services will be much higher and a customer calling from the US will be unaware that he is speaking with someone thousands of miles away."
The reason for Israel's edge is the thousands of native English speakers in Israel. Shiran added, "The Israeli at a call center who answers a call from someone, say, in Miami, might have been a neighbor of that caller. He knows the caller's mentality, understands the slang, and can chat about the Giants' win."
It could be said, from the point of view of a US company, outsourcing to Israel isn't really outsourcing.
Shiran noted that Israel not only already operates traditional call centers, but also other channels for outsourcing services, such as reviewing documents of a legal nature, analysis of X-ray images, and the provision of software solutions.
Dozens of representatives of US companies that operate for their domestic customers call centers and other services outside the US were present at the conference. They heard success stories from large companies that operate in Israel: telephony giant IDT Corporation (NYSE: IDT), which operates three call centers in Israel; IT security solutions provider McAfee Inc. (NYSE: MFE); Matrix IT Ltd. (TASE:MTRX), which provides solutions to investment portfolio manager AllianceBernstein LP; Ness Technologies Ltd. (Nasdaq: NSTC), one of whose customers is New York Jewish volunteer ambulance service Hatzolah; and Citybook Services Ltd., an Israeli subsidiary of real estate agent Madison Title Agency.
Shiran said, "Israel is still virgin territory for this industry. This conference, and those that will probably follow, are a reminder for US companies that Israel is the next wave of outsourcing."
Published by Globes [online], Israel business news - www.globes-online.com - on April 3, 2008
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