Devott Perspectives: What can China’s Outsourcing Learn from Palestinian?
Source: View: 283 Date: 2015-11-30

The reports of Israeli- Palestinian conflict on TV nearly for each week make Chinese familiar with Palestinian. However, for IT or outsourcing in Palestinian, even industrial participations may not know more either. In the year of 2015, the data shows that monthly income of each person is only 85 USD in Palestinian; the total population is 5.1 million people (just likes a medium-size city in China), the average unemployment rate is 23% that means 39% of young people can’t find jobs. Baidu Baike describes it as “everything needs newborn”; it is a country still has war conflict. However, this obscure Middle East country has outstanding performance in global outsourcing area and becomes a new star.

In July of 2015, Devott has formally made global strategic cooperation with SIG in USA. As a part of understanding customers’ resources for each other, executives of Devott firstly appeared SIG summit that is a club with more than 75% of members are enterprise buyer decision-makers in USA. The standards of formal member of SIG is an enterprises with more than 2 billion USD purchasing amount each year; supply providers as minority also has more strict entering standards. After formally introducing Devott at the scene of summit with more than 800 people, Dawn Tiura, CEO of SIG and Geoff Talbot, vice-president of SIG suggested Devott to directly communicate with delegates from Palestinian. After understood outsourcing development track, achieving results and innovative ways in Palestinian, Devott has learnt more and opened our minds.

The outsourcing development of Palestinian is accomplished in two main businesses – ITO and BPO. This is different from emerging outsourcing areas only focusing on ITO or BPO. Based on good talent and low prices, Palestinian attracts a batch of Fortune 250 big science & technology enterprises such as Google, Intel, Microsoft, Cisco, HP and Salesforce and etc. to build famous outsourcing bases in conflict locations. After many years, matured outsourcing business of Palestinian makes these outsourcing buyers to gradually authorize high-end R & D works to local software companies, and to cultivate stable outsourcing talent team. Among them, a park named as IConnect is also an enterprise has become professional offshore outsourcing base for two medium-size enterprises in USA – Medcor and AECC. In international outsourcing market with fierce competition, even some countries with better outsourcing bases can’t reach these results, not mention Palestinian that is still at brink of war every day.

Then, under situation of weak outsourcing business bases, unstable local politics and lacking of infrastructure, how do they do it? Russ Rosenzweig, the outsourcing spokesman of Palestinian and Kais Salhut, the director of IConnect summarized near ten articles of successful experiences. In opinions from Devott, some experiences may not be effective and important; but these three ideas are worth learning for emerging outsourcing areas especially for China’s outsourcing:

1)       Professional Spirit with Perseverance

This dedicated attitude not only shows in working ability and efficiency (write procedures even in the war – perseverance is the most basic spirit), but also shows in marketing and customer development. For example, in order to achieve a key customer, especially like Google, Microsoft and other industrial giants, outsourcing responsible institution of Palestinian will not only use its own human relationships, but also use resources from conflicted countries like Israel and USD, even other Arab countries. They have hardly operated these resources for many years.

2)       Stand Out and Enlarge Current Advantages

Palestinian has worse outside environment and unstable politics; thus, its talent teams tend to work in offices and can take something that has more than local salary as family support. This kind of working loyalty makes employees to devote themselves into works with careful and professional attitudes. Besides that, as core element of outsourcing business development, talents of Palestinian especially focusing on Jews and Arabians have stored many advantages in IT and science & technology. “Dedication and Profession” for current outsourcing buyers are more valuable than earning less per hour. That is basic quality of Palestinian to be considered as partner for long term.

3)       International Management and Marketing Ability

For offshore outsourcing, language communication and cultural fit degree between outsource countries and undertaking countries have become key elements to reduce outsourcing cost and increase succeed rate of outsourcing. Main outsourcing directors in Palestinian are good at English and European & American cultures, compared with executives from main outsourcing implementation countries such as India and Brazil; they can more understand and communicate with each other. Outsourcing teams of Palestinian strictly accord with processing regulated by customers (concentrating on USA) to undertake projects and to ensure quality management. This not only in communication but also in management reduces huge amount of delivery cost  of outsourcing business between buyers and providers.

Outsourcing development road of Palestinian also gives us a benefited thinking – enemy is not forever enemy, competitor is also not forever one. The historical contradiction between Palestinian and Israel has kept for long time; however recently the two countries are using cooperation of science & technology and commerce to resolve conflict and to promote local peace. Science & technology industry in Israel has obvious features in the world even has obvious advantages in some areas. With increasing salary in Israel, many enterprises begin to have interest in science & technology talent with high quality and low cost in Palestinian. According to statistics from international disaster relief organization, 32% of enterprises in science & technology industry in Palestinian have cooperated with Israel’s companies via sales and outsourcing contracts. Meanwhile, in the year of 2013, science & technology companies in west river area of Palestinian have increased to 300; and have more than 4500 employees; which is benefited from investment, training and capital from Israel. These elements provide rare market opportunities for science & technology outsourcing development in Palestinian objectively.

China’s outsourcing has been always singing “beyond” song for near ten years, but now is calmer. Devott believes it is a good thing. The importance of China’s outsourcing market (no matter buyers or providers), outsourcing talents and technological levels are not reduced because of “calm down” of appearance, but more important. If it is time for China’s outsourcing to “exit then to net”, to learn experiences from each aspect has become more important even learning Palestinian. Modesty and solidization are two prescriptions for China to recover activeness.

This post is a personal or group view of Research and Advisory members and don't necessarily represent Devott's positions, strategies or opinions.

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