In Europe, outsourcing is a delicate topic. Some politicians picture it as an epidemic that must be be stopped, as new hubs in India threaten local business. On the other side of the Mediterranean, outsourcing has gained a much better reputation, as lucrative outsourcing contracts have benefitted thousands of engineers in North Africa, giving rise to a large pool of software companies that exclusively serve Europe.
Captivated by the competence of Tunisian engineers, tech companies such as Alcatel, Ericsson and STMicroelectronics have made El Ghazala, a suburb of Tunis, their home in North Africa. Call center services have also witnessed impressive growth and have greatly contibuted to the Tunisian economy by employing thousands of young graduates.
Surviving political turmoil
Despite this traction, the political upheaval in 2011 harmed Tunisia’s appeal as an outsourcing destination, as a wave of economic difficulty caused all but the most solid companies to fold.
Tunisian entrepreneur Walid Boudabbous was one of those able to keep his IT outsourcing company, Acceleate, afloat.
When it first launched in 2006, Acceleate had followed a well-trod path in the outsourcing industry. After working with big clients as an enterprise resource planning consultant in Europe for over 10 years, Boudabbous pinpointed an opportunity to serve client needs while paying lower operational costs from his home country, Tunisia.
Armed with several partnership agreements, he began training local talent on his existing clients’ technologies so that Acceleate could perform system upkeeep and customization. As he worked to supply expert engineering for a lower cost than most development companies in France, Acceleate won numerous contracts in Tunisia and in the European market.
It may have seemed easy at the beginning, but growing competition from other countries and the loss of business due to the Arab Uprisings have pushed Acceleate to continually innovate to stay ahead.
Here’s are three ways that Acceleate dealt with the challenges of doing business after a revolution:
- Training the local workforce
Expatriates who return to the Middle East often face difficulties adjusting to the expectations of the local talent pool, given local gaps in education and technology. To face this challenge, Boudabbous began by employing graduating students who sought to work on a six-month project. He then trained these students in communication skills, task management and work ethic.
“The idea is to avoid micromanaging, and let them take charge of the project,” he says. “They might commit mistakes, but they will end up feeling that they are real drivers of the company’s future, which is very useful especially at times of crisis and financial pressure.”
- Adapting to find new local markets
Outsourcing is not an easy business. Indian players may not be a direct threat to the IT industry in Tunisia, mostly because they do not speak French, but they have to watch for competition from Eastern Europe and Morocco. The "onshoring" trend in the United States could also be replicated in Europe.
These trends loom, but maintaining close ties to potential clients has helped Acceleate retain its business during the revolution. When the local situation in Tunisia caused some of his European clients not to renew their contracts, Boudabbous began focusing more on Tunisian companies, which now comprise 40% of Acceleate’s clients. A bit of innovation helped; creating affordable prodcuts tailored to local banking needs helped lure many large Tunisan banks. “Outsourcing is a niche market; you always have to seek new opportunities, new technologies and new ways to add value,” he adds.
- Focusing on the positive outcomes of the Arab Uprisings
2010 marked a year of amazing growth for Acceleate; unfortunately, the Tunisian revolution put a dent in business after 2011. While corruption and a lack of transparency have since grown in the country, one upshot is that the banking climate has improved, as major players have been willing to reform and comply with better standards and focus more on their IT offerings. Focusing on the positive has kept Acceleate chasing these opportunities. “The revolution hit us hard,” Boudabbous confesses, “but I remain very optimistic overall.”