Albert Subbloie, CEO, Tangoe
The last decade or so has been a major tipping point in the globalization of the business market across all technology sectors and verticals. Many factors have contributed to this, including the emergence of China as a major economic player in the world market, the introduction of the Euro, and the rise of mobile and social technologies, leading to an increasingly connected business landscape.
As technology advances, the rate of globalization will only continue. In order to successfully build global presence, organizations need to act quickly and enter regions before their competitors do. Any enterprise that has its sights on being a future market leader should put a globalization plan in place now. I’ve been fortunate enough to take my company global, and will share some advice for other entrepreneurs that are considering how and when to take the next step in their international expansion.
One of the most important factors for any company to understand, regardless of its size or breadth, is that it’s necessary to respect the cultural differences in each region. There is a huge wall in relationship-building within regions, and even within the borders of the countries in each region.
This is true of every part of the world: France has different cultural protocols than Germany or Holland, for example. Cultural differences are even more pronounced in a region like Latin America (LATAM) where there are two different primary languages—Spanish and Portuguese.
Scaling the Cultural Wall
In order to understand the varied nuances in each region, a local presence is vital. For example, when conducting business in Brazil, the company needs to have a publicly facing figure within the region who speaks Portuguese and can act as a “bridge employee.” That is, they know the company inside and out, but also speak the targeted region’s language fluently, have family within the region, and are familiar with all the country’s cultural profiles. This is an important role and may even be the first person the company decides to hire as they remove the gap between the company’s headquarters and operations and the new in-region team. The organization should be prepared to recruit and train from within each region.
Evaluating the Market
There are two types of customers: local and non-local. For example, a U.S.-based company may have many other U.S.-based companies as customers, which may have businesses in Europe or Asia Pacific. Depending on the company’s business solution, it may be possible in that case to sell from the U.S. and dabble overseas. However, that approach will not work for a company that is based in the UK or Hong Kong. Then, a local presence would be necessary to win local customers.
There are also two different types of local presence: distribution channel presence, which can be done directly or through partners, and operational client support/client presence. The end goal is to have both kinds of local presence, but it’s not necessary in every region the company is targeting. For example, a company in Holland can support some of its operations in EMEA. But it is unrealistic to think that an English-speaking company in EMEA can conquer all non-English speaking countries in the region.
There are also legal implications to consider when going global, and the legal entity requirement when hiring in-region is complex. The organization must set up a legal entity, establish a local bank account, and obtain local counsel and a global accounting firm. It’s important to be patient throughout this sometimes lengthy, but necessary, process.
When planning for global expansion, organizations should think through the entire global strategy and align the appropriate resources. Most importantly, they should act quickly. EMEA especially is a very progressive region, and organizations should lay the groundwork for expansion there early. Otherwise, they could find themselves in second place to a local player, or another emerging company that had the vision to enter the market earlier. A good benchmark of whether a company has successfully penetrated a region is when it is seeing 20 – 50 percent of its business from outside its core region.
Going global is the next logical step for successful companies that are already seen as leaders in their core markets. And in the race toward globalization, the companies that win will be those that act now. Through a combination of the right timing, appointing local resources, and understanding each region’s cultural differences, organizations can reap the benefits of going global.
Albert Subbloie, President & CEO, Founder, Tangoe is recognized as a telecommunications technology and Internet pioneer, Al brings a visionary approach to Tangoe. In 1984, after leaving Andersen Consulting, Al co-founded and served as CEO of Information Management Associates (IMA). Al was among the first to develop and market both call center voice and data solutions for integrated sales, marketing, telemarketing, and customer service activities. He guided the growth of this market-leading company to more than $50M in sales, and more than 300 customers in seven offices worldwide. In 1997, Al co-founded Buyersedge.com and later founded Freefire, a web enabled e-CRM customer interaction software, supporting email response, chat, and remote telephony in an ASP model involving complex data distribution requirements (Freefire was subsequently acquired by Teletech Holdings). As an innovator and visionary, Al is credited with numerous patents.