Outsourcing&More - issue 1 (october-december 2011) by Pro Progressio

nr 1 (1)

November/ December 2011 (bi-monthly magazine)

issn 2083-8867

Shared Service Centers Strengths of the West Pomerania Is strategic sourcing

purchasing?

Everything about Outsourcing Poland vs Outsourcing

What is Outsourcing?

Education vs Outsourcing

Who is who in Outsourcing?

www.outsourcingportal.eu

Editorial note Free magazine Editor-in-chief Dymitr Doktór d.doktor@outsourcingandmore.pl Art./DTP Jacek Cieśliński Main editor Radosław Wroński r.wronski@outsourcingandmore.pl Commercial reklama@outsourcingandmore.pl Published by RIPOSTA Doktór S.J. ul. Dolna 21b/40 00-773 Warszawa www.riposta.pl Editorial address RIPOSTA Doktór S.J. ul. Dolna 21b/40 00-773 Warszawa Tel.: +48 22 213 02 45 Fax: +48 22 213 02 49 redakcja@outsourcingandmore.pl www.outsourcingandmore.pl Print: Drukarnia Jantar Subscriptions: Outsourcing&More is bimonthly free of charge magazine. See the website www.outsourcingandmore.pl for more details All rights reserved. No copying, reproduction or photocopying allowed without written consent of the publisher. The views expressed in this publication as well as the content of the adverts are not necessarily those of the editor. Circulation: 3000 copies

Dear Reader, You hold in your hand the first Polish-English b i-monthly magazine dedicated to the outsourcing industry. The Outsourcing&More Magazine, thanks to our Partners and relationships we built with many organizations, is distributed free of charge in Poland and many other Countries. Outsourcing is within the last twenty years, one of the most dynamically growing industries. For many years we were used to co-operate with external accounting offices, law firms, tax organizations, call and contact centers, security or cleaning services companies. Each year outsourcing industry expands its range of activities and thus we can observe development of document scanning services, data archiving, car fleet management services, HR and recruitment process management, staff leasing, and in the recent years - Busi ness Process Outsourcing (BPO) in the areas of financial services, IT as well as those related to the law or knowledge process management and many other areas. For a long time, the main centers of global service providers in the model for large-scale outsourcing were Countries such as India, China, Philippines, Malaysia followed by Brazil, Mexico, Central American Countries, but also the Countries of Central and Eastern Europe, among which Poland is nowadays the largest and the fastest deve loping Country in this region. Poland has many advantages, which include an excellent geographic location, availability of modern office infrastructure, developed IT and telecom infrastructure and above all, excellent human resources and the availability of multilingual personnel. These and many other factors made Poland to be chosen by international companies for moving or building of the Shared Services Centers for their corporations, or using the services offered by Outsourcing Centers already located in Poland. The main role of Outsourcing&More is to describe, inform and educate about the outsourcing industry. We are also going to provide you information concerning knowledge about the areas of outsourcing activities, training and conference courses and events, presentations of companies providing outsourcing services, business cases, out sourcing books, profiles of industry leaders. We will also present the investment potential of the Polish regions, provinces, states, special economic zones, technology parks and the cities, where the industry is already present or may develop in the nearest future. We hope that Outsourcing&More will meet your interests and encourage you to share with us your comments. We would like to get your feedback which you can provide us by e-mail: contact@outsourcingandmore.pl. We invite Companies located in P oland to subscribe to the distribution list, making sure you receive your free copy of the Outsourcing&More immediately after its release. To subscribe to the distribution list go to the www.outsourcingandmore.pl. Enjoy the magazine, Dymitr Doktór Chief Editor

November / December 2011

Index 20 Association of Business Outsourcing & More

Service Leaders in Poland

The Association of Business Service Leaders in Poland is a leading industry-related organization representing the sector of modern business services in Poland. ABSL comprises the Shares Service Centers, Business Process Outsourcing ones, the Information Technology Outsourcing ones, the Research & Development ones, as well as the companies supporting the development of the sector.

Poland vs Outsourcing

40 It has to be Szczecin In the past, not much was being said about Szczecin. Its geographical location and educational facilities did not compensate for the lack of sufficient infrastructure, required by service centers. Today experts are calling Szczecin a “hot spot”, indicating that it is a location with great potential. Especially for projects dedicated to Northern and Western Europe.

Education vs Outsourcing

46 Szczecin: the ‘human’ capital As per the theoretical analysis published by Dorota Wiezak-Bialowolska PhD, human capital consists not only of the acquired degree, knowledge and other predefined abilities of a group of individuals, but also includes possible interests (skills learned) and their beliefs (multiculturalism, openness etc.). The desire to innovate, solve problems creatively and analyse various strategies is also important.

Who is who in outsourcing?

56 Interview : Piotr Krzystek – Mayor of Szczecin

Outsourcing&More asks the Mayor of the capital of West Pomeranian Voivodeship about the outsourcing possibilities in Szczecin. How to cooperate with local authorities, special oportunities for inwestors, and we will be told what is the Floating Garden 2050 Program.

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November / December 2011

8 News 12

Is strategic sourcing purchasing?

Shared Services Centers

The sector of modern business services in Poland

Association of Business Service Leaders in Poland

Szczecin – Poland’s developing office market

The West Pomerania Region: INVEST IN THE NORTH-WEST

Slupsk Special Economic Zone

It has to be Szczecin

THE POMERANIA TECHNOPARK

Szczecin: the ‘human’ capital

Infrastructure Investments in Knowledge, Education and Economic Cooperation

The University of Szczecin

Interview: Piotr Krzystek - Mayor of Szczecin

Scientific Services

From optimism into pragmatism?

Corporation cards

IT Outsourcing Intelligence Report 2011: Western and Northern Europe

Important dates

Polish Outsourcing Forum

Office spaces

November / December 2011

Outsourcing & More | News

News Foreign investors train young specialists in Tri-City. Sony Pictures, Transcom, Geoban and Bank BPH, will take care of future supply of talent for BPO /SSC in TriCity. Within ‘Education through practice’ scheme the employees of the companies will run specialist courses for students from a secondary school. The first course will start at the prestigious Gdansk Secondary School no III at the end of October.

“We are extremely happy that thanks to the support from local authori ties and the initiative of businesses in the sector, we have succeeded in launching the education project so quickly – explains Radosław Krasowski, HR Manager in Geoban. Specialist from BPO/SSC sector will pass on their in - depth experience and knowledge to the students from Gdansk Secondary School no III. The course highlights future expectations of the employers from this rapidly growing sector. We owe many thanks to School Principal for courageous decision to bring business and education together.”

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New edition of Investing in Poland! The main aim of Investing in Poland is to present and promote Poland’s economic and investment potential to investors, giving an overall view of the country’s investment climate as well as specific information on regions and cities. The publication is aimed at both Polish and foreign investors, be they individuals or multinationals.

‘The analysis of priority sector of Pomerania Region’ has identified six sectors which have the largest growth potential in the region. One of them is BPO/SSC. Education of future talent provides access to the pool of well prepared employees in the future. Such a need was indentified by the investors whose BPO centers are based in Tri-City. Along with the representatives of Investinpomerania and Gdansk Secondary School no III, they have decided to launch a year- long course designed to prepare students to work in BPO /SSC Sector. ‘The course responds the market need’ – explains Mr. Michalski from Invest In Pomerania. Tri-City is one of the most attractive agglomerations for BBO/SSC sector and by launching such initia tives as ‘Education by practice’ we are making it even more attrac tive. Multinational companies are looking for new places where they can cut costs of data or finance management, and most importantly, where they can find well educated workers with language skills. The course ‘Education by Practice ‘ aims at making secondary schools students familiar with BPO/SSC sector and at showing necessary skills to work for the sector. The course students will get to know specific nature of the sector, specialist language. They will learn to use basic computer programmes necessary to work in the sector. The participants will also visit BPO/SSC centers involved in the course so as to learn the nature of corporation work.

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Investing in Poland includes analyses of particular voivodships in Poland in terms of investment attractiveness and descriptions of potential investment locations - such as special eco nomic zones and technology parks - as well as insight into regional development. Other chapters touch on such topics as: an overview of regulations and terms of launching and running business operations in Poland, data on the Polish economy, infrastructure, basic legal and tax regulations and investment incentives an investment opportunities The topics are supplemented with tables, graphs and contact details. PricewaterhouseCoopers and PAIiIZ are content partners in the publication.

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The launch is accompanied by conference on investment in Poland and the Polish economy. The event - aside from presenting the investment climate and the economic potential of particular regions, includes information on the practical aspects of running business activities in Poland. Initial circulation amounts to 12,500 copies. Besides regular shop sales, Investing in Poland 2011 will also be distributed among members of chambers of commerce, representatives of foreign embassies and consulates, Polish commercial and economic centers abroad as well as during the most high-profile trade fairs and conferences. The publication is available for download from the WBJ.pl and the PAIiIZ websites.

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PAIiIZ attracted 7 new investors the Polish Information and Foreign Investment Agency supports 170 investment initiatives. During the last two weeks the Agency started to run 7 new projects!

As for the most popular sector in which investors decide to develop their projects, it is still the automotive sector with 31 open projects worth EUR 2.3 billion and 14371 potential jobs that tops the list. The leading sector is followed by BPO – 28 investment initiatives in which entrepreneurs are ready to invest EUR 39 million and thus to create 9461 jobs and the machine industry which attracted 16 investment schemes worth EUR 705 million with the prospect of 3661 new jobs. Poland is attractive also to investors active in ICT (10 projects), the chemical industry (9 projects) and the R&D s ector (7 projects). During the last two weeks PAIiIZ successfully finished negotiations concerning 8 projects and initiated negotiation procedures in 7 new investment initiatives. In 2011 the Agency has already closed 36 investment projects worth a total of EUR 970.8 million. Thanks to the projects 8366 jobs will be created. (PAIiIZ)

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Poland the sixth most attractive place for investment Poland is strengthening its already well-established strong p osition in the world investment arena. We are behind such international giants as China and the United States, but ahead of Germany and the United Kingdom.

Projects currently run by the Agency are worth EUR 6.2 billion and the number of jobs which they will generate may exceed 47 000. US investors still constitute the most numerous group of entrepreneurs who run their projects with PAIiIZ – the Agency has c urrently been supporting 39 projects from the USA. The projects are jointly worth EUR 1.1 billion and may create 8667 jobs. A mericans are followed by the British – PAIiIZ has been now developing 18 British projects worth EUR 355 million which will in the future generate 6158 jobs. The third most numerous group is the group of Chinese projects - 15 projects worth EUR 246 million. The Chinese undertakings may create 3046 new jobs. The Agency runs also numerous projects from Germany (13 projects), South Korea and Japan (11 projects from each of the two countries).

Against this background, according to an IbnGR report p ublished at the beginning of 2011 Małopolska province holds fourth p lace in the country as regards attractiveness for investment. The r egion is maintaining its position, making the biggest progress in the very category concerning activities aimed directly at investors: development and promotion of a regional investment offer, direct contact with the business environment, international cooperation and a regional investor service system. Such a significant change

November / December 2011

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in the province’s position in this category is all the more pleasing as it comes during the operation of the Małopolska Business Centre ( Małopolska Regional Development Agency SA, Mało polska Province, Kraków Technological Park) and the commencement of a range of initiatives directed at investors. CeBiM is presently undertaking 4 projects. To date, a sum of 6.5 mln PLN has been received for all current initiatives. The Centre has already provided service to nearly 200 international investors, and at fairs and conferences in Bombay, Chicago, New York, Florida, Shanghai, Hannover and Edinburgh close to 40,000 people have become acquainted with Małopolska’s offer; over 300 individual exporters have received assistance by direct c ontact in finding markets for their goods.

7th place in the ranking of the best regions in Eastern Europe, and in 2010 Małopolska was near the top of the most attractive P olish regions for investment according to IBnGR 2010. Kraków, the capital of Małopolska, took 1st place in the ranking of the Top 10 Emerging Outsourcing Cities in the category of “emerging locations”, which made the city 11th in the Top 100!!! World Investment Report Despite the drop in investment in Poland during 2010 (from 13.7 to 9.7 bln USD) there is currently a clearly observable growth trend in international projects – the value of BIZ inflows after the first five months of 2011 amounted to 4.2 bld EUR, which is 86% of the value of BIZ from the first five months of 2010 and 62% of the total from the same year. In the European context this trend has already been noted in the Europe Investment Attractiveness study published each year by E&Y, which showed that in 2010 Poland recorded the largest growth in the number of BIZ projects in all E urope. 40% more projects were undertaken in 2010 than in 2009. This year’s UNCTAD World Investment Report forecasts a strengthening of the dynamics of direct foreign investment flow in 2011, estimating its growth from USD 1.4 to 1.6 trillion, which would match pre-crisis levels. In 2012 and 2013, estimated BIZ inflows should reach USD 1.7 and 1.9 trillion respectively. Among the factors responsible for creating such expectations of growth in world BIZ are: growing transnational corporate financial reserves resulting largely from slowing investment during the crisis; restruc turing of many companies forced by the crisis (including the moving of operations to cheaper locations and the growing role of BPO, visibly strong as in the case of Poland); rising market valuations (investors will buy before prices increase even more); selling off of shares in companies taken over by governments as part of attempts to battle with the crisis. As regards recipients of investment, ongoing corporate and industrial restructuring, privati zation resulting from fiscal balance and the expansion of public assistance programs along with growth in emerging economies should create new investment possibilities. The return of world investment flows to the level forecasted may be hampered by such risk factors as unpredictability in global economic management, the possibility of a general debt crisis and fiscal and financial imbalances of the sector in some developed countries, as well as a growth in inflation and signs of overheating in the largest of the emerging economies.

During the operations of CeBiM, Małopolska has achieved 2nd lace in the FDI Magazine rankings (Financial Times), in the cate p gory of best promotional strategy for Direct Foreign Investment, 2nd place in the ranking of the Top 5 Eastern Regions FDI Strategy,

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In 2010 the growth of emerging economies, which are the new driving force of BIZ, became more visible. For the first time, developing countries and economies undergoing transformation absorbed over half of the world’s BIZ flows. Furthermore, this group is investing increasing amounts in the form of BIZ – in 2010 there was a 21% growth in investment in these countries, and they currently constitute 29% of global BIZ. Six developing and

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transforming economies found themselves among the 20 largest investors in the world. The outstanding position of Kraków, recognized by UNCTAD as the best place for the growth of BPO projects in the category of Locations for global services outsourcing: Top 10 emerging cities, confirms the consolidation of the trend in which Polish cities are viewed as the best locations in the world for activities related to services for business.

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PRIME RENTS AND YIELDS STABLE ACROSS EUROPE

Holberton continued: “Investment turnover actually rose margi nally in the third quarter, but investors remain generally circumspect and heavily focused on core, prime assets. It is notable that, in the context of generally limited yield movement this q uarter, Paris and the City of London were among the few office markets where yields moved lower, reflecting their attractiveness in terms of m arket depth and liquidity”. Yields Office yields across Europe fell slightly during Q3 2011. The CBRE Prime Office Yield Index for the EU-15 fell by four basis points in the quarter and 20 basis points against the same quarter last year. Twelve of the 53 locations surveyed saw downward yield movements this quarter, 40 remained unchanged, and one saw an increase. The largest decrease was in Istanbul (down 75 basis points to 7.75%). Durban and St Petersburg each recorded falls of 50 basis points, while the remaining falls were of 25 basis points or less. The only increase in the quarter was in Tel Aviv where yields rose by 50 basis points to 8%.

Economic Uncertainty Stifles Market Growth in Q3 2011 London, 11th October 2011 – Amid the flow of significantly nega tive economic news and nervousness in the financial markets, prime commercial property rents and yields held firm in the third quarter, according to the latest figures released by CBRE. Continuing the pattern that has emerged over recent quarters, prime rents saw little overall change across Europe in Q3 2011 in any sector. The CBRE EU-15 Prime Office Rent Index was unchanged in the third quarter, with the vast majority of consti tuent locations seeing no change in the prime rent level. Industrial rents were similarly flat, while high street retail rents continue to see the strongest growth albeit up by only 0.7% this quarter. Richard Holberton, Director of EMEA Research at CBRE, said: “The market background over the past quarter has been dominated by concerns over the escalation of the Eurozone sovereign debt crisis, and its possible market consequences. This has clearly heightened occupier caution towards new building commitments and tempered the rental recovery. At the same time we are seeing more evidence of tenants increasingly favouring modern prime space across all sectors, and as a result a growing polarization between prime and secondary space.” With a high degree of economic uncertainty and limited rental momentum, prime yields also saw little change in the third quarter. Yields in each of the three main sectors fell by less than four basis points in Q3, with yields in most locations unchanged from the previous quarter. Any yield changes in the core Western European markets were mostly slight, with larger changes confined to peripheral or emerging markets.

Industrial yields were effectively unchanged over the quarter, with the CBRE Prime Industrial Yield Index for the EU-15 down by one basis point, leaving it 15 basis points lower on the year. Ten of the 46 locations surveyed saw downward yield movements this quarter, 33 remained unchanged, and three saw an increase. The largest decrease was recorded in Istanbul, where yields fell by 100 basis points to 10.5%. Moscow and St Petersburg each saw falls of 50 basis points. Increases of 50 basis points were observed in Lisbon and Barcelona. Rents Prime office rents across Europe remained stable during Q3 2011. The CBRE Prime Office Rent Index for the EU-15 was up by a notional 0.1% in the quarter, but showed a year-on-year increase of 1.9%. Eight of the 53 locations in the survey saw increases in the level of prime rent, four fell, and 41 remained unchanged. The largest increase in Europe occurred in Moscow, where rents increased by 9.5% over the quarter to $1150 per sq m per annum. Any rental declines were generally slight, but Sofia saw a decline of 3.6% to €162 per sq m per annum. European industrial rents were effectively stable in the third q uarter. The CBRE Industrial Rent Index for the EU-15 rose by 0.1% in Q3 and is down by 0.2% over the year. Thirty six of the 46 locations in the survey saw the prime rent remaining stable, two fell, and eight showed an increase. The largest fall in Europe was in Vienna (down 1.02% to €58.20 per sq m per annum) while the largest increases were in Istanbul (up 7.7% to $7.00 per sq m per month) and Rotterdam (up 4.5% to €70.00 per sq m per annum). Source: CBRE, Outsourcing Portal - www.outsourcingportal.pl

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Is strategic sourcing purchasing? ompany. Purchasing departments experienced, and in many c cases still are experiencing, a particularly hot time. As a result, the subject of purchasing strategies has become fashionable. New business concepts appeared in the circulation, such as strategic sourcing and strategic procurement. However, regardless of the complexity of the terminology, and regardless of how many times the word „strategic” is used, in most cases we are dealing with very simple processes of renegotiating rates in existing contracts. What has struck me recently, is another issue - the wrong use of terminology „sourcing” or „strategic sourcing” to describe actions that are in fact normal purchasing activities in companies. So what is the sourcing strategy of firms and how does it differ from the previously performed normal procurement processes? I believe that the fundamental distinction between these activities is related to the fact that the processes of purchasing (procurement) is focused primarily on transactional purchasing processes and does not have much in common with the strategic level in the company nor with the responsibility for strategic d ecisions. Of c ourse, no one today says that the only obligations of purchasing departments is to accept the order of the internal business customer, buying the right product or service from external suppliers and issuing a bill. Responsibilities of purchasing departments have evolved considerably, and, among them, there are also such issues as centralization of expenditure and their optimization by producing the scale effect, risk management in selected areas or ensuring conformity of supplied products or services with internal regulations and standards. In mature organizations, the norm is that the purchasing department controls all of the company external expenditures. Changes in business in recent years have been clearly visible to all of us. It is increasingly difficult for a company to fulfill its statutory duties. Huge competition, demanding customers, very short product life cycles, the need to maintain transparency of opera tions, expectations of profitability on the part of shareholders, demanding regulators... the list can be very long. The economic crisis of recent years, intensified these processes even more and made the already difficult managers’ life significantly more difficult. One of the elements, which in this case became important, was the verification of purchasing policy in companies. It is not difficult to notice that in the past few years, in most cases, the c ompanies’ managing boards stopped initiatives related to implementing new systems, tools or technology, and, instead, focused on a simple in its essence and at the same time radical cost-cutting. And it is hardly surprising - this type of action in many cases brings immediate results, reflected in the performance indicators of the

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Lately, there has been a trend for the purchasing departments to evolve to an even higher level in the organization – to the strategic level. These sections turn into real business partners for the m anaging board, assuming responsibility for creating a sourcing strategy for the company and its subsequent manage ment. W ithin the scope of responsibility of those teams are such factors as constant analysis and monitoring the strategies of their own c ompanies, assessing its internal potential and limitations in selected areas, analyzing the market maturity of external suppliers, or choosing the optimal sourcing models for the contracting of certain services. And here we come to the key point - the distinction of standard procurement processes and sourcing strategies. So let’s try to answer the question - what is sourcing? According to the defi nition proposed in 2011 by Fred Sollish and John Semanik:

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„Strategic sourcing is an organizational procurement and supply management process, used to locate, develop, qualify, and employ suppliers that add maximum value to the buyer’s products or services. The major objective of strategic sourcing is to engage suppliers that align with the strategic business and operational goals of the organization.„ It is important to note that strategic sourcing does not include the day-to-day, routine activities of the acquisition process, such as the analysis of the offers prepared by the supplier or the payment process. Sourcing strategy of the company may, however, provide guidelines for the sourcing of procurement processes themselves! The three most common approaches of businesses to this issue include: 1. Recognition of procurement processes as core business of the company and operating them only through full-time employees, regardless of intensity, quantity or the specifics of these processes; 2. The transfer of all procurement processes to the outsourcer, leaving on the client side only the team managing such contract and the relationship with the outsourcer; 3. Mixed approach - some of the internal procurement processes is transferred by the company to the outsourcer (usually the less complicated but frequently occurring processes - such as payroll processing), while the other processes (the more complex and considered to be strategic) are still carried out within the framework of the firm.

As it can be seen clearly, calling the purchasing department standard activities „strategic sourcing” is at least unauthorized. Sourcing, which follows from its very definition, is an issue far more complex and having a direct relationship with the company’s business strategy. According to Gartner’s specialists methodo logy, sourcing strategy development process and its subsequent management consists of the following basic steps: 1. Analysis of corporate strategy in selected areas (e.g. finance, IT), the definition of core business for the company as a whole and for each of its departments; 2. Analysis of needs and internal potential of the company in a selected area and the so called gap analysis, the assess ment of the discrepancy between the needs and plans of the company and its real internal potential; 3. Analysis of opportunities and market potential, as well as the maturity of external suppliers; 4. Selection of the optimal sourcing model; 5. Ongoing management of implemented sourcing strategy. Each of the above stages will be an extensive independent project that can be implemented at different levels of detail. Let’s consider, for example, the analysis of the possibilities and potential of the market, as defined in step 3 above. The analysis in step 2 (analysis of needs and maturity of the company) should give the information on what is recognized by the company as its core business, what is the maturity, limitations or needs of the organization in selected areas. As a result of this analysis some indications of areas in which it is worth looking for external service providers should appear. Looking at the market offer for pre-designated areas should therefore be the essence of the work carried out in step 3.

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The primary objectives of this stage is to analyze the maturity of suppliers, the stability of their companies, resources at their disposal and the level of sophistication and maturity of the m arket offer related to different groups of services they are offering. After this step the company should thoroughly understand what the individual service providers could offer and in what time frame they are able to deliver their services. The work involved in creating sourcing strategies in this step can be implemented for selected groups of services in three main ways: Method 1: involves acquiring information through: a. gathering the complete information held by company employees on individual service providers in one place, and then standardizing the information; b. gathering publicly available information on individual providers; c. purchasing market reports offered by analyst firms; in this case, it is worth remembering that the information obtained should relate to the market on which the company operates (such as the Polish market) and take the character of the scale of services into account; this method of action is the simplest and quickest, but results in the least precise feedback. Method 2: employment of a specialized consulting/analytic company, which will present a market offer for service areas designated for performing the comparison. In this case, the key is choosing the right advisors, who have real, comprehensive and current knowledge about the market potential in the area. Such an approach can prove to be of additional value to the company - the advisor can provide initial verifying of areas identified by the managers as candidates for supporting by external compa nies. An experienced consultant can also identify other areas that initially were not considered by employees, and which, because of the market offer, are worth including in the area subject to analysis; this method will result in much more accurate information than method 1, but its costs will be higher. Method 3: the next potential way to acquire knowledge about the market offer in selected service areas is to treat the whole process as an initial step of the tender. This process will build on infor mation developed within the organization in the early stages of creating a sourcing strategy and its main element will be the creation of an appropriate inquiry into the market. Depending on the knowledge of the company on a particular business

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process, RFI (Request For Information) or RFP (Request For Proposal) inquiries should be made. such an approach requires probably the biggest financial invest ment and commitment of employees, but also provides the fullest information about the opportunities currently a vailable in the market; the process can be implemented by the company itself, or it can be subcontracted to an external consulting company as a whole or partially. In this type of action it is worth to use the knowledge or any specific studies already owned by the company to their full extent. For example, you may find that the management of the IT department already has developed rules for the use of external contractors and strictly determined which of the functions or roles can (and should) be contracted on the market, and which were considered critical and may be carried out only by full-time employees. Such studies will certainly represent a significant contribution to the c reation of enterprise sourcing strategy. As we can see, the process of sourcing strategy development is a relatively complicated task and is significantly different from what in most cases is done by purchasing departments. It should also be admitted that this is a relatively young field in the global business and experiences associated with it have been so far relatively modest. However, it seems that there is no return from this direction of transformation of the purchasing departments. It is certainly an enticing vision for the purchasing department managers who believe in their significant potential and want to be seen as serious partners in business by the managing boards of companies. Author Piotr Rutkowski Managing Partner SourceOne Advisory www.sourceone.pl

Outsourcing & More | AktualnoĹ&#x203A;ci

November / December 2011

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Shared Services Centers Shared Service Centers (SSCs) have been around for a couple dozen years, and have been operating in Poland for over ten years. In the globalization age, popular SSCs are the first step towards the optimization of processes both in the private and public sectors; in large organizations, medium-sized and small companies.

The establishment of SSCs is the first step towards outsourcing on a larger scale, the final effect of which is or can be entrusting services in an outside Business Process Outsourcing Center (BPO). Yet before this can take place, an organization needs to manage its own processes in an organized manner – in which case the establishment of an organization’s own SSC is advised. Shared Service Centers established by organizations can provide a broad spectrum or services or specialize in a narrow field. Narrow specializations can encompass financial and accounting process management (so-called F&As), customer relationship management (CRM), purchases, legal processes, research, development, employee recruitment, personnel management, IT processes and many other fields. A wide specialization can encompass a few, a dozen or tens of functions. As far as the geographical location of SSCs is concerned, there are a few models, depending on a company’s development, organization type, costs, management methods, supervisory and controlling methods, as well as the management’s approach to processes redirected from headquarters to the newly-formed entity: 1. Nearshoring – the Shared Service Center is located close to company headquarters. 2. Offshoring – the Shared Service Center is located in a foreign country, often very far from company headquarters, on a different continent. Both models are also applied to outsourcing. The reasons for which organizations decide to create Shared Service Centers are not limited to cutting the costs of running a business, although initially this is the main reason. Apart from cost optimization companies wish to unify the standards of business operation, increase control or reduce personnel costs. This last reason is strictly intertwined with the first: cutting costs. In the case of nearshore models, selected staff members migrate to the newly-opened center. In the case of offshore models, a new team is usually formed – both on the management level and as far as specialists are concerned. As shown by numerous examples, SSCs are built by telecommu nication companies, media companies, financial firms, food

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hains, IT companies, insurance firms, FMCG companies, conc struction companies and many others. For an SSC to be established, several conditions must be met: 1. The creation of the center must be economically justified, 2. Access to qualified workers is necessary (profession-related knowledge and knowledge of foreign languages), 3. Information and communication as well as energy safety must be ensured,

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4. The geographical location of the Center must ensure communication with the units managing it (plane, train, highway), 5. Modern office space is necessary.

According to the information contained on the Government Shared Service Center’s website (www.bip.cuw.gov.pl) this organization reduces the costs of the government’s administration.

Currently Central and Eastern Europe is the global center for SSC and BPO investments. Among recently-formed centers most are located in Poland, the Czech Republic, Romania, Bulgaria or Hungary, as these countries simultaneously meet all of the above conditions or most of these conditions.

The primary activities of the Government Shared Service Center include: 1. Services, deliveries and construction work for the Chancellery of the Minister of Poland, undertaken in order to ensure the realization of public tasks performed by the Chancellery of the Minister of Poland; Management, maintenance and administration of property, Creating a conference and training base for the Government and government administration bodies, as well as recreation services. However, conference and training services will be the dominating aspect of the Center’s activities during the current budget year, Investments and modernization, Publications and graphic design, including the print, distribution and sale of government periodicals, Public tender procedures, Services for the administration, budget and technical sectors, including the administration of the communication and information system and network, together with systems used to process undisclosed information, Meeting residential needs of persons holding top positions in the government, as well as of other entitled persons. 2. Financing or providing additional financing for tangible assets used during construction, as well as the purchase of tangible assets and modernization; 3. Conducting common or central public tender procedures in accordance with the Public Tender Act of the 29th of January 2009.

When considering the staff potential of our part of Europe, the increase of available office space, the development of fields of study offered by higher education facilities and – foremostly – the largest global concentration of foreign language education, we can be sure that the number of SSCs will continue to increase in the years to come. While the offshore model is mainly utilized by the private sector, the public sector nearly always utilizes the nearshore model. A good example in Poland of a public SSC is the Government Shared Service Center established in mid-2010.

The idea for the creation of the SSC is a good initiative of the public sector; the center centralizes, optimizes and services the various tasks and processes performed by the government’s intu itions. We hope that this will not be the end of the public s ector’s undertakings to optimize its processes, both in Poland and in other countries. Outsourcing & More

November / December 2011

Outsourcing & More | Articles

The sector of modern business services in Poland The Report of the Association of Business Service Leaders in Poland (ABSL1) In 2011 Poland strengthened its position of an unquestionable leader with respect to the number of centers and employment in the sector of modern business services in the Central and Eastern Europe. Poland’s competitive edge comes predominantly from the highly skilled staff, stable economic, political and social conditions, as well as its attractive geographical location that entices in parti cular the nearshore projects from Western Europe. In the years to come Poland may become one of the most focal locations for outsourcing investments in the entire Old Continent. However, further development of the industry will depend to a large extent on the consistent and business friendly pro-investment policy, long term deliberate efforts aiming at the raising of the skills of Polish experts, as well as on the quality of the schemes employed to promote Poland in the international business environment. The Polish modern business service market is currently estimated to be worth more than US$ 3 billion (service export abroad). There are 282 service centers in Poland with foreign capital, owned by 220 investors, employing already more than 70 thousand experts. These are the best figures in the entire region. - I believe Poland will make the most of its advantages and soon it will be in the lead of the finest locations for modern business service investments, not only in the region, but also in the world - says Marek Grodziński, Board Member of Capgemini, Vice President of the Management Board of ABSL responsible for supervision of research projects of the organization. - This year’s ABSL report demonstrates some obvious trends which, provided we are able to take proper advantage of, will permit us to claim the leadership in the Old Continent. In the first place, the tendency must be noted to move towards advanced services based on the expertise and requiring involvement of more and more skilled experts. If we strengthen our competence in this respect, we’ll have a chance to become the major European center for service provision to strategic international project - adds Grodziński. The Polish market is dominated by the following types of centers Business Process Outsourcing (BPO), Information Technology Outsourcing (ITO) and Shared Service Centers (SSC). Each year the number of Research & Development centers (R&D) and

the Knowledge Process Outsourcing entities (KPO) increases. Most centers (52%) are owned by the European Union based companies, m ostly French, German, British and Swedish inves tors. Almost one third of the foreign capital service centers in Poland are American investments (88 centers). Also, investors form India have been establishing their centers (12 centers) in Poland more often recently. Our strengths: finance, accounting , IT During the last couple of years Poland reached high specialization in three business areas. The biggest number of centers deals with finance and accounting (98 centers) and IT services (95 centers). The next item on the list is research and development which is performed not only in R&D centers, but also in certain firms providing more advanced IT outsourcing services. In 73 centers processes

1 This report is an outcome of the research project of the Association of Business Service Leaders (ABSL) pursued between January and April 2011. The research was performed based on numerous source materials and using several research tools and analytical techniques. The underlying source of information was the data base of the service centers with foreign capital that carry out their business in Poland.

November / December 2011

Outsourcing & More | Articles

are handled connected with customer service (excepting the IT support), while 42 centers deal with the management of human resources. The KPO investments are a certain novelty in the Polish market. Presently, as many as 23 centers specialize in knowledge process outsourcing projects that require high skills. - The growth of KPO centers in Poland is a result of high availability of qualified experts. In order for Poland to continue strengthening its position as a leading location for the most advanced servi ces, it is required that the university level schools become more willing to cooperate with the companies of that industry and that the syllabuses of those schools be better fit to meet the business needs - says Krystian Bestry, Vice President of the Management Board of ABSL , CEO of Infosys BPO Europe. In addition to typical KPO centers, also the share of the advanced processes has been growing in the portfolio of those investors who have already marked their presence in Poland. The ABSL surveys show that 87% of the centers declared the change of their profile through providing for more advanced services, of which 76% went for new projects without curbing their existing scope of business. The recent analyses also show that Polish centers have been providing more and more comprehensive services. The lion’s share of them combines the service in at least 2 business areas, such as, e.g. finance & accounting and IT. Investors choose agglomerations and graduates The main cities of offshoring business services are Warsaw (54 centers), Kraków (43), Wroclaw (38) and Łódź (31). Those four cities together comprise more than a half of all centers in Poland. Also, the Katowice agglomeration, the Tri-city Gdańsk-Gdynia- Sopot and Poznań have become more and more important busi ness service centers. In each of them more than 20 centers are located. The recent ABSL report also shows that certain regions have developed growing specialization. Financial and accounting services are predominant in Warsaw, Łódź and Poznań, IT services in the Tri-city and Kraków, while the customer service related processes –in Katowice agglomeration. As refers Decision Support and Knowledge Process Outsourcing, it is impossible to identify any location that would clearly specialize in those types of services. It must be emphasized, however, that their share in the

overall service structure is much higher in Kraków, Tri-City and Wrocław than in the rest of the country. Today more than 70 thousand people are employed in the modern business service sector, while by the end of this year this n umber may reach even 75.5 thousand. Foreign investors choose the locations of their service centers applying the criteria of, among others, availability of well educated employees who speak foreign languages. This means that the companies focus on those agglo merations which have strong university background. The predominant majority of the employees in the modern business service centers in Poland are university-level graduates (90%) which corresponds to a 9% increase compared to the year 2009. Service centers tend to employ, in the first place, university graduates who just finished school or have 2-3 years of experience. The average age of the employees is 29 years and shows the climbing tendency. Also, the demand for experts speaking rare foreign languages has been growing. According to ABSL analyses, services in the business centers are already rendered in more than 30 languages, including Dutch, French, Spanish, Swedish or Danish. Further dynamic development? Poland has an opportunity to become one of the major locations of offshore projects in Europe, especially with regard to highly advanced KPO services. However, as the authors of the Report emphasize, further dynamic development of the modern business service sector may be hampered by such factors as: low awareness of the needs and the nature of the sector by municipal officials in certain cities, limited scope of cooperation of the universities with the companies, growing labor costs, no flexibility in terms of the labor law and growing problems with finding sufficiently skilled employees speaking rare foreign languages. Major threats to the development of this sector in Poland include also the growing competition of other countries, such as Bulgaria, Romania, Czech Republic, Slovakia and Hungary that provide s ervices to E uropean clients. In order to maintain our existing strong position in the region, we need to adhere to a consistent policy that would be investor-friendly, take steps aiming at an even closer collaboration between business and universities, and an improved preparation of staff to meet the foreign investors’ needs.

Content provided by ABSL

November / December 2011

Outsourcing & More | Articles

Association of Business Service Leaders in Poland The Association of Business Service Leaders in Poland (ABSL) is a leading industry-related organization representing the s ector of modern business services in Poland. ABSL comprises the Shares Service Centers (SSC), Business Process Outsourcing (BPO) ones, the Information Technology Outsourcing (ITO) ones, the Research & Development (R&D) ones, as well as the compa nies supporting the development of the sector. The members of ABSL include more than 40 international and Polish investors such as: arvato Services, Capgemini, Carlsberg, Ernst & Young, Geoban, Google, Hewlett-Packard, IBM, Infosys, MAN, McKinsey & Company, Procter & Gamble, Shell, Sony, Thomson Reuters, UBS, Xerox. The Association of Business Service Leaders in Poland was founded on 21 May 2009 at the initiative of the largest c ompanies of that industry. The mission of the Association is to strengthen the position of the Polish sector of modern business service in Poland and to increase Poland’s attractiveness as a leading European location for outsourcing and offshoring projects. ABSL is an exchange platform for expertise, experience and accepted industry practices. Our organization has been striving for the provisions of law to be modified, has made recommendations with respect to the education system developments, has supported all solutions meant to enhance the entrepreneurship and modern

Jacek Levernes Vice-President – HP Global Business Services – Europe, Middle East & Africa (EMEA), Member of Executive Management Board HP Europe, President of the Management Board of ABSL A graduate in Business from the NHH in Bergen, Norway, he studied at Indiana University in the USA, National University of Singapore in Singapore, as well as INSEAD in France. He has functional expertise from within Polish and Global SSC/BPO sector, foreign investments, finance, procurement, strategy, acquisition integration, and business/market development.

November / December 2011

business practice. To this end, we work with politicians, local municipalities officials, businessmen and organizations supporting entrepreneurship. In November 2009 a Declaration of Coope ration was signed between ABSL, the Minister of the Economy - Mr. Waldemar Pawlak and the Polish Agency for Information and Foreign Investments concerning the structuring of favorable economic and legal environment for new investments and the deve lopment of the modern business service sector in Poland. Mr. Jacek Levernes, Vice President of Global Business Services HP Europe Middle East and Africa (EMEA) is the President of ABSL. The role of ABSL The Association is the source of expertise about the industry. Within ABSL Task Forces work to identify and solve current problems in such areas as State aid to investors, labor market or human resources. In addition, the Association is in possession of a complete list and map of the companies in the modern business service sector in Poland, the study on the available EU funds and State subsidies supporting investments, the list of events in the industry in Europe and information about office space in Poland. We also monitor the intended investments and the changes of law in the Polish market. ABSL is also the author of the periodic reports on the status and growth prospects of the modern business service sector in Poland. Such analyses include such data as the number and types of business service centers, number of staff, profile and geo graphic area of services rendered, available office infrastructure or employee’s profile. On top of that, the most recent ABSL report (2011) includes the analysis of Poland’s position in Central and Eastern Europe. ABSL also runs regular projects aiming at the exchange of expertise and experience with the representatives of the industry, local and State authorities, as well as the organizations supporting the investment incentives in Poland. Selected projects ABSL organizes, provides patronage and professional support to the prominent business events in the industry in Poland. Examples of those may be given including the ABSL Conference „Poland: great potential or lost opportunities” (16.09.2010) , 2nd ABSL Conference and 6th Outsourcing Forum Roadshow (17.06.2011) and McKinsey & Company EMEA Outsourcing & Offshoring Conference (15.04.2011). Since 2010 ABSL has been presiding over the „Round Table” discussions in Polish cities. Those discussions involve meetings of the modern business service sector companies with local autho rities, universities, labor authorities and education supervisors. The participants discuss the most important needs of the service

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centers and recommend specific solutions that should be applied in order to make the cities and regions more attractive to foreign investors and to create new jobs. Such meetings were held, among others, in Gdańsk, Szczecin, Łódź, Poznań and Katowice. ABSL also hosts the meetings with the government, ministries, associations and confederations. The Association organizes workshops for its member companies dealing with the legal, tax and human resources - related issues.

ABSL members Founding Members

PA R T O F T H E S A N TA N D E R G R O U P

Supporting Members Baker & McKenzie, Ernst & Young, Jones Lang LaSalle, McKinsey & Company.

Associate members Arcelor Mittal, Avon, Ceri, CPL Jobs, Duni, First Data, Fujitsu, Genpact, Google, Grant Thornton Frąckowiak, Grupa Żywiec, Hays, Holicon, Itella, Lorenz-Snack World Services, Luxoft, Randsadt, Sony, SouthWestern, Start People, Target BPO, Tieto, TRW, Wipro, Xerox.

Content provided by ABSL

November / December 2011

Outsourcing & More | Aktualności

IT Outsourcing Intelligence Report 2011: Western and Northern Europe Between April and October 2010 IT Sourcing Europe, a UK- based market intelligence company specialized in the European IT Outsourcing (ITO), had surveyed 8 EU countries (United Kingdom, Germany, Austria, Netherlands, Switzerland, Sweden, Denmark and Norway) in order to identify the most distinguishing similarities and differences in demands, behaviors, trends and challenges among the two types of companies – those that outsource their IT / software development to a 3d party nearshore, offshore or onshore and those that develop corporate software solutions in-house. The European ITO research 2010 aimed to: Explore factors that drive companies to outsource their soft ware development function, challenges associated with off shore/nearshore outsourcing and problem solving techniques; Find out which business model works best with the outsourced software development; Explore the major trends, challenges and problem solving practices related to the in-house software/web development; Explore key factors that keep companies away from o utsourcing their software development to the 3d party; Find out in what circumstances today’s non-outsourcing companies will consider outsourcing their software development in the future, how they will select their ITO service providers etc.

November / December 2011

This study is based solely on the results of the two online surveys: 1. Survey of companies with any type of IT/software development outsourcing experience, and 2. Survey of companies with no ITO urcing experience In order to reach as many companies as possible, IT Sourcing Europe used its own database of business contacts in respective countries and sent out a survey invitation letter to each company’s decision makers (C-level executives, IT managers, directors, heads of outsourcing / software development etc). Additionally, inbound marketing initiatives were launched in order to attract more companies to participate in the surveys. In the frames of this initiative the following steps were taken: online press release distribution and survey announcement and promotion in social media such as LinkedIn, XING, Facebook, Twitter, Blogged.Com etc and such B2B and B2C web portals as Europages.Com. Overall, 3,334 Western European and Nordic companies provided their input to IT Sourcing Europe’s research. The ratio of out sourcing to non-outsourcing companies surveyed was: 46.7% to 53.3%. The study results show obvious similarities and differences in the ways how outsourcing companies from different countries behave in terms of software development outsourcing management, maintenance and improvement, how they respond to their most critical challenges and what best practices they use to get as much value from their outsourcing transactions as possible. These results help better understand the level of ITO maturity and grasp of innovation in every European country surveyed and predict to the future trends and challenges that will most likely influence the further evolution of the ITO market in the European Union. Regarding some of the key findings, in 2010 small companies appeared to be the most active buyers of the IT/software development outsourcing services in Germany, Switzerland, Austria, Netherlands, Sweden, Denmark and Norway. United Kingdom was the only country surveyed in which mid-sized companies remained the most active ITO adopters.

Outsourcing & More | Aktualności

Key outsourcing destinations in 2010 100

10%

6% 13%

8% 80

20%

17%

1% 7%

17%

10%

11%

5% 19%

11%

12% 7%

11%

1% 11%

20%

19%

18%

13%

41% 60

23%

37%

32% 5%

23%

34%

27%

35% 29% 23%

27%

25%

22%

19%

16%

According to the survey results, most of Western European and Nordic ITO service buyers (cumulative 40.9%) still engage with their partners via “traditional” outsourcing models such as dedicated development centers (DDC) or captive centers etc, and only cumulative 21.5% of the companies are fully/partially involved in the process of HR hiring for their outsourced projects. Other findings are presented in the comprehensive “Western and Northern European IT Outsourcing Intelligence Report 2010” available for free download from http://www.slideshare.net/ itsourcingeurope/we-ito-intelligence-report-2010

32% 40

Regarding cost savings, the majority of the UK, Swedish and Danish companies save 40%-59%, while the majority of German, Swiss, Austrian, Dutch and Norwegian outsourcers save 10%24% of operating costs from the outsourced IT/development.

The Second Annual “Western and Northern European IT Outsourcing Intelligence Report 2011” is being compiled now and will be available to the broader audience in December 2011. Most outsourced areas of expertise

11%

16%

8% 19%

26% 25%

29%

29% 25%

35%

21%

43%

42%

35%

34%

32% 26%

37%

k N

ar nm De

de n

la n

Se w

Ki U ng ni do ted m G er m an y Sw itz er la nd

Regarding the main drivers of corporate decisions to outsource IT, reduction of operating costs remains the most powerful one in all 8 countries surveyed. Among the other most frequently cited factors are: acceleration of time to market (UK, Germany, Netherlands, Sweden and Denmark), difficulty finding sufficient IT resources and specific skills within own country (all surveyed c ountries except the UK), pressure from investor(s) and/or e xecutive management to cut down IT/SD budgets (Switzerland and Austria), business development strategy improvement by focusing on company’s core competences (Norway) and freeing in-house resources for other critical tasks (the UK). Thus, cost efficiency and time to market acceleration are the top 2 pressures that pump up corporate decisions to outsource IT in the UK, Germany and all Nordic countries surveyed. In Switzerland and Austria the top 2 drivers are necessity to leverage expenses and get access to vast pool of qualified yet lower-cost IT resources.

30%

15%

10% 20%

34% 19%

As the study shows, most of the German, Swiss, Austrian, Dutch, Swedish, Danish and Norwegian companies outsource their IT functions nearshore, while the majority of the UK companies go offshore.

16%

10%

11%

14%

21%

offshore

nearshore + offshore

14%

17%

ria

offshore + wothin own country

10%

nearshore

et h

nearshore + wothin own country

wothin own country

13%

7% 11%

offshore + nearshore + wothin own country

k ar nm De

s rla he et

ria st

100

Ki U ng ni do ted m G er m an y Sw itz er la nd

Web 2.0

Embedded dev

Enterprise 2.0

Saas/Cloud

Mobile

Author: Viktor Bogdanov / IT Sourcing Europe Ltd

November / December 2011

Outsourcing & More | Important dates

Important dates 27.10.2011

Office Buildings in Poland

17.11.2011

nowyadres.pl

Contact

Marriott Hotel 56 Aleje Jerozolimskie Street 00-697 Warsaw (Poland)

Organizer

Place

Over 30 speakers will take part in the conference, representing a full spectrum of views and opinions, as well as 200 participants active on the real estate market. Program includes: are Polish office buildings once more appealing to investment funds, the newest trends in office building architecture and how long will the BPO sector’s winning streak last? Katarzyna Trukawka Phone +48 795 550 440 email: ktrukawka@nowyadres.pl

Practical aspects of the amendment of the Bank Law regarding outsourcing. Outsourcing in IT and bank operations.

Rialto Hotel 73 Wilcza Street Warsaw (Poland)

26.11.2011

Centrum Szkoleniowe Sp. z o.o.

Contact

Organizer

Place

The main goal of the conference is to analyse and describe the Legal Acts concerning Banking Law in relation to outsourcing. The newest changes will be discussed by representatives of banking industry as well as outsourcing services providers. Emilia Nurzyńska Mobile.: 501 476 484 Phone.: (22) 100 58 91 email: emilia.nurzynska@frr.pl

KARIERA IT GigaCon – The most reasonable investment in human capital Poznan

All are welcome to attend the Kariera IT Career Trade Fair on the 26th of November 2011 (Saturday) in Poznan. Admittance is free.

See information at www.gigacon.org

GigaCon Aleksandra Górecka Kariera IT Project coordinator aleksandra.gorecka@software.com.pl phone: 22 427 36 44 mobile: 608 399 266

Contact

Organizer

Place

Kariera IT is an event during which various companies present their current job offers directed exclusively to experienced IT specialists. If you are an experienced IT specialist feel free to attend. Only experienced specialists’ participation applications will be accepted during the registration process. Karolina Goraj Kariera IT Project assistant coordinator k.goraj@software.com.pl phone: 22 427 36 44

To publish information about an event contact us at: reklama@outsourcingandmore.pl

November / December 2011

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Polish Outsourcing Forum

This year the honorary guest of the 6th Outsourcing Forum and 2nd ABSL Conference was Minister Michał Boni, Head of Advisers to the Prime Minister who’s presentation touched on developments in the innovative business service sector in Poland by the year 2030. Our conferences were also attended by prominent guests such as, the former Minister of Finance and former Minister of Foreign Affairs - Andrzej Olechowski and Danuta Hübner, European Parliament Member.

Since 2005 Roadshow Polska has successfully organized the Polish Outsourcing Forum on an annual basis, which alongside the Polish Investforum has become a flagship project of the company.

Dr Andrzej Olechowski (Former Minister of Finance and former Foreign Affairs)

Among panelists: Tadeusz Truskolaski (President, City of Białystok), Marek Cieślak (Vice-President, City of Łódź), Arkadiusz Wiśniewski (Vice-President, City of Opole), Dariusz Ostrowski (President, Wrocław Agglomeration Development Agency)

The President of Roadshow Polska, Eva Aboo has seen the interest in this sector growing year by year and believes Poland will still benefit from new investments and newly created k nowledge based jobs.

Polish Outsourcing Forum is the biggest outsourcing event in Poland. The Fora provide an opportunity to meet and listen to the top specialists and greatest authorities in the outsourcing industry They gather together representatives of the public and private sector including service providers, investors, representatives of local authorities and government.

Handing out of the Forbes’ Award by Kazimierz Krupa (The Editor-in-chief of Forbes)

The fora were co-organized by e.g. Association of Business Service Leaders (ABSL), Polish Information and Foreign Investment Agency, Polish Chamber of Commerce and Businessweek. from the left: Sławomir Majman (President, Polish Information and Foreign Investment Agency), Rafał Baniak (Undersecretary of State, Ministry of Economy), Wojciech Szeląg (Head of the Economic Editors Office, Polsat News)

www.roadshowpolska.pl Content provided by Roadshow Polska

November / December 2011

Outsourcing & More | Office spaces

Business Garden Warsaw Business Garden Warsaw is a project under construction at the junction of Żwirki i Wigury Street and 1-go Sierpnia Street in Warsaw. Its first two buildings constitute phase one of the Business Garden Warsaw complex comprising seven buildings to deliver 90,000 sq.m of leasable space. The first building will house a business hotel, a restaurant, a cafe, a conference centre and offices while the other will offer office space, as well as a fitness club and service space on the ground floor. Both buildings are being developed using state-of-the-art design and technical solutions which meet the requirements of ecology and environmentally sustainable construction. This will allow the project to be LEED certified. Business Garden Warsaw is the first of the three “green” business parks under the Business Garden brand. The other two will be located in Poznań and Wrocław. The first buildings in Poznań are scheduled to be delivered in 2013 while Wrocław will see its new Business Garden buildings come on stream in 2014.

Business Garden Warszawa Corner of Żwirki i Wigury str. and 1 Sierpnia str. www.cwoffice.pl

Cushman & Wakefield Plac Piłsudskiego 1 00-078 Warszawa Tel: + 48 22 820 20 20

Green Horizon To be the first, to be the best, to reach beyond the horizon – these are the goals you set for yourself and your company. In order to accomplish that you need people and they need an environment in which they can achieve their full potential. And that is why we have constructed Green Horizon – a perfect place for your business in the very centre of Łodz. Our office space is environment friendly, energy-efficient, modern and will enable your employees to spread their wings and your business to prosper. Green Horizon – just as all other projects of the Skanska Group – will obtain the prestigious LEED and GreenBuilding certificates, awarded only to the greenest buildings. Location of Green Horizon is one of its main assets. The building is situated next to the Solidarnosci Roundabout – one of the City’s main communication hubs – and thus offers excellent connection with the rest of Łodz. Your employees and clients will easily reach your office by car or with one of 8 bus Lines and 2 tram lines. This location is also attractive for its proximity to the city’s exit road leading to the motor way interchange and allows quick access to the railway station, University of Lodz, airport and the shopping center- -Manufaktura . Green Horizon is offering approx. 31,300 m2 leasable area, 7 office floors, two-level underground car park for 394 cars, 17 fast lifts, parking space for bicycles, with a changing rooms and shower for cyclists.

November / December 2011

GREEN HORIZON ul. Pomorska 106, Łódź

Skanska Property Poland Sp. z o.o. Al.Jana Pawła II 19 00-854 Warszawa www.skanska.pl

Outsourcing & More | Office spaces

Offices

Arkońska Business Park

Olivia Gate - Olivia Business Centre

Garnizon - Twin Wave

Torus Sp. z o.o. sp. k.

TPS Sp. z o.o.

Grupa Inwestycyjna Hossa SA

zdjęcie

Space: 16 620 m2 Lacalization: Gdańsk, ul. Arkońska 6 Contact: www.arkonska.pl

Name

Investor

Space: Lacalization: Contact:

Name

Investor

Space: 18 000 m2 Lacalization: Gdańsk Oliwa, Al. Grunwaldzka 472 Contact: www.oliviacentre.pl

Name

Investor

Space: Lacalization: Contact:

Name

Investor

Space: 11 800 m2 Lacalization: Gdańsk, Al. Grunwaldzka Contact: www.hossa.gda.pl

Name

Investor

Space: Lacalization: Contact:

Name

Investor

To publish real estate information contact us at: Space: Lacalization: Contact:

Name

Investor

Space: Lacalization: Contact:

reklama@outsourcingandmore.pl Space: Lacalization: Contact:

Name

Investor

Space: Lacalization: Contact:

Name

Investor

Space: Lacalization: Contact:

November / December 2011

Poland vs outsourcing | Report

Szczecin – Poland’s developing office market

Szczecin is the eighth largest office market in Poland. Its total office space stock is around 100,000 m2 and comprises largely older class B buildings as well as built-to-suit schemes con structed mainly for banks, accounting for around 30% of the city’s total stock. As tenants prefer central locations and there is a strong supply of development sites, most office buildings are located in the city centre. Such location of modern office buildings is typical of markets at an early stage of development. Szczecin is the seventh most populated Polish city with 407,000 inhabitants. Its office space provision per capita stands at 0,24 m2, which means that Szczecin is the least developed office market of all the major regional markets in Poland. In Poland’s most mature office market Warsaw this ratio amounts to 2.00 m2 per capita.

0,8

15%

11,70% 9%

0,62

0,41

0,29

0,27

0,3

0,25

0,2 0,1 Wrocław Trójmiasto Katowice

November / December 2011

Kraków

Wrocław Trójmiasto Katowice

Poznań

Łódź

Szczecin

0,44

0,4

Kraków

15,20%

10,40%

0,5

19,70%

5 0,66

0,6

0,0

Vacancy rates in regional cities

Modern office space provision per capita in H1 2011

0,7

There is currently around 49,700 m2 of office space under construc tion in the following schemes: SwedeCenter’s Brama Portowa I and II, Real Kapital’s Piastów Office Center, SGI Baltis’ Lastadia Office and Koncepta’s Baltic Business Park. When all of these developments are completed on schedule in 2012, Szczecin’s total modern office space stock will increase by nearly 50%. Even if the completion of some is postponed until 2013, Szczecin will still report the largest dynamics of office market growth in Poland.

Poznań

Łódź

Szczecin

In the first half of 2011, there was around 9% of vacant office space in Szczecin, which is ranked second among the Polish regional cities in terms of vacant space. In the years 2012-2013 the vacancy rate is likely to rise by as much as threefold, largely due to the completion of the developments currently underway. Although they will be commercialized successively, it will take at least 12-18 months for the market to absorb this increase in office space stock of nearly 50%.

Poland vs outsourcing | Report

This results from the planning strategies of local companies which are not ready to undertake long-term obligations such as three- or five-year leases well in advance. On the other hand, during the economic crisis many tenants lost trust in developers’ plans which in many cases fell through.

Modern office space stock (m2) 500 000

500 000

395 000

400 000

311 600

300 000

267 500

250 120

233 550

200 000 100 000

100 000 0

Kraków

Wrocław Trójmiasto Katowice

Poznań

Łódź

Szczecin

Prime asking rents in Szczecin stand at EUR 14-16/m2/month and largely depend on the building’s standard. Effective rents average EUR 12-14/m2/month, depending on the volume of office space leased and the situation of a building. Asking rents in older generation buildings fall within the range of EUR 12-14/m2/month while effective rents stand at EUR 10-11 m2/month. Unlike Warsaw, Kraków or Wrocław, Szczecin’s market is not diver sified depending on the location. The building’s standard and commercialisation, i.e. the volume of vacant space, are more important than its location, largely due to the fact that a vast majority of buildings are located in the city centre.

Szczecin’s office market is young and, therefore, strongly dependent on external demand. The city’s hopes for development are pinned on outsourcing, BPO and SSC companies. Szczecin is regularly short-listed as a location for new developments in this sector. Its chief assets include the proximity to the German border, language skills of its residents and the relatively weak competition on the labour market compared to other key Polish cities. The demand for office space in Szczecin is likely to rise in the next two years by as much as 200-250%. For such demand to be satisfied, there needs to be office space ready be taken up right away as companies looking for new offices tend to need such space within six or nine months. Several large schemes currently under construction in Szczecin will certainly strengthen this city’s position in the analyses of companies coming onto the Polish market. Author Krzysztof Misiak Senior Negotiator, Office Department, Cushman & Wakefield

Typical leases in Szczecin are made for 200-300 m2 while larger deals of over 500 m2 are made chiefly by newcomers to the Szczecin market opening shared services centres or by out sourcing c ompanies. A vast majority of leases are made for existing buildings or schemes at a very advanced development phase.

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The West Pomerania Region: INVEST IN THE NORTH-WEST Did you know that the West Pomerania Province is a region with above-average investment appeal? The last ranking prepared by the Institute for Market Economics confirms this. Many factors coalesced to add up to the West Pomerania Province’s success. It is located in the very heart of Europe and has great accessibility by road. It has a well-educated staff and four hundred hectares of free space in special economic zones. Sławomir Majman, President of the Polish Information and Foreign Investment Agency noticed that „the West Pomerania Province is appreciated by investors mainly because it has direct access to the see and a well-prepared port”. Investors from all over the world found a spot for themselves in the region. Every night trucks carrying blades for wind turbines manufactured by the British tycoon LM Wind Power Blades leave the Goleniów Industrial Park. In Goleniów itself the Swedwood Company located its headquarters, a Swedish syndicate from the wood and furniture branch linked with Ikea. Lumber mills and production halls belonging to the company are located throughout the region and the country. The Danish manufacturer of „probably the best lager in the world„ invested in the region’s capital, and two of six BPO sector projects to be finalized in Poland in 2009 operate in Szczecin. The presence of Italian UniCredit and Danish Coloplast prove that the city is an appealing place for investors. The second large town of the region, Koszalin, is home for Royal Greenland Seafood, the largest European group on the seafood market. The Portuguese Jeronimo Martins Company opened its logistics center in the city. The High Technologies Industrial Park in Stardard Szczeciński is home for the Japanese company Bridgestone, which manufactures tires for trucks and buses. Cargotec, a world leader in the production of lifting equipment, found a home right “next door”. According to Harry Ojala, the Vice President of the Finnish Cargotec Corporation, their investment spot has all the features necessary to run a business: it is close to European clients, the sea port, highways, has good logistics solutions and plans for road investments. The abovementioned projects are just a few examples of successful foreign investments in the West Pomerania region, which is home to over four thousand companies with foreign capital.

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Among these most are from Germany, Scandinavia and other European countries, but our region’s offer is also appreciated by companies from the United States, China, India, Japan and Korea. As noticed by Chairman Sławomir Majman, “the region has good wind conditions for wind turbine farms, currently more and more manufacturers are considering the construction of their production plants in the West Pomerania Province for the needs of existing wind farms”. At the same time Roland Sunden from LM Wind Power Blades emphasizes that “The West Pomerania Province has excellent logistics conditions, both via road and sea, which makes it possible to efficiently provide services for customers on the developing European markets”. Tourism is of significant importance to the region’s economy, due to the natural appeal of the region. A stay in the West Pomerania Province allows tourists to rest and improve their health and condition. Nature has created the perfect conditions which facili tate recovery and regeneration. Natural health benefits – the climate, deposits rich in peloid and salt – are utilized by the region’s many health resorts. Investors interested in the West Pomerania Province’s benefits and potential, have access to professional and cost free assis tance during every phase of the investment process, provided by the Marshall’s Office’s Investor and Exporter Assistance Center, which is the regional partner of the Polish Information and Foreign Investment Agency. The Investor and Exporter Assistance Centers are called one stop shops, as they offer a wide range of services, including information about legal regulations concerning locating investments in the West Pomerania Province, available support programs, investment incentives, as well as concrete information concerning investment plots in our investment database. OPINIONS “The West Pomerania Province is valued by investors for many important reasons. Most of all it has direct access to the sea and a well-equipped port. This is a good asset for investors planning to enter the Scandinavian market. (…) The region’s assets of c ourse

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also include close proximity to the Western E uropean market, valued by all investors, not only those from abroad. (…) The r egion has good wind conditions for wind turbine parks. The P omerania region has been observing the development of this branch for quite some time, and the creation of wind farms attracts more invest ments linked with this sector. Currently more and more investors are considering building production facilities in the West Pomerania Province for the needs of the existing wind farms. (…) The Investment Service Center puts a lot of effort into post-investment assistance, which are services provided to companies who have already invested in the region”. Sławomir Majman, President of the Polish Information and Foreign Investment Agency (March of 2010) “The situation of the West Pomerania Province has considerably improved within the last year. Self-government authorities have been doing everything to create good conditions for investors. This is why the province has moved up two slots in the ranking, and is currently sixth in the country”. Bohdan Wyżnikiewicz, Vice President of the Institute for Market Economics (December of 2009) “When we decided to look for a location for our new project, we analyzed several possibilities. We landed in a hundred airports and it became obvious that Stargard Szczeciński will be the best choice. It has all the features necessary to run a business: it is close to European clients, the sea port, highways, has good logistics solutions and plans for road investments. I am also impressed by the region’s academic facilities, and excited for the opportunity to cooperate with these institutions. (…) First of all cooperation with local authorities is excellent. Second of all there are 41 hectare plots available. Third of all it has good logistics and is located close to our clients”. Harri Ojala, Vice President of the Cargotec Corporation (during announcement of the investment decision on the 29th of April 2009)

“It is no coincidence that we are locating our first Polish factory here, in Goleniów. It is the result of careful research and analysis, during which we concluded to invest in this region. First of all, our plant has an excellent location and can provide competi tive services for the market which currently has and will have in the future the greatest demand for wind energy development: Germany, Western Europe and near-shore farms. In addition, the logistic conditions are excellent: both via road and sea, which makes it possible to efficiently provide services for customers on the developing European markets. Second of all, authorities work effectively and have met our needs and expectations. The third deciding factor was the possibility of expanding our c ompany in the Goleniów Industrial Park. An important argument was the presence of qualified and success-oriented employees. In summation: Goleniów was the natural choice and we would like to take this opportunity to express our gratitude to everyone who participated in this project.” Roland Sunden, President of LM Glasfiber (speech given during the factory opening ceremony in the Goleniowski Industrial Park on the 3rd of March 2009) “Finding an adequate region and coming to an agreement with all parties involved is never an easy process. I would like to thank all municipal, regional and government authorities who put in so much effort so that we could come to an agreement and successfully finish our project. Without the great assistance of our hosts in this country we would not be able to realize our long-term invest ment. I expect further support from everyone: together we can make Bridgestone Stargard a big success. Takashi Urano, President of Bridgestone Europe NV/S (speech given during the agreement signing ceremony on the 31st of July 2006)

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EVENTS Teleyard has created a thousand new career opportunities in Szczecin! The letter of intent in this matter was signed on board a sight seeing ship sailing down the Odra River. The Belgium investor from the steel industry also declared to increase capital expenditures to 80 million PLN. The Teleskop Company has been operating in Poland for over ten years. It employs 840 people in three production plants, located in Kostrzyn by the Odra River. The investor intends to create a modern European-class production facility in Szczecin, similar to those in Kostrzyn. Teleyard, the name of the company that will be established for the needs of the Szczecin project, will manufacture large, oversized steel elements and components, to be sold to the company’s customers. These include Liebherr, Cargotec, Terex and DemeDreadging, for who Teleskop manufactures crane components, container cranes and devices for dredges. Access to the sea coast is a key factor for this project. The company has been active on the grounds of the Nowa Shipyard in Szczecin since September of 2010, where it hires approx. 70 wielders. It has invested approx. 1 million PLN to adapt shipyard halls.

for access road construction and development of the 38 hectare investment site located on Stołczyńskiej Street. The Szczecin Municipal Commune (Piotr Krzystek) – will ensure that the investment site is developed and has road access. The City of Szczecin’s Fund for the Support of Economic Development (Marcin Krukowski) – will prepare the investment site for project realization. Kostrzyńsko-Słubicka Special Economic Zone (Artur Malec and Roman Dziduch) – will acquire the investment site, grant it the status of a special economic zone, and make it available to the investor. A Danish investor chooses Myślibórz Vest-Fiber ApS, a Danish fiberglass manufacturer, after eight months of searching for an optimal location in the West P omerania Province, has decided to rent a production hall in Myślibórz. Ultimately the company is planning to build a new facility and hire one hundred people. The company was established in the year 2000 in a small town called Tarm on the Jutland Peninsula and supplies fiberglass products to wind turbine manufacturers. The West Pomerania Investor and Exporter Assistance Center has been handling the

Christopher Maas, agent representing Teleskop, told reporters both the history of the company and its plans for the future. According to the investor’s “road map”, the company will hire 100 people next year. Four years later the company is planning to hire 300 employees, to ultimately – in 2020 – have one thousand e mployees. This is the largest investment project to be carried out in Szczecin in recent years, and the investor is a company that has already proven to be a reliable employer in Poland. Marshall Geblewicz mentioned that invest ment plans are tied with the cooperation with Cargotec in Stargard Szczeciński. “Our expectations linked with the Cargotec project are materializing; this project is not only is valuable in itself, but is also attracting subcontractors to our region, and – as we can see – not only small companies”. The letter of intent signed by the investor, represented by the President of the Board Reiner Maas and Christopher Maas, was also signed by the representatives of institutions whose tasks will include the preparation of the investment site for project realization: The West Pomerania Province (Olgierd Geblewicz) – will assess the City of Szczecin’s possibilities of granting financial support

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Vest-Fiber invest ment project since November of 2010. The first meeting with the investor took place during an investment seminar in B jerringbro, organized by the Department of Trade and Invest ment Promotion of the Polish Embassy in Copen hagen. The investor asked the Investor and Exporter Assistance Center to find a suitable hall for rent, close to Goleniów. That same month the investor visited our region for the first time. Although

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he received a few good offers, in December negotiations were terminated. Negotiations commenced once more in June of 2011, and the Investor and Exporter Assistance Center suggested the hall in Myślibórz. Thanks to the S3 expressway investment offers in the Przycki and Myślibórz districts are in high demand, and supplement the offers of industrial parks located in Goleniów and Stargard Szczeciński. The investor signed a rent lease with the hall’s owner in June, and in August the hall will be equipped with machinery and employees will be hired (15 people at first). „The investment’s location is our biggest source of satisfaction. It is not easy to locate investors outside of the Szczecin Metro politan Area. I believe that the Vest-Fiber investment is the beginning of a good streak for municipalities located by the S3 expressway” – was Marshall Olgierd Geblewicz’s comment to the decision made by the Danish investor. „I would like to espe cially thank Arkadiusz Mazep, the district’s staroste, who created a district investor service group. Training for administrators – conducted by the Investor and Exporter Assistance Center in June – is bringing measurable results.” Currently the Investor and Exporter Assistance Center is handling a few dozen investment projects from Denmark. Soon we will be able to announce the results of negotiations conducted with another company from Denmark, who also decided to invest in the West Pomerania Province. The Marshall “spoils” the walk for investors – for the third time “Golf is a good walk spoiled” – Mark Twain liked to say. Investors from Belgium, Denmark, Finland, Spain, Japan, Poland, Russia, the USA and Sweden participated in the 3rd Investor’s Golf Tournament, organized by the Investor and Exporter Assistance Center and the Scandinavian-Polish Chamber of Commerce. For Bridgestone’s Koh Asakawa it was the last tournament in Binowo, for Anatoly Leyrikh – the first. The guests who arrived in Binowo were welcomed by Olgierd Geblewicz, the Marshall of the West Pomerania Province, and Kaare Nordbø, the Regional Representative of the Scandinavian-Polish Chamber of Commerce. „I see many familiar faces, but also new ones. This means that new investors have chosen to run their businesses in the West Pomerania Province”, said Marshall Geblewicz. The new investors mentioned by the Marshall are the six new companies which decided to commence operation in West Pomerania, including the Russian Intrall and Belgium Teleskop. The companies declared to hire, in total, almost two thousand employees and their expenditures will reach two hundred million PLN. We have a lot of work ahead of us to turn the projects into reality.

Golf efforts were preceded by a presentation of market perspectives, conducted by Randstad. Demographics will be the biggest challenge for employers in upcoming years. The Y generation is entering the market, which requires a different approach from employers. A lively debate was initiated by Jens-Christian Møller from BIC Electric, who polemicized with Karolina Radziszewska from Randstad about the expectations of young employees. The participants were traditionally divided into two groups – beginners and experts. The experts took part in the main tournament on the 18-hole golf course, while the less experienced g olfers practiced on the driving range and putting green in order to compete in four people groups during the Texas Scramble. The event ended with the award granting ceremony, to the sound of acoustic classic rock. Awards funded by Deloitte, Nordea Bank and the Marshall’s Office were granted to, inter alia, Koh Asakawa, the Senior Manager of Bridgestone Stargard, who will be finishing his mission in Poland within the next few weeks. The travel bag he received for second place in the tournament thus also has its sad implications. Anthony Belletete, the head of the Białogard branch of V alassis won the tournament though it was his debut. For Anatoly Leyrikh, Intrall Rus’s Chairman of the Board this was also a debut. D uring a conver sation with Marshall Olgierd Geblewicz, the Russian investor talked about his next investment steps. During the fall a consultation company will assess and choose a location in Szczecin or within a 40 kilometer radius from Szczecin. By 2013, 22 million euros will be spent to create a research and development facility, where passenger and delivery car prototypes will be designed. The facility will hire 50 engineers, and ultimately 500- 600 workers for the production process. The Investor and Exporter Assis tance Center has been handling the Intrall Rus project since August of 2010. In February of 2011 Jan Krawczuk, the former Marshall, signed a letter of intent with the investor and the President of the Polish Information and Foreign Investment Agency. Danish Flags on the Pomeranian Duke’s Castle Due to the initiative of the Ambassador of the Kingdom of Denmark in Poland, Thomas Østrup Møller, on the 12th of May Danish investors operating in the region met at the Pomeranian Duke’s Castle. The “round table” model facilitated the exchange of experiences, information and problem identification. Guests were welcomed by Marshall Olgierd Geblewicz. „This is our second meeting with Mister Ambassador since December of last year, when I became the Marshall. This means that you are a frequent quest in West Pomerania, Ambassador, and I am very glad that this is so. Please feel at home in our region” - was the Marshall’s opening statement. „This has been a very “Danish”

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month for me and the Investor and Exporter Assistance C enter. Last week we spent two intense days in Copenhagen trying to con vince tourists and investors to visit the West Pomerania Province. During a seminar in Denmark we had a discussion not only about our region’s positive aspects, but also regarding the various problems and obstacles experienced by a Danish investor in Świnioujście. It was a valuable lesson. Today I can continue the conversation regarding the problems investors might encounter. I cannot promise that we have solved all problems, but I can assure you that will we do all we can” - the Marshall explained. „Investing is like marriage. First comes the honeymoon, but afterwards its back to everyday life” - began Ambassador T homas Østrup Møller, who was the moderator of the discussion. „Every one at this table knows that the West Pomerania region is an excellent place to invest in, at least for one reason – the excellent support for investors.”

Representatives of Danish companies operating in West Pome rania partici pated in the meeting, including: A grAlex ( Redło), Alto (Koszalin), BIC Electric (Szczecin, Goleniów), BPI (Lipiany), Coloplast ( Szczecin), HG Poland ( Goleniów), Netto (Motaniec), TransCargo (Szczecin) and Vestas (Szczecin), as well as an investor who is planning to provide employment opportunities for 200 workers in the region. We will reveal details soon! The Investor and Exporter Assistance Center’s representatives wrote a protocol of the meeting, including a list of all the problems voiced by investors. Of these, the most important are: lack of air connection with Copenhagen and Jutland, difficult communi cation with ENEA Operator, defective information and communication network at the Goleniów Industrial Park, insufficient promotion of Szczecin outside of Poland and inflexible Polish regulations. The Marshall promised to examine the possibilities of assisting investors regarding all their requirements, and that some of these

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problems were already recognized and are being solved. The discussion ended with a banquet, during which the guests continued their conversations with Vice Marshall Andrzej Jakubowski, Vice Mayor of Szczecin Aleksander Buwelski and the Honorary Consul of the Kingdom of Denmark, Andrzej Preiss, who had been given a distinction (the Order of Dannebrog) a few hours earlier by Ambassador Møller. How to do business in a region if we cannot pronounce its name? Why do Danish companies like to do business in Poland? Why do they often choose the West Pomerania region? These questions were answered by representatives of the Polish Embassy in Copenhagen, the West Pomerania Investor and Exporter Assistance Center, the Embassy of the Kingdom of Denmark in

oland, the Scandinavian-Polish Chamber of Commerce, as well P as Danish investors, successfully running their businesses in our region. The meeting with a few dozen representatives of the Danish busi ness circles was moderated by Jacek Wójcikowski, Head of the Department of Trade and Investment Promotion of the Polish Embassy. Councilor Wójcikowski is a great friend of our region, and the Investor and Exporter Assistance Center is grateful to him not only for a few investment projects, but also countless export offers, which reach West Pomeranian manufacturers and service providers via the Center. Upon opening the seminar, the Polish Ambassador in Denmark, Rafał Wiśniewski, said: „Danish investors began their activities in Poland in the 1990s. Since that time colossal changes have taken place in our country. Strong regions are one of the most important

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development factors. These are serious “players”, and as insti tutions they manage regional operational programs and divide the flow of European Union funding in order to satisfy the most important needs of their residents. Today I have the honor of welcoming the representatives of the West Pomerania Province. The Province is successful in many fields. Its most important asset is its location – close to Denmark – and our connections are becoming noticeably tighter. The largest Danish companies operate on the Polish market – their number is impressive, but it could still be larger.” The Ambassador also took the location to remind the participants that Denmark is 9th regarding investments in Poland, and 2nd in the West Pomerania region, offering in total 4000 new jobs. „Almost every large Danish company is present in Poland, but even the smaller companies are beginning to appreciate the possibility of investing their capital so close to home. For them it is of significant importance that their headquarters are not located in China, the Ukraine or even Central Poland, but 300-400 kilometers from their main headquarters” – explained the Ambassador. „For the West Pomerania Province both small and large companies are important, as they guarantee stability and enduring bonds with the region.” Jacek Wójcikowski from the Department Trade and Invest ment Promotion Department in Copenhagen explained during his presentation what assistance is offered to investors by the embassy. Those interested have access to important addresses, information concerning business locating conditions, and can establish contacts required to successfully enter the Polish market. How did Danish business owners find their way to P oland? Through the Polish Embassy, as well as the Polish Information and Foreign Investment Agency and Investor Service Centers in the Marshall’s Office. „Many investors come to regions where Investor and Exporter Assistance Centers are the main partners and guides. Some find their way directly to cities. Important “compasses” are also the Danish Embassy in Warsaw and consultation companies. The seminar’s program was arranged in such a way as to show all these routes to Poland. Today the entrepreneurs present on the Polish market will tell us their story, the P rovince’s self-government representatives will tell us the specifics of the region, while the City of Szczecin will explain what type of investments are most needed in the region” - said Jacek Wójcikowski. „Poland is not a country where workers are paid two dollars an hour, like in China. But the West Pomerania Province is close to Denmark and has a lot of well-educated residents. Poland has a dynamically developing economy. Although the past recession has impacted export and import, at present we can see a rebound to the trends from before the recession. How to do business in a region if we cannot pro nounce its name?” – laughed Jacek Wójcikowski. „That question will also be answered today.” Pawał Bartoszewski, Head of the West Pomeranian Investor and Exporter Assistance Center presented the province’s invest

ment offer. A map is all I need to prove my theory, he started, and explained the slide containing a picture of the location of the province, its communication routes with Europe and other continents. Ever since Poland joined the European Union our country has easy and unlimited access to international m arkets. Denmark is the largest, right after Germany, foreign investor in the West Pome rania Province. A circumstance which has undeniable impact on locating companies in our region are the international communication routes which intersect in this area. Szczecin is closest to Western and Northern Europe of all large Polish cities. The proximity of the international airport in Berlin facilitates fast access to every part of the world. The Investor and Exporter Assistance Center’s head also talked about the industrial parks in Goleniów and Stargard Szczeciński, home of LM Wind P ower Blades, Bridgestone and Cargotec, the Koszalin zone with a promi sing a cademic and industrial potential, as well as Karlin, a small city with great possibilities, which cannot be overlooked when planning to locate a business in the West Pomerania Province. In a ranking of the most appealing investment spots, the West Pomerania Province is sixth in Poland, and we are assessed as one of the strongest regions in the country. Companies asked to give an opinion about West Pomerania indicate its perfect location and good transportation possibilities, human resources as well as the great cooperation with local and regional authorities. An impor tant, though seldom emphasized, asset is the region’s tourist appeal. The province is one of the main tourist regions in the country. Wide sandy beaches, wonderful sailing, windsurfing and kitesurfing conditions as well as conditions for practicing other watersports, and – growing ever more popular – Nordic walking; all this makes the region a place where companies can successfully run their business and pleasantly spend their free time. And there is no better place to conduct business meetings than the golf course. Before Andreas Storsul-Nielsen, the representative of AKS Gruppen, shared his experiences regarding Poland, he was given a commemorative graphic design by Marshall Olgierd Geblewicz, illustrating the Baltic Sea Bay. „As close as it gets” – it was personally signed by the Marshall, a reference to the location of the AKS plant, almost on the shore of the Baltic Sea, in the direct vicinity of the ferry terminal in Świnoujście. The location was in fact one of the most important factors which guided the decision to locate the metal plant in West Pomerania. Ninety people are currently employed there. Another asset was the… high unemployment rate in the region. Storsul-Nielsen confirmed, during his presentation, the hypothesis made by the preceding speaker, a representative of the West Pomeranian Investor and Exporter Assistance Center; that for an investor high unemployment rates signify two things: a large number of potential workers and lower pay pressure. Additionally, low work costs do not go in hand with unqualified workers. The ever-increasing efficiency of labor in Poland counter acts the slowly growing costs of employment.

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The AKS Gruppen Company was established in the 1920s. As it developed it began specializing in high technology, industrial and medical equipment. In the year 2003 the company decided to expand to other European countries. In 2004 the company chose Poland. A year later it began building a new production hall, and began to transfer workers from Denmark to a temporarily rented facility. „I would like to emphasize the good relations with the authorities in Świnoujście. They helped us understand local conditions, including how to pay taxes and organize our operations” said Andreas Storsul-Nielsen. In 2007 the company hired 200 workers in Denmark and 55 in Poland. When the recession hit, mainly Danish workers were laid off. „In Poland work costs were not so high, so we continued our activities. The recession did not stop us from planning to construct new production halls. The qualified and hardworking (without hesitation) employees deserve acknowledgement, and lower work costs were not with out significance. The proximity to home is significant; we can visit our loved ones without much difficulty. Our associations with the people here are great; everyone is very helpful. Among the negative aspects of running a business in Poland is the bureaucracy, but this situation is slowly changing”, explained Andreas Storsul– Nielsen. „And there is the lack of a direct ferry connection with Copenhagen”, was the last of these negative aspects. Today the AKS Group hires 110 people in Denmark and 90 in Poland. This trend speaks for itself. The Mayor of Szczecin, Piotr Krzystek, commemorated yet another Danish investor. The Coloplast Group provides services for the medical industry, and has decided to locate its accounting and finance center in West Pomerania’s capital. Magda Szymanowska, as Coloplast’s representative, added her opinion to those previously voiced during the seminar. „In Szczecin we found young people, highly motivated, who knew foreign languages. Our task was to recognize their skills and how to develop them in the future. The ability to say “we can do that” is the a sset of Polish employees. Of course our company keeps changing and illustrating that it is possible to reach higher than first e xpected. Towards the end of 2009 we had 90 employees. We provide services in 11 European countries, and currently about 20 people are undergoing training and learning new skills in our branches in Spain, Italy and Great Britain. I hope that these facts prove that we have succeeded in Szczecin” – she emphasized. Dennis Holte Albertsen from the Danish Embassy in Warsaw said: „Poland of the 1980s and 1990s was a country where Danish people liked to travel, as everything was cheap. This has changed. It is still cheaper but this is not the most important thing; this is not enough. Today it is necessary to scrupulously prepare for the process of investing in Poland. Certain matters are important, such as the dress code – when you go to a government office for the first time and want to be warmly greeted, put on a suit. Listen to the advice offered by other companies; do not assume that you will make easy money in Poland without any effort. Before

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you start investing in Poland, be convinced that you want it, that you can and that it is worth your effort” – Albertsen emphasized. „I visited Poland for the first time when I was a student. I am here once more. Of course, you can complain that the roads are not the best. But Poland has taken a huge step forward. If other countries had taken so many steps forward as Poland had, today the situation there would be much better. This is why we need to appreciate Poland’s achievements. If you do decide to come to Poland, meet the people, get to know them – they want to help you.” Kaare Nordbø gave the seminary’s last presentation about the Scandinavian-Polish Chamber of Commerce. The Chamber is a professional business organization which supports Polish- Scandinavian economic development. It conglomerates 320 companies and 24 individual members and organizes multiple events to promote Scandinavia and its companies. It has branches in Warsaw, Wroclaw, Poznan, the tri-city area, Cracow and Szczecin. The Szczecin branch is the youngest, but also one of the most active (40 members). „We are in close contact with regio nal and local authorities, and we are very happy that our cooperation is going so well, and hope that we will maintain good relations” – completed Kaare Nordbø. The seminary took place on the 6th of May in the Copenhagen Hellerup Parkhotel. It ended with lunch, during which participants continued their discussions. The Investor and Exporter Assistance Center not only conveyed a lot of information concerning invest ment possibilities in the region, but conducted several serious conversations with companies looking for semi-finished product suppliers in Poland. To support local exporters, the Center will soon locate our meat and steel elements manufacturers. A few of them might commence cooperation with Danish companies. The West Pomeranian Investor and Exporter Assistance Center one of the best in Poland! The Polish Information and Foreign Investment Agency has completed the certification process of its regional partners. The Investor and Exporter Assistance Center was among the top three partners. The certification process lasts one year. The Agency conducts complex audits in the Investor Service Centers. The preparation level of Center employees throughout the country to assist foreign investors is verified. The certification process is composed of three stages: An assessment conducted by employees of the Department of Regional Development and the Department of Foreign Investors, Certification visits to Investor Service Centers, An assessment of the presentation of the investment offer in various regions, conducted in English by the Centers’ directors.

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The certificate and statuette were accepted by Przemysław Włosek, the Vice Marshall of the West Pomerania Province.

„I observe the professionalism and dedication of our Investor and Exporter Assistance Center on an everyday basis, so I am not surprised by this distinction. The entire West Pomerania staff worked together to achieve this success”, said Marshall Włosek. In the report issued by the Polish Information and Foreign Investment Agency we can read: „According to the opinion of the Polish Information and Foreign Investment Agency, the Investor and Exporter Assistance Center’s employees are very competent. The Center’s team has received very high marks – the workers are always available, the documents they send are complete and in accordance with the Polish Information and Foreign Investment Agency’s standards. Services provided to investors are of the highest quality. The Center has good contact with the Province’s Board – which has full understanding of the Center’s needs, and meetings with authorities are organized very quickly (next day). The Center cooperates well with business circles, including the Scandinavian-Polish Chamber of Commerce, the Kostrzyńsko-Słubicka Special Economic Zone and consultation companies.” The audit is valid for three years. The centers that received certifi cates can use the Polish Information and Foreign Investment Agency’s logo. „The Greater Poland and Western Pomerania Provinces are a group of regions with above-average appeal” – we can read in the newest edition of the report regarding investment appeal of Poland’s provinces and sub-regions. After our region’s last

year’s success; a jump from eight to sixth place in the ranking published by the Institute for Market Economics, we have once again strengthened our position. We are only 0.01 points behind the fifth province in the ranking – the Greater Poland Province (last year the difference was by 0.25 points). We have also increased the distance from the seventh province in the ranking – the Lodz Province – to a safe 0.32 points (in 2009 that difference was only 0.05 points). This means that next year we have a chance to advance to fifth place in the ranking. The Investor and Exporter Assistance Center is most pleased about the criteria in which we excelled. „Province’s activity regarding investors is defined as the ability to create an image of a region, popularize it and the ability of self-government authorities to create a good mood for investments”. When assessing this criterion, the following factors are taken under consideration: number of investment offers in the Polish Information and Foreign Investment Agency’s database, as well as the informational and promotional activities undertaken regarding foreign investors by facilities abroad – such as by the Department of Trade and Investment Promotion of the Polish Embassy. T wenty percent of the total points are awarded for this one criterion. The criterion regarding the employment market is also very important. The West Pomerania Province is assessed as the second most active region in the country, only a little behind the Lower S ilesian Province. While the Lower Silesian region has fallen down in the classifications since last year, the West Pomerania Province has improved its score by 0.98 points. The report’s authors list our region’s assets: a high intensity of informational activity and above-average number of investment offers in the Polish Infor mation and Foreign Investment Agency’s database. The authors also point out that the region has greatly improved within the last six years, mainly due to changes that took place last year – a significant increase in the Department of Trade and Investment Promotion’s ratings. „The category of activity regarding inves tors does not solely pertain to provincial self-government bodies. Local self-government bodies, companies as well as private entities and special institutions (e.g. the special economic zones, regional and local development agencies) are also to thank for the large number of investment offers and informational-promotional activity” – we can read in the report. The strong position of the West Pomeranian region is the joint success of the provincial self-government and the municipalities in our region, as well as our reliable partners: the Kostrzyńsko-Słubicka Special Economic Zone, the Scandinavian-Polish Chamber of Commerce and the Polish Information and Foreign Investment Agency. The abovementioned institutions have supported the Investor and Exporter Assistance center organize many promotional events, both in the country and abroad. Thanks to our activity in Europe (Skandinavia, Belgium, Ireland, France), and also in Asia (China, Japan and South Korea), we received a high evaluation from the Departments of Trade and Investment Promotion located in those countries. Content provided by Szczecin City Councuil

November / December 2011

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Slupsk Special Economic Zone The Pomeranian Regional Development Agency Joint Stock Company supports creation of start-up companies in Slupsk Technological Incubator at the Slupsk Special Economic Zone The Pomeranian Regional Development Agency Joint Stock Company (PRDA) was established in 1994. The activity of the Agency is focused on initiating, promoting and supporting initiatives connected with broadly understood regional development. Since 1997 PRDA has been an Administrator of the Slupsk S pecial Economic Zone (SSEZ). The Zone covers an area of over 400 hectares. 60% of the areas has been already developed by the investors. Main lines of business in SSEZ: wood processing, food processing, plastic processing, transport and logistic services, metal branch and building branch. There are 49 companies which have active permit on running the activity in the Zone. Investors have invested over PLN 1 billion and employ over 3000 employees (data for 2nd quarter of 2011). Except for support which Zone gives to the companies, the Agency provides an intensive investment process in order to create the Slupsk Technological Incubator (STI) at the Zone area. STI will create a positive climate for co-operation for development of the entrepreneurship and innovation. Start-up companies which will start their business activity at the STI will take advantage of preferential rental costs and will have access to business services. Incubator will be ready for use in the second half of the year 2012.

According to the projects’ targets the Incubator will offer attractive spaces for the development of the start-up companies. The STI will provide offices and production spaces, administrative s ervices, business advisory, legal advisory, intellectual property management, comprehensive training programmes, promotion services, support with access to bank loans and EU funds a vailable for development, links to higher education resources. On the basis of the STI there can be evolved additional elements, such as robotics and lab classes for children. There is an idea to create a science centre, exploratory, etc. When will the Incubator start its activity?

Who was the originator? Who is responsible for implementation and financing this investment? The organizer of this undertaking, which has been implemented in order to create the Incubator, is the Pomeranian Regional Deve lopment Agency. The Agency is both the applicant of the project and the main investor. The plots at Portowa Street which are located in the Slupsk Special Economic Zone where allocated for the STI. The investment is co-financed by the European Union within the Regional Operational Programme for Pomorskie Region for the years 2007-2013, Submeasure 1.5.1. “The development of innovative enterprise infrastructure”. What is the role of the Incubator? The incubator secures start-up companies in order to establish and running a business activity. It is a place for companies offering a product or a service as a result of implementing new technology.

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The Agency signed the contract with general contractor ALLCON Budownictwo Sp. z o.o. S.K.A. in October 2010. The contractor has 18 months for completion of the investment. The completion is planning for June 2012. What is the total value of the project? The total value of the project “Building and equipage of the Slupsk Technological Incubator” is PLN 41 million gross. The net v alue of the project is PLN 34 million. The subsidy from European Union is 75%, the amount is PLN 25,5 million. The costs contain: preparation of the documentation, supervision, management, construction and equipage. What type of spaces and equipment will Incubator offer? What will be the total usable area?

Poland vs outsourcing | Articles

and in the Slupsk Special Economic Zone. The current ones and new ones companies can complement each another. We do also see the possibilities for those who would like to co-operate with the companies active in the food processing line of business. What is the goal for the future?

The total area of the building is 7039 square meters. It will be a state-of-the-art two-level building, which will fulfill 3 main functions: Entrepreneurship Development Centre, Training and Conference Centre, Research & Development Centre. Incubator will offer: Air-conditioned office spaces with the access to high-speed internet connection Production and technology spaces 300 people auditorium Large conference room for 100 people Small conference rooms Computer work-room There is a plan at present for equipping professional work-rooms for training and working for entrepreneurs. What lines of business will Incubator be aimed at?

IT Metal and welding Food processing Industrial physics Renewable energy Automation Robotics Plastic processing

The main goal of the STI is to develop the entrepreneurship, attract new investors active in innovative lines of business, creating new work places through securing the enterprises by beneficial conditions of running a business activity and development of the co-operation between scientific environment and local business. The Incubator will affect on entrepreneurship development not only in the city but also in the Region of Central Pomerania. It can be an alternative to young people who had emigrated Slupsk. The STI and its opportunities will be a chance for a comeback and for running own business activity in a hometown. We kindly invite to co-operation! The Pomeranian Regional Development Agency The Administrator of the Slupsk Special Economic Zone Poland, 76-200 Slupsk, 2 Obroncow Wybrzeza Street Tel.: +48 841 28 92, fax +48 59 841 32 61 www.parr.slupsk.pl www.sse.slupsk.pl e-mail: office@parr.slupsk.pl

The catalogue of branches is not closed. The above mentioned are connected with the industry which is already in the Slupsk Region

November / December 2011

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It has to be Szczecin In the past, not much was being said about Szczecin. Its geographical location and educational facilities did not compensate for the lack of sufficient infrastructure, required by service centers. Today experts are calling Szczecin a “hot spot”, indicating that it is a location with great potential. Especially for projects dedicated to Northern and Western Europe. The first BPOs to open their branches in Szczecin were S tream Global Services and Arvato Bertelsmann. As contact and call centers this was fairly easy, although not without obstacles. Limited access to office space and the local authority’s limited knowledge concerning the needs and characteristics of such investors led to difficulties; ones that are always present when an activity is still new. Subsequently Tieto and BLStream made Szczecin their home – big names in the IT Industry. Each of these companies indicated, however, that the town’s existing infrastructure stands in the way of Szczecin becoming a center for services. It is popular to joke in Szczecin that the city has highways to Europe’s capital cities, but not to Warsaw. Berlin, Prague, Copenhagen are closer – geographically – to Szczecin than Warsaw. It is difficult to escape the impression that – due to the town’s location – Szczecin should have been experiencing dynamic economic growth for years; both in the field of production and services. Yet this was not the case. The decision to change the town’s investment strategy was made in 2006 – flaws were defined, objectives were set, steps were undertaken to ensure that Szczecin, located 130 kilometers from Berlin and 280 kilometers from Copenhagen, enters the game, as had Cracow, Poznan and Warsaw. “We knew about our flaws, we set objectives and started realizing them,” said Piotr Krzystek, the Mayor of Szczecin. “We created a professional investment offer, suitable for a European city”.

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Five industrial parks appeared around Szczecin, where investors could take advantage of special forms of encouragement. The parks had good road access, were prepared for construction and commencement of production, and began attracting investors from all over the world. Among those to locate their production facilities in the direct vicinity of Szczecin, the capital of Western Pomerania, were Bridgestone, a Japanese company, LM Wind Power, a Danish company and Finland’s Cargotech. The region – once eight in Poland regarding investment appeal – was now sixth and experts assessed Szczecin as the second most attractive investment region in Poland. Preparations were also being made for Szczecin to make a deci sive “about face” towards BPO and SSC. Offers made to investors and plots prepared for investments, located downtown, were beginning to find buyers. The real estate market began noticing that Szczecin’s potential is not being fully unitized. The d owntown area began resembling a construction site. “Although office buildings are still under construction, we are already beginning to look for companies that will be using them”, said Piotr Krzystek, the Mayor of Szczecin. The search for investors was conducted along with the promotion of the Szczecin 2050 – Floating Garden project. By 2050 Szczecin wants to be the most modern and most ecological city in Northern Europe, with its advantages stemming from openness, its young

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November / December 2011

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residents, high quality of life, and its location – near water and the natural environment. The idea – ambitious and simultaneously controversial – was awaiting its first test. “I believed that the world would accept our idea, but we were in suspense”, Krzystek confessed. Coordinated communication and promotional activities were beginning to lead to results.

accounting, IT, HR, engineering process and logistics. “For near-shore projects from Scandinavia, Germany or Holland there is not closer location”, convinces Mayor Krzystek. “The costs of running a business in Szczecin are still very low, also in comparison with other Polish cities, and the quality of employees and their work is continually increasing”.

The year 2009 was groundbreaking. The Danish company Coloplast and the Italian Unicredit decided to locate their fi nance and accounting centers in Szczecin. This was a qualitative change – both investments comprised one third of all foreign BPO p rojects undertaken in Poland during that year. Simultaneously, two large international brands appeared in north-western Poland, and decided to locate their F&A shared service centers in Szczecin. At the same time Tieto and BLStream from the IT sector were also experiencing a dynamic growth in their branches. Stream Global Services and Arvato Bertelsmann were developing at a steady rate.

Opinions regarding Szczecin are being confirmed by third-party analyses. According to the Jones Lang LaSalle report, the 70000 m2 of modern office space available today will at least double within the next two years. Apart from the existing Maris, Pazim and Oxygen buildings, the Inter Ikea Brama Portowa I and II complex will be erected. The Norwegian Real Kapital company is constructing the Piastów Office Park. Baltic Business Park is also erecting high-quality structures. In the Hanza Tower alone, which in 2014 is to have 28 floors, there will be over 20 000 m2 of floor space for modern offices and service companies. The Lastadia Office center will be constructed by the shore of the Odra River, facing the

Statistics were portraying Szczecin from a good perspective. Research conducted in 2010 showed that over 97% of Szczecin’s 63,000 graduates declared knowledge of the English language, and almost 90% of German. Higher education facilities were beginning to become aware of their role. Departments of Economy began teaching students to use the SAP accounting system, while technical departments, including IT departments, began coope rating with company owners in order to adjust learning programs to suit employers’ expectations.

water. “According to our concept, Szczecin’s new downtown area is to resemble Amager in Copenhagen, the Goeteborga center or Hamburg – modern office buildings and lofts in the direct vicinity of the river,” states Piotr Krzystek, the Mayor of Szczecin. “Since several hundred million euros of private funding has been invested in office buildings, it means that investors are recognizing that the time for Szczecin is just around the corner. The city’s current rank, maintained despite the worldwide recession at the BBB+ level, as showed by Fitch Ratings, indicates that the city’s finances and finance management are stable and the city’s development plans are reliable,” he adds.

Szczecin’s strategy is currently based on four pillars – the pro motion of production based on the city’s excellence and its location, emphasizing the connection with water and the sea, s upport for small and medium-sized companies, and the dynamic development of the corporate services sector. Authorities are treating the BPOs and contact centers as a polygon and an opportunity to learn and study the specifics of this branch. Ultimately they are on the road towards outsourcing advanced processes – finance and

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Szczecin’s investment strategy concerning the BPO and SSC sectors is not limited solely to the development of office infra structure. The Pomerania Technopark is being constructed to facilitate the IT branch. It will be the home for dynamic companies requiring cutting-edge forms of support for their development. Szczecin’s higher education facilities are expanding their

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offer dedicated to new service branches. The quality of foreign language education is improving – also in preschools and primary schools. “We are learning much from our cooperation with the Multinational Corps Northeast (editor’s note: a NATO corps with headquarters in Szczecin). We are paying attention to the requirements of our residents, tourists as well as the German, Danish and Norwegian populations residing in our city,” adds Krzystek. “Golf courses, a new philharmonics, the opera, easy access to services and trade, a sports hall, where in 2012 we will be o rganizing the European Volleyball Championships with Denmark”, all this increases the quality of life. Deloitte, during an SS/BPO conference entitled “Push the boundaries Barcelona 2011”, indicted Szczecin as one of Poland’s hot spots. Independent experts are beginning to treat the town on equal terms with cities that only four years ago Szczecin aspired to. “We are continuously learning and all projects are still underway. After the location decision we move on to after-care and busi-

ness development, and we are glad that not only new projects, but also existing ones, are dynamically developing in our city. The Norwegian company Reinertsen decided to open its prefabri cation facility in the vicinity of our neighboring industrial parks, but the company wants to locate its research and engineering centers in Szczecin. Reinertsen is also considering locating its F&A shared service center in our town. In a little while we will be announcing yet another big project, dedicated for the German market. We are continually developing our idea for Szczecin – a good place to work, but also a good place to live and call home,” – concludes Piotr Krzystek, the Mayor of Szczecin. Content provided by Szczecin City Council

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THE POMERANIA TECHNOPARK Support for IT Outsourcing in Szczecin Szczecin’s development strategy prioritizes support for innovative businesses and the development of modern technology. The Szczecin Science and Technology Park is the institution undertaking, in practice, the above priority, by carrying out acti vities to create a local and regional innovative environment, focused on the development of business activity, and especially the IT branch, including IT outsourcing. The Park implements these objectives by, inter alia, creating a favorable material, infrastructural, economic and social environment, which facilitates the establishment and development of small innovative companies, providing them with support, creating conditions for the corporate utilization of s cience, and the transfer and commercialization of modern technology. The Technopark: from concept to construction The most important project currently being realized by the Park is the construction of the Pomerania Technopark in Szczecin – a place where the concept of supporting innovative entrepreneurship and business development based on modern technology is implemented and put into practice. Vigorous undertakings to create and develop the area for this project are underway since the year 2007. In autumn of 2010 the first facility of the future Pomerania Technopark complex began its operations, located on the investment site in the direct vicinity of downtown Szczecin, within the completely modernized building that used to serve as a school. The facility is to serve as a business incubator for companies from the ITC branch and similar branches of technology. This way the prime necessity of local IT startups has been fulfilled; companies interested in obtaining support in the form of con venient office space and services provided by the incubation program which facilitate the development of small companies receive it in the facility. Simultaneously a dynamic environment aiding the development of larger IT firms was formed, companies cooperating via the West Pomerania ICT Cluster. Other IT business organizations also have their headquarters on the grounds of the first Technopark facility, e.g. the Netcamp

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Internet Industry Development Foundation and the Szczecin Linux /Unix Users Group (SZLUUG). Cooperating companies also are guaranteed access to professional IT training courses, managerial training and assistance in finding employees. The construction of the entire Pomerania Technopark complex is to revive Szczecin’s economy, activate the region’s economy and revive the MSP sector. The modern Technopark facilities and professional services are offered not only to new companies but also to developed companies which want to implement the n ewest forms of technology, hire employees or provide services. The main advantage of the Pomerania Technopark, which distinguishes it from office buildings or office parks, is the concentration in one area of both research and development facilities as well as companies interested in investing in innovative products and services. The investment will not only provide support for local innovative businesses, but will also increase Szczecin’s appeal to com panies from outside of Poland, which readily locate their branches in science and technology parks due to the parks’ organization, technical standards and specific mood, which facilitates both cooperation and competition with other companies. In the broader perspec tive the Technopark supplements Szczecin’s offer to investors for whom the presence of companies providing high-quality IT services is an additional advantage when deciding whether or not to enter a given market. Incubation for IT companies – supporting businesses and a chance for development The incubation activities conducted by the Szczecin Science and Technology Park at the Pomerania Technopark focus on new business initiatives from the IT branch and other branches which deal with telecommunication technology. The Park supports these companies mainly by including them in its incubation program, which prepares them for entering the market.

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The program, apart from offering preferential terms for office space complete with access to telecommunication networks and conference/lecture halls, also offers a series of meetings and training sessions which are to help less experienced entrepreneurs enter the market and adapt to its quickly changing conditions. In addition, the offer of renting office space both to companies with a secured position on the market and newly opened enterprises is to not only financially balance the facility’s activities but also facilitate the development of small companies, which will gain access to orders and information exchange as well as direct contact with experienced firms and individuals. Thirty offices are being rented in the first operational Pomerania Technopark facility, as well as conference rooms, training rooms and computer rooms. Average offices cover an area of approx. 25 m2. Freelancers and sole proprietors can also rent cubicles of approx. 12-14 m2. Common rooms which can be used by all occupants, including refreshment rooms, business meeting halls, conference halls and training rooms, facilitate integration among companies. A modern server room and warehouse space are also important elements of the Park’s offer. New investment – expansion of the Pomerania Technopark Expansion of the Technopark complex has just commenced; its completion is scheduled for the year 2013. Three new facilities will then be added to the Pomerania Technopark, with a joint surface area of nearly 11 000 m2. These new buildings will house the busi ness incubator, innovation center and computer center, with one of the largest server rooms in Poland. A large section of the park – the business incubation building – will support new businesses participating in the incubation program. New startup and spinoff companies requiring support in running their business and developing new or existing products will receive preferential treatment.

The second new facility – the innovation center – will offer o ffice space in the highest technical standard. This location will be occupied by developed companies from the ICT branch and similar branches, for whom the close proximity of the dynamic startups and interactions with other companies from their branch are an important stimulus for further development. The third new building will house a modern server room, meeting all requirements for this type of facility, including safety regulations, and will feature raised floors, ventilation and air conditioning, access control and a gas fire suppression system. It will be the largest facility of this type in the region, and one of the largest in Poland. The data center will initially house 10-15 server racks, and ultimately 200 server racks, located on two stories. Plans for the new buildings were elaborated with the office requirements of the IT branch in mind, while the friendly and stimulating design is to facilitate cooperation and development. The interior architecture will permit daily meetings among occupants, creating an informal network, a mood of information exchange and will lead to the creation of new ideas. In the future the Technopark will also include facilities which will support the complex realization of the Innovative Szczecin concept, i.e. a lifelong learning facility, specializing in new trends and technology in the field of education, as well as research and development centers, also for the IT branch and modern adminis tration, which – due to their unique nature – should operate in a creative environment. In the near future the Pomerania Technopark has a chance of becoming one of the leaders of innovative IT support, dynamically working to activate the region and the City of Szczecin, where IT techniques and developed IT services will compete with offers both from throughout the country and abroad.

Content provided by Szczecin City Council

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* Full Report available in JLL or HAYS Poland

November / December 2011

Education vs Outsourcing | Report

Szczecin: the ‘human’ capital Conclusion: Szczecin would therefore appear to be an ideal location to establish a Research & Development (R&D)centre, g iven the substantial and constantly growing number of technical gradu As per the theoretical analysis published by Dorota Wiezak- ates – see graph 2 below. Bialowolska PhD, human capital consists not only of the acquired degree, knowledge and other predefined abilities of a group of Graph 2: Graduates from technical faculties in Szczecin individuals, but also includes possible interests (skills learned) and their beliefs (multiculturalism, openness etc.). The desire to innovate, solve problems creatively and analyse various strategies is 2500 also important. Human capital

This article assesses the potential of the Szczecin market based on each form of capital highlighted below, providing an exhaustive analysis of the city’s human capital. Students in Szczecin

social sciences

economics and administration

17%

child care medicine technical engineering

humanities

5% 15% 5%

architecture and construction production and manufacturing transport services social services

law

12% 7%

1750

1684

2007 r.

2008 r.

2009 r.

1413 1169

1000

2005 r.

2006 r.

2010 r.

Source: Hays Poland analysis based on GUS data

Proficiency in foreign languages

Graph 1: Areas of study

1500

1916

1751

500

According to the General Statistics Bureau (GUS) Local Data Bank, there were 56,474 college and university students in Szczecin in 2010 alone. Of these, 15,476 completed their studies that year. The pie chart below provides the breakdown:

3% 4%

2000

computer sciences biology other

Before identifying the right location to invest in, it is vital to closely examine language skills. English is both spoken and written by almost all college and university students (97%) and is considered as a ‘common’ language. A second language is often required by employers, with German being the most popular, spoken by the vast majority of students (89%) and 42% is declaring advanced level. Such abilities are quite unique in comparison with the rest of the country. Conclusion: Szczecin has the language skills needed by service centres that deal with German clients. Graph 3: Knowledge of foreign languages among college/university students in Szczecin

Source: Hays Poland analysis based on GUS data

The research revealed that the greatest number of students specialize in social studies, such as psychology, sociology and international relations (9,500 students or 17% of total). Over 15% study economics and administration with a significant number of people specialising in medicine, primarily students at the Pome ranian Institute of Medicine.

100%

97% 89%

80% 60% 40% 20%

Investors from the Business Process Outsourcing (BPO)/Shared Service Centre (SCC) sector are most interested in graduates with an economics or technical background, especially those with IT skills.

English

German

19,5%

16,3%

French

Russian

Source: Szczecin City Council

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Education vs Outsourcing | Report

Other languages are significantly less popular, however still spoken on a larger scale compared to the Polish average: 19.54% speak French while 16.25% can converse in Russian. For more specific information, again refer to Graph 3. Development capital

The average salary for specialists in the service sector is u sually higher than the national average (Zl 3366 per month; second quarter of 2011) but still much lower than in the larger, more deve loped markets. Table 2: Gross monthly salary in Szczecin’s BPO/SSC centres

The analysis conducted by Dorota Wiezak-Bialowolska PhD also cover development capital, which refers to a region’s innovation potential, based on an assessment of local market investment. Continiuosly Szczecin is one of eight key SSC/BBO markets in Poland, it is growing and has the potential and infrastructure to attract new investment. The city is currently home to nine service centres that have been established with foreign capital. See Table 1 below for full details. Table 1: BPO/SSCs in Szczecin Arvato

BPO

GaveKal

BPO

UniCredit

SSC

Sonio

SSC

Coloplast

SSC

Unizeto

ITO

Tieto

ITO

Stream Global Services

ITO

BLstream

R&D

Junior Specialist

2 200 – 3 500

Specialist

3 000 – 6 500 *depending on specialization

Senior Specialist/Team Leader

4 500 – 12 000 *depending on specialization

Source: Hays Poland

Poland is perceived as a particularly attractive place to invest in knowledge-based, innovative sectors of the economy. Therefore Szczecin has a strong comparative advantage as an emerging market in being able to attract greater investment.Structural capital Structural capital Structural capital is defined as social and technical infrastructure. Social infrastructure consists of a group of public instruments that fulfil the social, cultural and educational needs of the population. Technical infrastructure is composed of many elements, the most important of which are transport, telecommunication, internet and computer systems. Technical infrastructure

Source: Hays Poland market research

The main functions centralized in service centres are IT processes, R&D of new technologies and customer service (mostly with German). The existing business environment creates a solid base and facilitates the development of new projects. Moreover, the increasing number of technical and engineering graduates allows for quick growth of the R&D processes.

Technical infrastructure is a vital element of every market and every organisation should carefully consider this when deciding to invest. Important aspects such as access to computers, software and the internet are measured and assessed in each region by the ‘computer index’. Graph 4: number of computers per person in Poland’s large business centres

Existing employers with customer service functions are seeking candidates who have the ability to speak foreign languages and want to develop their skills in other areas of the organisation, such as Banking, Accountancy & Finance and IT. Therefore, service centres not only offer training for new starters but also provide the opportunity to further develop and progress within the company.

It is estimated that 2.4% of all service sector employees in Poland (69,000) work in Szczecin and since 2008 the number of people employed within sector has risen by 87%. Such rapid change is clear evidence that the service market is expanding at a tremendous pace. (source: ABSL).

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10,04

10 8

8,08

8,10

8,55

8,68

10,48

8,79

7,11

6 4

Szczecin Katowice

Łódź

Warszawa Wrocław Trójmiasto Kraków

Source: Hays Poland analysis based on GUS data

Poznań

Education vs Outsourcing | Report

The computer index in Zachodniopomorskie Voivodship is as high as 91.5% in middle schools, 79.6% in high schools and 69.3% in vocational schools. Another significant aspect, which reveals a lot about market inno vation potential, is the number of computers per student index – see Graph 4. In the case of high schools, Szczecin has the best score among large cities in Poland (seven students per computer). Higher education in Szczecin Higher tertiary institutions play a leading role in the development of human capital in a given region. There are as many as 18 higher education institutions in the city, four of which have university status: the Pomeranian University of Medicine, Maritime University, The University of Szczecin and The Technological University of the Zachodniopomorskie Voivodship. The complete list is included in Table 3 below. Table 3: Higher education institutions in Szczecin 1. The Szczecin Maritime University 2. The Pomeranian University of Medicine in Szczecin 3. The University od Szczecin 4. The Szczecin Academy of Arts 5. The Public Administration College In Szczecin 6. College of Economy Tourism 7. College of Humanities TWP 8. College of Child Care TWP 9. The Szczecin College of European Integration 10. College of Foreign Languages 11. College of Applied Arts 12. College of Technology and Business In Szczecin 13. College of Theology and Humanism 14. Collegium Balticum 15. Vocational Higher School „OECONOMICUS” PTE 16. College of Management 17. Zachodniopomorskie School of business 18. Zachodniopomorskie University of Technology Source: Hays Poland market research

Park, which, upon completion, will provide over 67,000 m2 of offices to the market and double the existing supply. The construction of Hanza Tower is to start shortly. Over 85,000 m2 remains in planned projects. However only 17% of space being developed has been secured with pre-let agreements. Transition to tenant-favourable market Enhanced construction activity is certainly very good news for future occupiers, but should nevertheless be noted that first buil dings will be delivered no sooner than 2012. In 2011 the Szczecin’s office stock will expand by only 1,500 m2 located in renovated tenement. Limited modern office supply and a significant recent increase in demand had pushed prime headline rents up and for the most attractive high standard, city centre space they range from €11.5 to €14 / m2/ month. However vacancy rate of 9.5% in existing buil dings and over 80% in those under construction allow us to assume that Szczecin’s office market will transform into the tenant-favourable conditions and remain tenant-favourable at least by the end of H1 2013. Further more occupiers looking for the space in buildings under construction may count for generous incentives not only in rent level but also concerning fit-out allowances and length of the rent free period. Improving accessibility Szczecin is an important transport hub for north-western Poland. The city has a direct connection to Europe’s transport network via the A6 highway and to inland Poland via the recently c ompleted S3 express way to Gorzów Wielkopolski. Even so, Szczecin still lacks a convenient connection to both Bydgoszcz and the T ri-City. With regards to the latter, environmental approval has been obtained for improvements on route No. 6, and the road will be upgraded to meet express road standards. However, construction will not start before 2013. Additionally, numerous road improvements and new infrastructure projects have been undertaken or are planned for the city.

Booming construction activity Social capital Szczecin has made enormous progress in the preparation of real estate infrastructure for potential occupiers. The overall supply in Szczecin by the end of H1 2011 reached over 71,000 m2. Up until the end of 2010 the construction activity of developers was quite limited, the success of the OXYGEN building demonstrated that the demand for modern office space in the city exceeds the supply. This has mobilized other developers to launch new investments. At present, four schemes are under construction: Piastów Office Park I, Brama Portowa I&II, Lastadia Office and Baltic Business

According to Dorota Więziak-Białowiecka PhD, social capital includes rules, norms and values that are held in high regard by a certain society, common practice, tradition and other elements, which together form a vast network of formal and informal relationships between individuals and institutions. Szczecin is a unique market defined by its history, geographical position and culture. The city’s location provides a perfect environment for business. It has long-standing cultural and historical ties with almost all

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Education vs Outsourcing | Report

djoining states, which makes it very cosmopolitan and in spirit. a The people are very welcoming to other nationalities and adapt easily to a diversified work environment (confirmed by a separate study, “Diagnoza Społeczna 2009”).

coming a more attractive place to live and work, despite lower salaries compared with western Europe. Young EU citizens appreciate that they can start a career and gain professional experience in service centres that are based in Szczecin.

Social trust

Conclusion

Szczecin is also a regional leader in social trust, which means that its inhabitants live in harmony with their neighbouring states and take ownership for their own actions. This is an important characteristic, which leads to greater trust and thus an enhanced quality of teamwork.

Each form of capital described above proves that Szczecin has not only significant potential to attract skilled professionals but provided an ideal location for global organisations to establish their knowledge-based functions. The ’human capital’ aspect is one of the city’s best assets, which takes in consideration language profi ciency as well as the educational and professional background of the inhabitants. Szczecin is a unique market with a multicultural atmosphere, which is open for new challenges and all the benefits that innovation can bring.

Geographical advantage Situated at the centre of three of the most important cultural hubs in central Europe – Poland, Germany and Scandinavia – Szczecin has well-established transport links with its . Many of its citizens have prior experience of working abroad and are aware of the customs of many European countries. There has been a recent increasing migration trend to Szczecin from the EU member countries, such as Germany and Scandinavia. Poland is be

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Authors Jadwiga Naduk, Tomasz Szreder, Jan Szczepanowski - HAYS Poland Agnieszka Sosnowska - Jones Lang LaSalle

Education vs Outsourcing | Articles

Infrastructure Investments in Knowledge, Education and Economic Cooperation The economic environment in highly developed countries Highly developed countries, such as the United Stated, Great Britain, Canada, Germany and France, have for several years been employing the model of open cooperation between educational facilities and business circles. The success of these countries’ economies is based, inter alia, on stimulating business activity and searching for innovative solutions capable of satisfying the increa singly refined needs of consumer society. Each of us can fulfill his or her “American Dream” – if only we are resourceful; meaning creative, imaginative, capable of find-ing a market niche and persistent in realizing set objectives. This approach, an allusion to the saying “from poverty to millionaire”, is instilled in Americans since childhood. Yet real economic success depends not only on the faith that our dreams of economic expansion will come true or on persistence; it depends mostly on know-ledge, called by scientific circles “intellectual capital”. The knowledge necessary for success in business almost always depends on a given sector and branch. To a certain extent it is possible to outline basic information, helpful to those running their own business, i.e. general principles of how a market economy functions, how to manage a company, etc., but most often success is possible if we have access to information tailored to the specific nature of a given branch. This is due to the fact that in highly developed economies individual markets are very saturated with business entities, thus in order to succeed one either needs to find a new market, or enter a given market with an offer that

satisfies needs which were not satisfied before. This means that a company must specialize in a given area of the market, which is consistent with the concept of an economy based on knowledge. In this case, general knowledge is not enough. In order to succeed on a given market a company must have knowledge concerning its mechanisms, including information about the other entities participating in this market. This type of information can be acquired through market research, which is the domain of market research companies and research and development facilities, including universities and business support institutions. Business support institutions dictate the strength of highly developed economies, as they are the natural link supporting business development. Their role is to actively mediate between scientific circles and the business circles, to initiate and coordinate activities focused on a given sector or branch of the economy. These activities can involve the organization of training courses, seminars, conferences or economic missions to other parts of the world, or acquiring business partners, initiating coope ration, or ensuring that knowledge or innovations become m arket practices. In highly developed countries institutions of this type are clustered around higher educa-tion facilities. This m eans that western universities form institutions that remain in their structure in order to improve cooperation with companies. They thus rely on their own intellectual capital. As a result of these activities, techno logy is commercialized, i.e. is merged with market practices, in various forms. The Center for Open Innovation at the Haas S chool of Business, University of California, Berkeley, is one of these

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Education vs Outsourcing | Articles

institutions. Its activities are based on a revolutionary m odel of business innovation, where companies are not limited to imple menting solutions elaborated within the Center, but can also utilize those elaborated by other institutions. Colla-borating with the Center is the Berkeley Innovation Forum, an exclusive club for those who manage innova-tions, whose members include IBM, Kellogg, Unilever, Coca Cola, HP and Cisco, and whose purpose is to exchange information regarding the implementation of innovative solutions and the problems that stem from these solutions along the business-science route. Membership fees are entirely used to fund research and development.

Research and education infrastructure for the economic development of West Pomerania

Investment boom in Poland

The direction of these investments indicates a change in the approach to cooperation between scientific circles and business circles. This is of particular significance in the context of the West Pomerania Province’s economic potential. The West Pomerania Province is first in the country regarding the number of registered companies per 1000 residents, with an indicator of 125.9, w hile the average for Poland is 98.5. The West Pomerania Province also has the most diversified structure of companies regarding size in Poland. The number of microbusinesses per 1000 residents e quals 129% of the average for the country. In a ranking of investment appeal prepared by the Institute for Market Eco nomics, the province had advanced to 6th place in 2009. The area’s biggest advantages were road access and activities under taken to o btain and maintain investors. In 2007 private inves tors invested 90 million euros in the region. In 2008 the province managed to acquire such companies as GaveKal Analytics P olska sp. z o.o. (initially 20 people employed, and ultimately 50 p eople employed in development and data updating centers), Valassis, a British company (160 to 300 employment spots in the data processing center), and UniCredit, an international bank (the target is 450 employees in the regional competence center). In 2009 the biggest investment in Poland was the project carried out by Cargotec, a Finnish c ompany. The project, the estimated value of which reached 64 million e uros, is to ultimately offer jobs to 400 people. The largest single investment recently carried out in the province is the Bridgestone tire factory near Stargard Szczecinski. According to specialists, Szczecin is one of the most attractive Polish cities for services centers. The Poland as the desti

For several years there has been a noticeable increase in infra structure investments in science and higher educa-tion in Poland. University buildings are being modernized in many cities; not only edifices undergo change, but also their functionality. More and more often Poland’s university buildings are equipped with infrastructure resembling that found in Western Europe. Classrooms are adjusted to meet the needs of the handicapped, i.e. are e quipped with aids for the hearing impaired, or increase the c omfort of both lecturers and students. Multiple multimedia solutions are present in university lecture halls (multimedia projectors and screens, videoconference equipment, speakers, air conditioning and many others) and are slowly becoming a standard. Of particular importance are infrastructure investments which give evidence to the highly specialized field of knowledge developed by individual academic facilities in the country. There are many examples, but let us focus on the Center of Medical Technology Transfer Technology Park in Cracow, formed by the Pope John Paul the Second Specialized Hospital in Cracow. The Center is the first technology broker in the Lesser Poland Province specializing in the medicine and pharmacology. The Center’s mission is to support innovation, cooperate with the business industry, manage intellectual property rights and obtain outside funding for devel-opment projects for science and research facilities and companies.

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The flow of funding from outside sources (mainly the EU) enabled the realization of many infrastructure invest-ments, also in the West Pomerania Province. Among these are the Nanotechnology Didactic and Research Cen-ter located at the West Pomerania University of Technology, the Pomerania Technopark located at the Re-search and Technology Park in Szczecin, or the SERVICE INTER-LAB Center of Knowledge Transfer and Innovation for the Service Sector, located at the Faculty of Management and Eco nomics of Services at the University of Szczecin.

Education vs Outsourcing | Articles

nation for Shared Service Centers (KPMG) report indicates that Szczecin is one of eight large metropolises which were assessed as appealing locations for service centers, including accounting and IT services, as well as companies providing services to international customers. In the direction of BPO/KPO The University of Szczecin’s Faculty of Management and Eco nomics of Services, aware of the social and economic transitions stemming from globalization processes, has been consequently implementing a policy of syn-ergic cooperation between scien tific circles, education facilities and business circles. The faculty’s activities are focused, inter alia, on supporting initiatives concerning the cooperation of key branches in the West Pomerania region. An example of this type of activity is the Innovativeness and Cooperation the Strength of the Sea-side’s Economy project (Innowacyjność i współpraca siłą gospodarki morskiej regionu, InMor), the objective of which is to increase the competitiveness of the West Pomerania Province in the field of the implemen tation of innovative solutions on the maritime market through the cons truction of communi cation systems and the coope ration of companies providing services for the maritime market, the research and development institutions and business support institutions. Another example is the project entitled “Specialized Support for the Innovativeness of Micro, Small and Medium-Sized Companies” (Branżowe wsparcie innowacyjności mikro, małych i średnich przedsiębiorstw, BTT), created in order to increase the innovativeness of companies from the construction branch, the tourist sector as well as the transportation and logistics branch. As a first category scientific institution, the Faculty conducts research projects in collaboration with entities from all over the world (such as: Pathways to Work: An Employment Upgrade Programme for Young Immigrants, Vocational Education and Training for Business Advisors). These projects allow for the comparison of the West Pomerania Province with better deve loped (e.g. Great Britain, Belgium), and more poorly developed (e.g. Romania) European regions. The projects have both a scientific and a practical aspect, as they aspire to creating the framework for the initiation of life-long learning programs for local residents in the European context. Currently the Faculty’s authorities are actively supporting Szczecin’s investment policy which, apart from research and development (R+D), has pinpointed the Business Process Outsourcing sector as a strategic branch for the region’s economy1. The faculty has initiated the Cluster of Advanced Professional Services (Klaster Zaawansowanych Usług Profesjonalnych), for the BPO sector. The aim of the evolving structures of corporate ties is to elaborate a development strategy concept for entities 1 Szczecin dla Ciebie (Szczecin for You). Strategia rozwoju Szczecina 2025 (Strategies for the Development of Szczecin 2025), Szczecin 2011.

linked with the professional (business-related) service industry by creating and popularizing new technological solutions, product-related and organizational solutions, solutions for the exchange of e xperiences and use of available resources. The two infrastructure investments currently in progress (“The Conversion and Expansion of the University of Szczecin’s Faculty of Management and Economics of Services Building” and creation of the SERVICE INTER-LAB Center of Knowledge Transfer and Innovation for the Service Sector), the costs of which are estimated at 76 million PLN, are to create optimal conditions for the development of synergic cooperation between scientific circles,

education facilities, and business circles. The conversion and expansion of the Faculty is to facilitate teaching and the organi zation of conferences. The infrastructure will match the standards set by universities in Western Europe. The expansion will also increase the number of seats in lecture halls in order to make it possible to organize conferences and lectures. Multimedia equipment in classrooms will offer further information transfer possibilities, also in an international environment. The SERVICE INTER-LAB is to become a modern institution combining scientific, educational as well as re-search and development aspects, with an area of 9500 m2, which – along with the building’s surroundings – is to become an integral element of the Cukrowa-Krakowska University Campus. As part of the invest ment, the Center is to have open access to interactive information databases and a cutting-edge service lab, including research and analysis equipment, as well as a research workshop. The actions undertaken by the Faculty will create optimal conditions for the s ocial and economic development of the West Pomerania Province, and especially the service sector, including advanced services. This requires a change in the Faculty’s hitherto formula of activity in the field of science, education and cooperation with the market. In the field of science, the Faculty is planning to undertake steps to increase the capacity of specific units to execute r esearch programs with reference to the actual needs of companies. C ooperation of the Faculty of Management and Economics of Services with local

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Education vs Outsourcing | Articles

authorities has created the opportunity to accentuate the significance of scientific research for various decisional processes on the strategic management level. Due to the above it is necessary to increase the role of scientific r esearch undertaken in order to s olve problems stemming from market practices, and sub sequently implement innovative solutions created for the local service sector.

and 6 fields of study (economy, European studies, finances and accounting, logistics, management, tourism and recreation), with 37 specialties in total. Graduates are hired by the local service sector, including the BPO branch: Coloplast Shared Services sp. z o. o. Arvato Services Contact Center, Stream Global Services, Tieto and the UniCredit Group.

In the field of education, continuous learning opportunities are becoming increasingly significant. The appeal of an educational offer will soon depend not only on the specialty and whether it meets current employment market demands, but also on its uniqueness and exclusivity, and the extent of practical training. An orientation on expanding the educational offer, which will allow students to obtain prestigious skills and meet the demands of the BPO sector, could lead to an increase in the number of students, including skilled students. Specialists and practitioners from parti cular BPO companies will be included in the teaching process, which means that these companies will be given the opportunity to participate in shaping learning programs, conducting lessons, orga nizing vocational training and internships. It will also be possible to form so-called ordered specialties, which are tuition-based fields of study oriented to meet the needs of a specific company.

The development strategy adopted by the chairmen of the Faculty of Management and Economics of Services at the University of Szczecin is congruent with the development concept approved by the City of Szczecin and the authorities of the West Pomerania Province, proof of which are the abovementioned infrastructure investments and changes taking place in the sphere of research and education. In the near future there are plans to make further adjustments in order to provide a highly-qualified staff, including a management staff for service companies, especially the BPO sector. The future perspective of intensified collaboration between scientific circles and business circles will lead to the realization of projects based on more advanced technology and knowledge, modern techniques and technology, which will create optimal conditions for the KPO (Knowledge Process Outsourcing) sector in Szczecin. A flexible approach to education as implemented by the Faculty will ensure almost instantaneous reaction to market demands, which – when combined with the elaborated standards of management processes optimization – will combine to create Szczecin’s added value, as the European BPO/KPO Center.

The near future The Faculty of Management and Economics of Services at the University of Szczecin has for several years been working on adjusting the education program to meet the needs of the local service industry, including the BPO sector. Elements of the program are conducted in a foreign language, which g uarantees that gradu ates will have a very good knowledge of foreign languages. Currently, the Faculty has over 3.5 thousand students

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Author: Professor Piotr Niedzielski, PhD. Head of the Department of the Efficiency of Innovation, Dean of the Faculty of Management and Economics of Services of the University of Szczecin. Creator of the SERVICE INTER-LAB Center of Knowledge Transfer and Innovation for the Service Sector.

Education vs Outsourcing | Articles

The University of Szczecin The University of Szczecin is currently the largest higher education facility in West Pomerania. The University has 13 faculties located in Szczecin: Humane Studies, Philology, Law and Adminis tration, Management and Economics of Services, Economics and Management, Geosciences, Biology, Physical Culture and Health Promotion, Mathematics and Physics, Theology, as well as campuses in Jarocin (Administration), Wałcz (Economics), and Gorzów Wielkopolski (Social Sciences and Economics). Within the 25 years since its establishment, the University has experienced an impressing increase of attending students. During the first academic year (1985/86), 5435 students started their studies (including 3504 attending the standard full-time study program), but during the 2007/08 academic year their number rose to approximately 37 thousand; a sevenfold increase. In 1985 the University offered 17 fields of study, but by the 2011/2012 academic year students could choose from among 47 fields of study. Currently the University has nearly 26 thousand students, of which less than half participate in the weekend study program. The University of Szczecin helped over 90 thousand graduates receive their diplomas. The Bologna Program has been implemented. The faculties which have received accreditation offer the third degree study program – doctoral studies. The University of Szczecin can grant PhDs in 14 disciplines: biology, economics (two faculties), geography, history, pedagogy, philosophy, law, administration, linguistics, literature, theology, physics and mathe matics. This means that the University of Szczecin is a first cate gory facility, and fulfills all regulatory requirements. Six faculties have full academic credentials. Between the years 1985 and 2011 (by June) the University of Szczecin had awarded 767 PhDs, 98 post-doctoral degrees (including 3 during the previous academic year), 52 faculty members (38 by the year 2003) received the title of Professor (including 2 during the previous academic year). International cooperation is an important element of the Univer sity of Szczecin’s strategy, as it is an element which increases the quality of research and education, and promotes Szczecin and the region in other parts of the world. The first agreement concerning cooperation with a university outside of Poland was signed as far back as 1985. The agreement was signed with the Ernst Moritz Arndt University in Greifswald, Germany. Currently cooperation is possible thanks to bilateral agreements signed with 92 higher education facilities and scientific institutions, located in 19 c ountries (including Belgium, China, France, Iraq, Germany, R ussia, Sweden, the USA and Italy). The University of Szczecin has been actively

Photo by W. Downar

participating in the Socrates/Erasmus program, due to which the University of Szczecin cooperates with 48 universities located in Belgium, the Czech Republic, Denmark, F inland, France, Greece, Spain, Holland, Latvia, Germany, Portugal, S lovakia, Sweden, Turkey, Italy and Great Britain. During the 2010/2011 academic year 131 students traveled to a different country to study, while 21 found internships abroad. Our University welcomed 73 foreign exchange students. Forty-two academic teachers conducted lessons outside of Poland, while 103 faculty members traveled abroad for training. The University of Szczecin’s Faculty of Law and Administration, together with universities located in Spain, France and Italy, are continuing a unique master’s program; the first of its kind in the European Union. Per year, approximately 400 faculty members and 200 students travel abroad, including 200 for semester/annual studies. During the year 2010, 600 university faculty members traveled abroad, while 70 researchers from outside of Poland came to work at our University. The University of Szczecin has welcomed students from: Byelorussia, China, the Czech Republic, Denmark, France, Finland, Iraq, Germany, Russia, Turkey, Italy and Latvia. Content provided by University of Szczecin

November / December 2011

Who is who in outsourcing? | Interview

Interview:

Piotr Krzystek Mayor of Szczecin

Outsourcing&More: Dear Mr. Mayor, Szczecin is a dynamically developing city, one of the few in Poland with a clearly-defined, long-term development strategy, which is presented to the p ublic. How was the Floating Garden 2050 project initiated and what purpose does it serve? Piotr Krzystek, the Mayor of Szczecin: We wanted to try to redefine the city. I don’t mean creating a new logo, slogan or color theme. We needed a new philosophy, a way of communicating, thinking about Szczecin. We needed a long-term strategy. With this approach in mind, we employed research teams, engaged opinion-forming groups and the city’s residents. I participated in the project from the very beginning, which is why I accepted the final concept. Floating Garden 2050 is a brand founded on the town’s development strategy. I think that if I had not been working personally on the concept, it would have been harder to convince me to approve such a bold solution. Szczecin has been working hard to change its image. It’s a difficult task, as the change in perception has to start from the residents themselves, and then spread outwards. I believe, however, that we are on the right track, as we are systematically realizing our plan; on the one hand by realizing new investments, and on the other by showing that there is no other city like Szczecin – a metropolis, with a metropolitan zone, but also with water, forests and parks; a great place to live. O&M: Over the last 20 years Poland has been in the circle of interest of many international investors. Which branches is Szczecin interesting in, and why? PK: We’ve been strongly supporting companies specializing in modern forms of technology. We have undertaken a series of actions which are to facilitate the establishment and operation of such companies. An example is the “Pomerania” Technopark. We invested 100 million PLN to create: a business incubation center, an innovation center and computer center. We will build a few hundred meters of modern office space which will be used mainly by new entrepreneurs. To help them start their businesses, the offices will be rented to them on preferential terms – the longer someone has been running their business, the more he or she will have to pay for office space. We also did not forget about production companies. A Special Economic Zone was created in Szczecin in 2010, covering 73 hectares of Szczecin’s right river bank. The city will equip it with necessary technical infrastructure

November / December 2011

and communication routes. Once our work is completed, Szczecin will have at its disposal a fully developed industrial area, which will encourage production companies to situate their headquarters within the city. O&M: Outsourcing is a broad term, which for many years had been associated in our country mainly with call center services, and later accounting services, legal services, advisory services, as well as others; recently our country has become the leader in attaining investors from the BPO and ITO sectors. What is Szczecin’s position on Poland’s map of such investments, and what are the city’s plans concerning this sector? PK: The town’s economy is changing. We are very engaged in developing the modern services sector. We were able to obtain two important job providers in this field, including the UniCredit bank, which opened a center for German-speaking clients in Szczecin. We will be striving to encourage more companies from this sector to set up their businesses in our city. Our city has many advantages. We are an academic city; we have thousands of well-educated graduates. This is a serious argument for the BPO sector. Another good sign is the increase of investments financed by private funding. New job spots are being created; we believe there will be nearly 700 new job openings within the next 12 months.

Who is who in outsourcing? | Interview

O&M: Due to its location Szczecin is the natural choice for inves tors from Germany or Scandinavian countries. How does Szczecin take advantage of the benefits stemming from its location? PK: Without a doubt Szczecin is “closer” to Berlin or Copenhagen than Warsaw. We have excellent communication routes with Western Europe. This is our advantage. We are on good terms with our neighbors. We cooperate with foreign diplomatic posts and economic representatives. We participate in every important conference and trade fairs, where we present our offer. O&M: Many companies from the outsourcing branch establish their offices in large office buildings. The “open space” work environ ment is preferred to work in small offices. In addition, BPO investors pay attention to IT and energy safety. What is the current situation on Szczecin’s office building market and how will it change over the next few years? PK: Developers have detected Szczecin’s potential in this area long ago. Currently we are experiencing an investment boom – high-quality new office spaces are being built. There are at least a few investments of this type in Szczecin – those already completed and those underway. Thanks to these investments over 100 thousand square meters of new and high-quality office space will be made available within the next 2 or 3 years. The Echo Investment company has already completed their construction work, while JW Construction, SwedeCenter and SGI are still working on their projects. O&M: The outsourcing branch requires a lot of professionalism. Companies that decide to realize processes based on the outsourcing model often entrust very important processes to third parties. Outsourcing companies must guarantee a high level of services, which are regulated by SLAs (Service Level Agreements). Quality can be maintained with the help of technology, but mostly depends on the staff; their skills, abilities and experience. Is the education sector in Szczecin, the high schools and higher education facilities – including the University – prepared to train employees for the outsourcing sector? PK: The higher education facilities are one of the motors facilitating Szczecin’s economic development. What’s important, schools are beginning to integrate more and more with the business circles, and open new fields of study subsequent to consultation with busi ness owners. Cooperation between these two sectors is becoming more frequent. We do not have to convince anyone that a region’s development is impacted foremostly by innovative companies, which transfer technology from education centers to the economy, and also hire and create specialists. O&M: We’ve had the opportunity to speak about location, real estate and human resources. For this last group a town’s c ultural offer is also significant. Often the owners of companies from

November / December 2011

Who is who in outsourcing? | Interview

broad – and the company’s workers staffing outsourcing compa a nies – are foreigners who want to spend their free time in an interesting way. Which cultural events taking place in Szczecin could interest foreigners or those who have moved to Szczecin from other Polish towns?

the “Pleciuga” Puppet Theatre were constructed thanks to our cooperation with a private investor. The Szczecin Philharmonic’s new building will become an icon of the city’s architecture and will be a real jewel. The building was designed by the Barozzi-Veiga Studio from Barcelona. The above are just a few examples. O&M: Mr. Mayor; each investor finds it important to create and maintain good relations with local authorities, both when entering the local market and during the later development phase. How is Szczecin’s City Hall overseeing the needs of investors from abroad? PK: We’ve created a preferential system and a profes sional Investor Assistance Center (one-stop-shop), which provides help during the project realization phase, and also – which is equally important – during the post-investment phase. We have well-prepared professionals. Each offer is tailored to meet the n eeds of an individual investor. We help with formalities, facilitate contact with higher education facilities, and assist with any needs. We build relationships based on professionalism, openness and stability.

PK: In order to encourage tourists both from Poland and abroad to visit Szczecin, we have been systematically investing in broadly understood culture. We host international events, build culture-related and sports-related structures. Tourism and structures designed to facilitate it are one of our priorities. Even before the construction of our new indoor swimming pool was completed, the city was granted a permit to organize the European Aquatics Championships. In December of 2011 the best swimmers from our entire continent will be competing in Szczecin. News about the construction of a sports and entertainment hall was enough for our city to be given a proposal to host the men’s European Volleyball Championships in 2013. In 2013 Szczecin, the capital of Western Pomerania, will also be welcoming the participants of the world’s largest sailing event. In August the participants of the Tall Ships’ Races will sail to Szczecin. The city will be organizing sailing finals for the second time. We organized this event in 2007. The event was a big organizational, media and economic success. For two days, over two million people were given the opportunity to see these wonderful sailing ships. We focus on activities that facilitate the city’s development and enforce the image of Szczecin as a friendly and open city. Szczecin offers great conditions for practicing water sports, and is known throughout Europe for its beautiful, historic seaside. This is why we have been modernizing three of the city’s most popular boulevards and are planning to construct a modern yacht port on the Grodzka Island, located downtown. New headquarters for

November / December 2011

O&M: The BPO branch offers its services to the public sector. Among outsourced services are inmate monitoring services, animal lifecycle supervision, scholarship programs for students, traffic enforcement camera analyses, marketing services for the promotion of the development of renew able energy, purchase processes, over-the-phone information centers, as well as basic services, including accounting services, human resources management, as well as management of tax payments. Do you foresee the possibility of the town’s many public sector institutions cooperating with the outsourcing sector? PK: Creating centers of mutual services or outsourcing p rocesses, especially business processes, is the next phase of the deve lopment of every organization. Before this can take place, how ever, it is necessary to consolidate the organization’s structure and activities. We can assume that every municipality’s activities could be consolidated or merged. Yet it is important to notice, that these activities almost always end with the issuing of an administrative decision – and this task cannot be delegated. This is why out sourcing some activities currently handled by government offices is an interesting perspective – yet we are limited by a series of external circumstances. O&M: Thank you for the interview; we wish you luck in finding new investors.

Who is who in outsourcing? | Company presentation

Scientific Services „The real value is not information or technology. It is the knowledge about the customers and its use for customer relationship management”. F. Newell- Loyalty – Oxygen of the age

The direction for Scientific Services development is creating a strong, stable outsourcing company offering high quality services in its field of expertise. These services are implemented in the following areas: Data entry and data base management Call center Debt recollection and financial advisory services. Warehousing and logistic

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Scientific Services Ltd has been operating as an outsourcing center for many companies and institutions within operational, marketing and telemarketing support as well as vindication and debt restructuring for last 8 years. In 2007 the company was granted an award in the contest Mazovia Company of the Year in the category “Business Services”. The jury of the contest u nder the patronage of the Mazovia Voivod distinguished companies that show a high quality of business activity, high level of compliance with ethical principles and engage in activities on behalf of their environment.

Services Clients divided into sectors

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This motto is a fundamental value on which Scientific Services bases its activities and principles for building relationships with Clients. As an outsourcing services provider, the company s upports its Clients in gathering consumer information and provides the means for approaching those consumers with r elevant information and an adequate offer.

Source-company’s materials

One of the most important company’s activities is support for loyalty programs. Within this activity a data base of programs participants’ is always being created. It is essential that the data base has a very high quality because low quality data base c auses more damages than benefits (costs of mailing and prizes s ending). Commissioning such services to a specialized out sourcing company like Scientific Services grants the client tangible financial and operational benefits.

November / December 2011

Who is who in outsourcing? | Company presentation

Below we outline the outsourcing activities that we render for one of our clients. This is a very big international company and the cooperation started over 3 years ago. Scientific Services is respon sible for creating and managing Client’s consumer database. Our responsibilities include: Organizing and verification of previously collected data in cluding data base standardization and deduplication, Preparing coupons from marketing action for the data entry process, Entering data from the coupons, High volume production of mailing materials, High volume shipment of marketing packages, Servicing postal returns, Servicing direct marketing campaigns, servicing incoming access forms, fulfillment and sending of prizes. As a result of our services our Clients receive a high quality data base which is a tool to communicate effectively with the parti cipants of marketing actions and loyalty programs. For some time Scientific Services Ltd has been consequently executing its development plan including improvement of the technical background for company’s activities and enforcing wide-scope sales plans. Scientific Services is a beneficiary of EU program „Increase of company’s competitiveness through invest-

November / December 2011

ment in infrastructure of IT and communication” under priority II “Accelerating e-development of Mazovia region„ This year we made significant purchases, partly refinanced by the EU to develop and modernize our technical base. The technical and IT solutions that Scientific Services has currently at its disposal enables the company to render services at the highest possible level. Content provided by Scientific Services

Scientific Services Sp. z o.o. ul. Miedziana 11 00-835 Warszawa biuro@scientific.waw.pl www.scientific.waw.pl

Who is who in outsourcing? | Articles

Results of a poll „Labour Market Monitor” of the Randstad Research Institute

From optimism into pragmatism? As many as 80% of Poles believe in finding a specific job and two of three respondents are satisfied with the job they have – such are results of the employee opinion poll “Labour Market Monitor” performed by the Research Institute Randstad. However, the economic situation and stagnation in the labour market have resulted in a drop in the employee mobility coefficient. Despite a declared belief in improved efficiency if the company were to be managed by a woman, every other respondent would rather have a male as the manager. Decreased mobility in the labour market The developing stagnation stops employers from increasing employment or pay raises which affects professional mobility of Polish respondents. The results of an international poll carried out by the Research Institute Randstad “Labour Market Monitor”, there has been a material drop of the number of respondents who had changed jobs in the six month before the poll. The ratio was 27% in February, 21% in May to drop to 17% last August. Along with rotation in the labour market, there was a drop in the mobility index*1 among Poles which was 105 points (as compared to 108 in the previous poll last May and 117 last February). Nevertheless, the result is the highest among all the other research countries. Agnieszka Bulik, Member of the Management Board of Randstad explains: “At the beginning of 2011 the labour market offered more opportunities to change jobs so our professional mobility was higher. However, the previous optimistic approach among employees has been weakened with the protracting uncertainty and a careful approach by employers to future plans. Being uncertain as to the future, Poles put aside thinking about finding a new job focusing rather on certainty in their current ones. Bearing in mind the seasonal nature of the labour market which results in a reduced number of job offers in the winter, the index is expected to continue to decrease in the months to come”. In all the researched countries, the average proportion of persons who had changed jobs in the six months before the poll remained unchanged at 18% (vs. 18.2% May/2011). Neither, there was a change to the index of active job searching which for several editions has been unchanging at 11%. However, in Poland the index was 15% and continues to be at the top among the researched countries. 1 “Mobility Index” is an integral part of the Labour Market Monitor poll – it reflects expectations among employees as to probability of finding a new job within the next 6 months (both in the same character or a completely new job). To start with the calcu lation of the index, an aggregation was made of responses of all respondents in the first international edition (03/2010) which constituted a starting level of 100 points.

From optimism into pragmatism? Despite such situation, there was no change to the ratio of p eople afraid of losing their job. We continue to be one of the most optimistic nations among the researched countries. 80% of Polish res pondents are convinced that could find a job. “Perhaps this good state of mind is partly due not only to inherent optimism but also to increasing flexibility in the labour market. In relation to previous years, more frequently and more willingly we have been taking up jobs that are not related to formal education. We have become more open to other forms of employment. The pragmatism results in fewer problems when looking for a new job and a broader selection of available positions,” – clarifies Agnieszka Bulik. Similarly to the previous poll, almost two out of three Polish res pondents also admitted that they were satisfied with the job they had. In comparison to the other researched countries led by Norway (81% satisfied with their jobs), our position has not changed. In relation to the results of the preceding quarter there was a change in the hierarchy of reasons underlying change of job. There was an increased importance of better working conditions that was behind the change of jobs among almost one half of the respondents (46% vs. 32% May/2011). Changes in the structures of Polish enterprises continue to influence employee fluctuation (32% vs. 33% May/2011). “Increased importance of better working conditions resulting in a decision to change the employer means –hat despite the un favourable situation and related concerns, Poland is quite well off on the map of concerns in Europe. However, for many of us private ambitions and wish for a change keep staying in the background due to external factors like e.g. reorganisation of the company where we are employed. The market environment indicates that Poles will have to accept a pragmatic approach for a long time to come and wait for the luxury of being guided with their own reasons when selecting a job,” - offers Agnieszka Bulik. Gender of the labour market? This edition of the “Labour Market Monitor” also studied the perception of women’s situation in their professional environment. The results indicate obvious gender discrimination in taking recruit ment decisions. Although as many as 52% of Polish respondents declare that correct functioning of a company is r elated to an even

November / December 2011

Who is who in outsourcing? | Articles

gender split, however a group of employees who w ould rather work with males (59%) is much larger than those who would rather work with females (39%). Poland was also first with over 40% of respondents stating that recruitment processes favour men. This is the opinion of 1/3 of female respondents and over one half of male respondents. Only 1/3 of enquired Polish women would rather work with women and only one out of six Polish women are clearly against working among other females. Among the 2/3 that prefer male company at work, as many as one third are clearly in favour of a larger number of males in their working environment. Additionally, almost 2/3 of the questioned Polish women prefer to have a man as manager and for 1/4 the preference is very strong. Research “Labour Market Monitor” by Randstad The Labour Market Monitor is a quarterly poll organised in 29 countries of Europe, Asia, Australia and both Americas (the countries involved in the poll: Netherlands, France, Germany, Luxembourg, Belgium, Denmark, UK, Italy, Norway, Sweden, Switzerland, Greece, Poland, Hungary, Czech Republic, Slovakia, Turkey, Australia, New Zealand, USA, Canada, Mexico, China, Argentina, India, Japan, Singapore, Chile).

November / December 2011

The poll was first conducted at the beginning of 2010. The “Labour Market Monitor” is carried out with questionnaires completed on-line by respondents aged 18 to 64, working mini mum 24 hours a week (with the exception of those who are self-employed). The sample of the researched population is selected by Survey Sampling International. The sample in Poland is 405 respondents (overall 13,565 persons participated in the last poll). The poll was carried out from 18 July to 8 August 2011. Content provided by Randstad

Randstad Sp. z o.o. Al. Jerozolimskie 56c 00-803 Warszawa firma@pl.randstad.com www.randstad.pl

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