More for less
2007-10-31

Getting more music for less money, or, in other words, getting better, more specialized and innovative services cheaper. That’s how the outsourcing could be described. The 3rd Annual Forum of Outsourcing Roadshow provided us with interesting insight on this topic.

M. Korolec (Deputy Minister,
Ministry of Economy),
W. M. Orlowski (Warsaw
University of Technology Business
School/Chief Economic Advisor
PricewaterhouseCoopers Polska),
A. Sienko (Dyrector, Global
Technology Services, IBM Polska).

Witold Orlowski from Warsaw University of Technology Business School and the Chief Economic Advisor of PricewaterhouseCoopers Polska described an interesting example - The medical science is very quickly developing and bringing new impressive solutions for our health and longer life. It is possible to “exchange” your bad leavers, kidney, skin and even your hearth for better and younger one. It is most likely that soon man kind will be able to “exchange” any part of our human body. But how far is it going to get? How long e.g. Joe is going to stay Joe after all these “exchanges” for better and younger “parts”?

And how about the company? It is possible to “exchange” your own accounting, HR or e.g. research processes for better, more specialized, innovative and even cheaper ones when you take advantage of outsourcing. This is also quickly developing segment (USD 10 bil annually in India only), getting however to the same question as with the example above – where is the border for the ABC company to stay ABC company? At both of the cases the last stop should be most likely the brain.

„Poland is the most attractive country for BPO in the CEE region and the 5th one in the world“, Tomasz Sokolowski, partner at HRK informs. The massive migration of Poles mainly to UK and Ireland is actually doing a good promotion of Poland abroad. Foreign employers giving jobs to Poles like their reliability and hard work. Later on they ask themselves when I’m happy with Poles in my home country, why shouldn’t I be happy with Poles working for me in Poland where the labor cost is lower?

However, some Polish cities such as popular Cracow or Wroclaw are already getting bit crowded what results in lack of specialists in these places. But there are still cities with big potential, not much discovered by foreign investors yet. Poznan, Katowice, Gdansk,Torun Lublin or Szczecin which is linked by highway with Berlin are pretty good examples.

Tomasz Sokolowski thinks that HR procedures are changing thanks to the outsourcing too. More and more companies outsource the recruitment procedures, while their own HR departments focuse on keeping and developing their employees. He also advises to enter into cooperation with head hunters just to make sure they won’t “kidnap” your top management. This is possible to do by including the “Hand Off” agreement to the contract.

Managers in Poland are also getting more and more interested in Insourcing, Marta Donhefner-Wojtkiewicz, Executive Search & Business Development Director at "Test" Human Resource Advisory Group informs. Insourcing is a business practice in which work that would otherwise have been contracted out is performed in house. Companies train their existing personnel to perform tasks that would otherwise have been outsourced.

Jerzy Stepien
(Deputy Mayor of Poznan),
Monika Piatkowska
(Director of the Strategy
and City Development
Department in the Municipal
Office of Krakow).

And what do Polish cities do to convince the foreign investors that their city is the best for their BPO centre?

“The investors don’t really care much about the cities, the most important is the country”, Jerzy Stepien, Deputy Mayor of Poznan says. Offers of the cities are very much comparable and only small details decide. Activity of the local authorities may quite influence the investors’ decisions - how much are the local authorities willing to help and support the investors.

“Warsaw doesn’t really compete with other Polish cities, but with other European capitals”, Alicja Zelichowska, Acting Director of Investor Service Department, City of Warsaw thinks. 200.000 m2 of office space is estimated to be build in Warsaw in 2007, another 300.000 m2 is planned to be build next year.

“There are 100 BPOs in Poland, 30 of them in Cracow with 12,000 employees”, Monika Piatkowska, Director of the Strategy and City Development Department in the Municipal Office of Krakow says. “Cracow is called capital of outsourcing services”, she adds. Companies such as e.g. Ahold, Shell, Google, IBM, KPMG or Ernst & Young have already opened their BPO centres there.

Marcin Kaszuba, Partner at Ernst & Young, thinks that Poland is not seen as a location for research or more specialized BPO centres yet. “There is a specialization in education needed, such as IT, technology or banking”.

Last panel brought more information about real estates and facility management.

The market is going to slow down, the boom is going to be over, everything what has its beginning has also its end. Banks will begin to consider whether to give mortgages so easily, reacting on what happened in US. The market of buyers is going to shrink, dr Richard Mbewe, Managing Partner at Atria Real Estate Partners said.

Richard doesn’t believe that so many Poles are going to come back and buy apartments here. The demand will be coming from young Poles working in Poland and from people who already have apartments here and who want to exchange them for bigger ones.

dr Richard Mbewe
(Managing Partner, Atria
Real Estate Partners),
Arkadiusz Urban
(J.W. Construction Holding),
Michal Skalinski (Head of
Property Management,
Cushman&Wakefield).

“Poland went to 2nd league from the 3rd one. Poland needs to differentiate, not only repeat “low cost”. Poland needs to offer ideas how to keep the people here”, he stressed.

As far as for the facility management, Richard sees a gap on the market here. Outsourcing in facility management needs to get specialized - not only e.g. “gardener”, but gardener with school, knowledge and experience, who knows the flowers and trees and who knows how to take care of them, there is no this kind of specialization on the market yet he said.

Arkadiusz Urban from J.W. Construction has different view. “The demand is still too high, there is a lack of 500,000 apartments in Poland. We have opened office in UK to sell Polish apartments there and our clients are mainly Poles investing their earned money.”

“There is no risk in office space”, Jeroen van der Toolen, Managing Director at Ghelamco convinces. “The BPO market has highly influenced the market with office space. Two years ago it was much harder. Office space in regional cities has doubled or tripled within last 3 years. Only 0-5% of the built office space is not rented, when you build a commercial building it is almost right away full. The question is what happens within next 2 years as there is a big number of m2 of office space being built.”

Michal Skalinski, Head of Property Management at Cushman&Wakefield agrees with Richard that specialization in facility management is needed. “Nobody trains people working in the facility management, they don’t have experience with the work and with the communication with their clients. To give an example, some commercial developments are decorated by expensive materials such as marble or expensive metals. Employees of cleaning companies don’t’ usually know how to maintain them.

Everybody knows that the gold fever doesn’t last forever. „Poland may loose its (BPO) ranking in some 5-7 years“, Janusz Jankowiak, Managing Director at arvato services Polska says. Therefore Poland needs to attract investors not interested in low cost labor only. Poland needs BPO centres that are difficult to move away. Otherwise the gold fever may soon move further east and east-south.

Roadshow Polska proved to be success again. The organizer deserves congratulations for a very interesting panels, professional organization and execution of this event, attended and chaired by some leading top executives.

Source: GoWarsaw.eu