Gaining Momentum
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Business Services Sector in Poland Gaining momentum 2016 ABOUT US CONTENTS ThePolishInformaionandForeignInvestmentAgencyisfocusedonsupporing Sector in numbers 4 foreigninvestorswhowishtoconductbusinessaciviiesonthePolishmarket. Introducion 5 TheAgencypromotesPolandasthedesinaionforinvestors,providesbusiness Analysis of the Business Services Sector in Poland 7 locaionadvisoryservices,helpscompaniesattheiniialinvestmentphasesand The Database and the methodology 8 renders atercare services.Agency’s employees also help shaping compeiive Business Services Sector companies – number, size, types 10 investmentincenivespackage. Locaionofthebusinessservicessectorcompanies 12 Maturity of BSS centers 16 Country of origin of Business Services Sector companies 17 IndustriesservedbytheBSScenters 24 Foreignlanguagesinbusinessservicessectorcompanies 26 ThebiggestservicecentersinPoland 28 UntappedPotenial 30 TrendsintheBusinessServicesSector 31 BSSprojectsassistedbyPAIiIZin2015andQ1of2016 37 CompletedprojectsassistedbyPAIiIZ 38 SupportgrantedtoBSScompaniesundergovernmentgrantsschemein2015 41 InvestmentprojectsservicedbyPAIiIZ 42 CasestudyofF5Networksinvestmentproject 46 UniqueSellingPointsofciies-leadersintheraceforBSSinvestments 51 Conclusions 67 2 3 SECTOR IN NUMBERS INTRODUCTION Weareplacinginyourhandsthesecondediionofthereportonthebusinessservicessector (BSS)inPoland.2015markedanotherrecord–theemploymentinBSSexceeded193thousand inover850companies.Theyearfeaturedfurtherdynamicdevelopmentoftheindustrythanks 193 500 Total employment in BSS tobothnewinvestmentsthatwerelocatedlargelyinmanyPolishciies,aswellastheconsistent employmentgrowthwithinexisingcenters.Thesectorisontherisefromtheperspeciveofits sizemeasuredbythegrowingquanityofdiferenttypesofcentersandtheincreaseinnewjob openings.BSShasalsobeenchangingintermsofthequalityofdeliveredservicesanditsgradual 227 Average employment in BSS center disseminaionacrossthecountry.TheimportanceofthebusinessservicesindustryforthePolish economycannotbeoverlookedbecauseofitsinluenceonthelabormarket.Infact,thesector hasbecomeoneofthelargestemployersinthecountry.Theimpactontheemploymentofthe Total number of best-educatedstafprovidingthemwithstable,high-incomejobshasneverbeenclearer.However, 1 454 000 academic students in 2015 whatthesectoroferstopotenialemployeesgoesfarbeyondtheregularpermanentemployment contractorsalaryabovethenaionalaverage.Aclearcareerpathandgreatopportuniiesforfur- therdevelopmentareinvolved,too. Number of languages in which 40 services are provided This report consists of four parts. The irst is an analysis of BSS companies appearing in the Database—bothofPolishandforeignshareholding—operainginourcountry.Inthesecondpartof thedocument,wehavemadeanatempttocharacterizethemaintrendsobservedintheindustry inaverybroadsense,takingintoaccountinparicularthreeaspects:changeintheexisingmodels of the setup of centers as a response to global trends; the impact of companies from the sector on 852 Business Services Centers thelabormarketandrealestatesector,aswellasinvolvementoftheindustryinotherimportant iniiaivesofsocialandeducaionaldimensions.Thethirdchapterofthereportisasummaryof thesectorfromtheperspeciveofinvestmentprojectssupportedbythePolishInformaionand Polish ciies with total Foreign InvestmentAgency (PAIiIZ). BSS investments assisted by theAgency represent almost 7 employment in BSS of 10 000+ halfofallcompletedprojects.Inthissecionyouwillalsoindinformaionaboutcompaniesthat applied for grants under the government Programme for supporing investments of major importance to the Polish economy for years 2011–2020.Thelastpartofthereporthasbeenhandedovertoour Total number of regionalpartnerswhowereinvolvedintheacquisiionandservicingofBSSinvestments.Thesyn- 1 701 groups of processes handled theicsummarypresentscomparabledatamostrelevanttoinvestorsontheciiesthatwerethe mostsuccessfulinatracingBSSprojects.TheemploymentinBSScenterslocatedinsevenmajor ciiesaccountsforalmost90%ofalltheemployeesintheindustry.Eachcityalsohadtheopportu- 36 Centers with employment 1 000+ nitytohighlightitsuniquesellingpointthatmakesitstandoutcomparedtootherlocaions. 4 5 ANALYSIS OF THE BUSINESS SERVICES SECTOR IN POLAND THE DATABASE AND THE METHODOLOGY AllanalysescoveredinthischapterwerepreparedbasedontheDatabasecovering852centers Moreover,whileupdaingtheDatabase,thefollowingmethodologicalassumpionswereadopted: with foreign and Polish shareholding. The total employment in all companies included in the Database amounts toalmost 193.5thousand employees.The Database comprises informaion • eachnewcenterofthesamecompanyinanotherlocaionisconsideredasaseparaterecord in the Database, validasoftheendof2015. • theDatabaseofcompaniesdoesnottakeintoaccountSSCandBPOcentersthatprovide Justlikelastyear,theupdateoftheDatabasewasenabledbytheinvaluablecontribuionofour servicesonlyinPolishtothecustomersoperainginPoland.Thisappliesparicularlytocen- regionalpartners:investors’servicingunitsinciieshosingBSSprojects,associaionsandinsi- tersestablishedbyinancialinsituionssuchasbanksorinsurancecompanies.Thecriterion tuionsrepreseningthesector—Aspire,BizPoland,ProProgressio,ABSL,andHRagencies—Hays, isnotrelevanttoITandR&Dcenters,typicallydealingwithsotwaredevelopment.This kindofprocess,asarule,requiresthecreaionofa‘product’inEnglish, Antal,AGtest,Randstad.ThedatawerealsogatheredbyPAIiIZrepresentaivesthroughdirect interviewswithinvestorsduringpost-investmentcare.Inordertohaveascompleteapictureof • BPOcategoryalsoinvolves,apartfromtheback-oicefuncions,thefollowingtypesof thesectoraspossible,thenumberofpartnerswhohavesupportedPAIiIZinthecollecionand centersoferingservicestoexternalclients:callcenter,contactcenterandcustomerservice, veriicaionofdatahasincreasedsigniicantlyincomparisonto2014.Thishashelpedtogainmuch • ITcenterisanenityprovidingoutsourcingservicesinIT(system,applicaions,infrastruc- moreaccuratedataontheindustryintermsofnewbusinessesthatappearedonthemarketin turemaintenance,technicalsupport),creaingandselling(implemening)sotwareforexter- 2015andthegrowthinexisingcenters.Ithasalsoenabledustoidenifycompaniesthat‘fellof nalclients.OneofitsmainlinesofbusinessisInformaionTechnologyOutsourcing(ITO) theradar’lastyearandthuswerenotincludedintheDatabase.Consequently,basedonasimple services, comparisonofthelastandcurrentyears’data,itwouldbediicult,ifnotimpossible,toprecisely • therefore, the category of IT centers addiionally includes large Polish providers of both assessthegrowthofthesector.Nevertheless,onthebasisoftheiguresregardingnewcomerson implementaion/integraionservicesandsotwaredevelopers.Sinceitisalmostimpossible themarketlastyearandemploymentgrowthincompaniesthatwerealreadyintheDatabase,it toextractthesotwaredevelopmentunitfromthewholecompany,totalemploymentwas waspossibletoesimatetheBSSevoluionintheyear2015. shownastheITcategory,despitesomeofthembelongingtoR&D, • theDatabaseconsistsofcentersemployingmorethan25people.Theruledoesnotapply Companies described in the Database have been divided into four main categories in terms of to companies that are in the process of establishing centers and that foresee employment servicesprovided: higherthan25people.ThiscriteriondoesnotapplytoR&DandITcenters. • BusinessProcessOutsourcing(BPO)vendorsandthirdpartyprovidersofservicesforexter- nalclients,mainlyininanceandaccouning,customerservice,humanresources(HR)and payrollservices,andback-oicesupportrelatedtotheprocurementprocess; • InformaionTechnology(IT)vendorsandprovidersofITservicesforexternalclients(domes- ic and foreign) - IT outsourcing of hardware, infrastructure, sotware maintenance and development,implementaionandintegraionofsystems,includingsotwaredevelopment centerswhichalsosell/integratethesotware; • SharedServicesCenters(SSC)–capiveSSCsoperaingwithinonecorporaionandprovid- ingservicestocorporatebranchesacrossaspeciicregion(Europe,EMEA,global)mainlyin thefollowingareas:inanceandaccouning(F&A),HR,procurement,ITsupport,markeing, internalclients’needs.Thiscategoryaddiionallyincludesoperaionscentersfacingcorpo- rateclientsindirectlyanddirectly(mid-oiceandfrontdeskfuncions); • ResearchandDevelopment(R&D)–companiesconducingresearchaciviiesandproduct development,aswellasdevelopmentofapplicaionsandsotware;thiscategoryincludes internaldepartmentsofcompanieswhoseprincipalacivityisnotbasedonsalesofsotware. 8 9 BUSINESS SERVICES SECTOR COMPANIES – NUMBER, SIZE, TYPES Attheendof2015therewere852businessservicescentersacrossPoland.Amongthoseeniies, enterprises(Nokia,Intel,GEEDC,Motorola,Samsung),whichsettheaverageat235employees. thelargestcategorywasITsiteswithashareof43%,or368centers.ThesecondplacewenttoSSC Asexpected,thesizeofBPOsisthegreatest,with334employees. witha28%share,or238centers,andthirdplacewastakenbyBPOproviderswitha16%share,or 133centers.R&Dmadeupthesmallestcategorywitha13%share,or113centers. Figure2. AverageemploymentinasingleBSSenterprisebytypesofcentersin2015. Ifweconsiderthenumberofemployeesworkinginparicularcentertypes,thelandscapeofthe sectorchanges.Asoftheendof2015,therewere193.5thousandpeopleemployedinthebusi- nessservicessector.SSCsemployedthelargestworkforce,providingjobstoover63thousand people, which represents 33% of the total employment in the sector. IT eniies were ranked second,employingalmost59thousandpeopleaccouningfor30%ofoverallemploymentinthe industry.BPOswererankedthirdwithover44thousandemployees,whichis23%oftheenire AVERAGE BSSworkforce.TheR&Dsiteswerethesmallestcategoryagainwith26.6thousandemployees, 334 227 consituing14%oftotalemployment. 268 235 160 Figure1. Employmentandnumberofcentersbrokendownbytheirtype.