Outsourcing&More - issue 5 (july-august 2012) by Pro Progressio

nr 4 (5)

July / August 2012 (bi-monthly magazine)

issn 2083-8867

Editorial note Dear Readers, Free of charge magazine Editor-in-chief Dymitr Doktór d.doktor@outsourcingandmore.pl Art./DTP Jacek Cieśliński Mateusz Budzisz Cover Jacek Cieśliński 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. Selected photos come from Fotolia.pl website. Circulation: 3000 copies

This time we invite you to the heart of Poland, to Łódź – it has been the most dynamically developing location for outsourcing indu stry in recent years. Five years ago, the outsourcing industry in Łódź was repre sented by several organizations, but in the year 2012, it is already a well- developed market, including both domestic and international actors. The companies that conduct their business here include: Fujitsu, Xerox, City, Infosys, SouthWestern, but also Transition Technologies, Tate&Lale, Nycomed and many others. For the first time, we asked the local entrepre neurs to present their companies; at our request, some of them sent us the main information about their activities, which you can find on pages 21-30. We experienced great kindness and a very open approach to outsourcing services in Łódź. The Mayor of the city, Ms. Hanna Zdanowska, agreed to give us an interview in which she ensures that “Łódź is an ideal place for such services to develop, mostly because of its location in the direct vicinity of the capital, its role as an academic centre and s uccessful cooperation of higher education institutions with the business sector.” We managed to collect comprehensive information about the city, Special Economy Zone, education, the real estate market, as well as the telecommunications market – Rafał Rodziewicz, the CEO of T echnitel Polska, member of Business Centre Club collected data concerning the services and telecommunications infrastructure, which resulted in the development of a transparent report. We continue our cycle of presenting various forms of outsourcing. In this issue we present the Car Fleet Management industry. By courtesy of the Polish Vehicle Rental and Leasing Association, as well as Cartrack P olska and Fracht companies, the subject of outsourcing in the automotive world has been thoroughly presented. From now on, the subject-matter of the issue will be presented as a separate section so as to give the readers the best understanding and description of the issue discussed. I hope that the form accepted by us will appeal to you. In September we will arrive to Poznań and we will focus on CRM, Call and Contact Centre industry. We will also be present at many c onferences in September and October, including SSON Conference in Prague, ABSL Conference in Sopot, the 7th Polish Outsourcing Forum in Warsaw, 9th International Outsourcing Forum in Sopot, Call Centre Awards and the 8th edition of Kongres Contact Cener (Congress Contact Cener).

Enjoy the magazine, Dymitr Doktór Chief Editor

July / August 2012

Index 21

Interview with Hanna Zdanowska, President of Lodz

Poland vs Outsourcing

Business Process Outsourcing in Lodz

Outsourcing & More

Łódź – a City of Opportunities

„The Lodz is the perfect place for the development of outsourcing services” – Interview with Hanna Zdanowska, President of Lodz

New investments, new destinations – the Lodz Wladyslaw Reymont Airport

Interview with Justyna Ciumaszko, Investor Relations Manager

News

Important Dates

Zgierz – why is it worthwhile?

Regions write a new chapter

Lodz Special Economic Zone – Fashion Zone!

BPO & ITO in Germany – Market, Models, Initiatives

Łódź office market

Business Process Outsourcing in Lodz

Łódź Regional Park of Science and Technology

Telecommunications networks in Łódzkie voivodeship

Centre of New Media

The New Center of Łódź

Join us on Facebook - www.facebook.com/outsourcingandmore 6

July / August 2012

CAR FLEET MANAGEMENT

Main Topic

Krystian Bestry – interview with European Delivery Head Infosys BPO Europe

Education vs Outsourcing 77

“Youth in Łódź” Programme. Breadth of opportunities!

Human Capital of the Łódzkie Region

University of Lodz for Employers

International Model of Higher Education

English for specific purposes - a necessity or fashion

Who is who in outsourcing 12 31

VIIth edition of Polish Outsourcing Forum – interview with Eva Aboo Krystian Bestry – interview with European Delivery Head Infosys BPO Europe

Modernity and comfort, i.e. FSL

Full service leasing

When do vehicle rental services pay off and what are their variants?

TCO – total cost of ownership of fleet

The methods of reducing the cost of the fleet.

How can outsourcing reduce the cost of the fleet?

Interview with Radosław Grzela, Commercial Director of Arval Service Lease Poland Sp. z o.o.

100

Interview with Marta Bielecka-Gozdek, Commercial Director MSP, Alphabet Poland Fleet Management

101

Interview with Arturem Sulewskim, Commercial Director at LeasePlan Fleet Management

103

Leaseback – how to reclaim frozen money?

104

Methods of remarketing vehicles after long-term rental

106

Long-term rental of trucks

107

How often and for what reasons are fleets of trucks replaced?

108

Motor transport, current situation and short-term forecasts

110 Interview with Bartłomiej Dębski, Chief Executive Officer of Cartrack Polska

July / August 2012

Outsourcing & More | News

News MACIEJ KOZICKI

8 Poznań – based companies have established the Upright Group Upright Group is a new entity on the market, offering comprehensive outsourcing solutions (BPO). It is comprised of 8 Poznań-based companies that render their services throughout Poland. In total, the companies of the Upright Group employ about 300 permanent workers and cooperate with about 8,000 people a month all over the country. The most experienced member-companies have been operating on the market for 16 years already. Combining the companies under a single brand will make it possible to offer comprehensive outsourcing services to the Group’s clients, which will be rendered by a single entity. The member-companies of the Group are: PMT Marketing System, Grupa Job, Branch Brothers, Inventory Solutions, S&P Partners, Ratium, RTM and Merchandising Team. Ever since the beginning of their operations, the management teams of said companies included persons, who now con stitute the board of directors of the Upright Group: Piotr Buczyk, Maciej Kozicki and Tomasz Matuszewski. During the years of their operation the companies implemented hundreds of projects in cooperation with some of the largest brands in the fields of FMCG, services, commerce, manu facturing, banking and telecommunications; among others: Bakoma, Carlsberg Polska, H&M Hennes&Mauritz Logistics, Hipermarket/Supermarket Tesco Polska, Kuehne + Nagel Poland, L’Oreal Polska, Nestle Polska, Orange, PKO Bank Polski. Carrying out varied projects makes it necessary to ensure cooperation between companies whose offers are comple mentary to each other. This is why the decision to establish the Upright Group was the natural route to take; it is the next stage in the development of the companies involved. This solution will make it possible to provide the customers with attractive outsourcing services rendered jointly by selected companies. – We can successfully utilize the fact that our companies have been cooperating for a while now, in order to prepare an even more comprehensive offer for our clients. Joint execution of projects by several teams simultaneously has led us to work out an optimal model of cooperation between the companies. Now we are more efficient in the implementation and execution of even the most complex projects – says Maciej Kozicki, a member of the Upright Group’s board of directors. An important advantage of the

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member of the Upright Group’s board of directors

Upright Group is the fact that the entity was not established by taking over independent companies, but rather came to life as a joint effort of entities which were already related business-wise, and whose teams got to know each other and have proven to work well together. This is why an impor tant characteristic of the Group’s companies is their organic growth and a stable basis of operations which stems from a unified management culture. The outsourcing industry is in a state of dynamic develop ment. A particularly noticeable trend is to combine services that are complementary to each other, which enables their recipients to focus on the main area of a company’s opera tions and to optimize costs. The needs of the market de termine the necessity to develop effective solutions in order to meet the changing demands of the customers during different stages of execution of their projects. – W orking with the Upright G roup will allow the customers to, for example, design their own commercial facility from the ground up, taking into account the rules of merchandising, visual m erchandising and customer experience. After imple menting the design we will be able to provide comprehensive merchandising, stocktaking, promotional, advisory and HR services – explains M aciej Kozicki. Apart from the described areas of operation, the Upright Group also offers services related to trade marketing, HR issues, temporary employment, creating positive customer experiences in the points of sale of services and products, organization of conferences and events, digital signage, as well as accounting and personnel-related services. For more information go to www.uprightgroup.pl Source: Upright Group

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Outsourcing & More | News

Business in education – creative SGH Warsaw School of Economics (SGH), the oldest economic university, invites to cooperation all companies which want to invest in its market and personnel development. SGH business partners are able to give the material and substantial support to strengthen our leading position as a business and economic university in Poland. Companies that have decided to cooperate with Warsaw School of Economics enrich our didactic offer within the subjects conducted in the study program jointly with SGH lecturers and have the opportunity to organize meetings with students in the form of seminars, conferences and workshops. As a result of permanent companies presence at the SGH and their numerous image campaigns, students easily recognize their future employers, as well as companies are memorized for a long duration of our graduates careers. In order to implement wider cooperation with companies there was founded in 1998 SGH Partner Club (www.sgh. waw.pl/bwb) as a common initiative of Polish and international companies, which includes: Ernst&Young, Deloitte, Schenker, L’Oreal, Firma Roleski, McKinsey and Company, Bank PKO BP, Procter &Gamble, MasterCard, TP SA, KPMG and Bank Pekao SA. In 2010, the SGH Corporate Advisory Board was established. The main task of the Board is advising the SGH Rector on matters of strategic directions of SGH development, streng then its position on international education market and buil ding the scientific and research network between SGH and business.

Please visit our website: www.sgh.waw.pl/bwb To get more information on cooperation, please contact the Office of Corporate Relations business.cooperation@sgh.waw.pl tel. +48 22 564 9626.

Author: Urszula Siama Office of Corporate Relations SGH

Call Center Awards - a prestigious award! What is Call Center Awards and what is the idea of the competition? It is the event for Call Center organizations, Call Center Departments and Managers, designed to honor, introduce and promote best practices, but also to build prestige and professionalism of the industry. Honors are awarded in two categories: Call Center Manager and Call Center Team. Can anyone take part in the Call Center Awards? Competition is conducted in an open formula. All p rivate companies, public institutions and all those who represent the call center industry are invited. Involving both large corporations, small and medium enterprises with internal call centers, as well as companies providing outsourcing services in this area. Is winning the competition Call Center Awards brings real benefits? The best evaluation give the winners of previous edition: (...) The award has made sure all that we are professio nals and that each of us is on the right way to success working with the Pharma Distribution Group - Ireneusz Pankiewicz, Pharma Distribution Group. (...) The award is a confirmation of the fact that BEST is a creative, rapidly developing company investing in innovative solutions - Mariusz Gryglicki, BEST SA. Participate in Call Center Awards Gala. Register today on www.iir.pl/EA0020 Contact: Rafał Szary Project Manager Institute for International Research Sp. z o.o. tel.: 22 420 55 21 e-mail: rafal.szary@iir.pl www.callcenterawards.pl

Source: Institute for International Research Sp. z o.o

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July / August 2012

Outsourcing & More | Important Dates

25.07.2012 Warsaw

23.08.2012 Poznań

29.08.2012 Warsaw

30.08.2012 Warsaw

10.09.2012 Sopot

16.09.2012 Prague

20.09.2012 Warsaw

24.09.2012 Warsaw

Elektroniczny Obieg Informacji w Firmie GigaCon 2011

Organizer: GigaCon Location: Warsaw (Poland)

Outsourcing IT GigaCon

Organizer: GigaCon Location: Poznań (Poland)

Efektywne zarządzanie przedsiębiorstwem z wykorzystaniem systemów ERP

Organizer: MultiTrain Sp. z o.o. Location: Warsaw (Poland)

New-Tech GigaCon Nowoczesne Technologie w Firmie

Organizer: GigaCon Location: Warsaw (Poland)

III Konferencja Związku Liderów Sektora Usług Biznesowych w Polsce (ABSL).

Organizer: ABSL Location: Sopot (Poland)

6th Shared Services and Outsourcing Exchange

Organizer: SSON Location: Prague (Czech)

VII Forum Outsourcingu - Polska najszybciej rosnącym rynkiem outsourcingu w Europie

Organizer: ROADSHOW POLSKA Sp. z o.o. Location: Warsaw (Poland)

Kongres Contact Cener VIII

Organizer: nowoczesnafirma Location: Warsaw (Poland)

July / August 2012

Outsourcing & More | News

July / August 2012

Who is who in outsourcing? | Interview

VIIth edition of Polish Outsourcing Forum – interview with Eva Aboo Millennium, Cushman & Wakefield, Hays, SWS BPO, Bosch- Siemens, Fraikin, Baker & McKenzie, PWC, Ernst & Young, Kruk S.A. This year our main partner is ASPIRE – the biggest outsour cing, IT and shared service organization in Poland since 2009. We have selected two very interesting leading themes. The first one is: how can outsourcing contribute to the impro vement of services in public sector? We will answer the question whether the Polish public sector is ready to take full advantage of support from external specialists as is the case in e.g. Ireland or New Zealand, whether the years to come will bring significant increase of interest in outsourcing services from state institutions. The next big topic is Indian business model. Why have Indian companies chosen Poland and Europe? How does it work in India? The biggest Indian companies present in Poland are invited to participate in that part. We will try to explain the specificity of those companies, their objectives and reach, activity model and answer the following question: why has the country located in Central Europe been chosen as the territory of their investment acti vities? Those topics will be prepared in strict cooperation with Indo Polish Chamber (IPCCI), ASPIRE, Polish Information and Foreign Investment Agency, with expert’s support from PWC. The names of honorary guests this year will be specified in July. Outsourcing&More: Eva, this is already VIIth edition of Polish Outsourcing Forum organized by Roadshow Polska in Poland, what only confirms there is a strong demand for discussions concerning outsourcing industry and best prac tices in our country. What will be different this year compa ring to previous editions of your conferences? Eva Aboo: During previous editions of the Forum we coo perated with e.g. ABSL (Association of Business Service Leaders in Poland), Outsourcing Institute, Polish Information and Foreign Investment Agency, Forbes and Business Week. For many years we have been cooperating with and sup ported by the National Chamber of Commerce, M inistry of Economy, towns and cities such as Kraków, S zczecin, Opole, Bydgoszcz, Łódź, Lublin, Poznań, Wrocław or Gdańsk. We had pleasure to host such honorary guests as Danuta H übner, Michał Boni, Dariusz Rosati, Andrzej Olechowski, Kazimierz Marcinkiewicz, Rafał Baniak, S ławomir Majman. The com panies that sponsored our events include e.g. IBM, HP, Bank

July / August 2012

O&M: Within last few years some new outsourcing confe rences were organized. What differentiates Outsourcing Forum from the other events? EA: That is true that during last two years more outsourcing events were organized. The above means that the outsour cing topic in Poland is trendy now, up-to-date and both service providers and buyers show interest in it. Organizers of meetings, conferences, speeches provide knowledge to various audience and on various topics. Some events are organized locally and some are regional and national events. I am pleased that Roadshow Polska is a pioneer of outsour cing events and that we initiated nationwide trend to share knowledge about that sector. Polish Outsourcing Forum is an event which focuses on the outsourcing topic from various perspectives and gathers representatives of all most important sectors interested in

Who is who in outsourcing? | News

July / August 2012

Who is who in outsourcing? | Interview

the sector development in Poland, public sector, leading industrial organizations representing the business service sector, companies actively acting for the sector, including companies providing a wide range of services in v arious indu stries and in Shared Service Center and Business P rocess Outsourcing, international corporations, university environ ment and the most important media (including professional media). I w ould like to add that our main media partners are Outsourcing&More – leading professional magazine and Forbes. O&M: We already got used to the fact, the Public Sector repre sentatives are present on your conferences. Those are representatives of cities, local councils but also polish government. Is polish public sector really interested in out sourcing including BPO/SSC and R&D investments? Who we may expect to meet on your September’s event? EA: We have invited representatives of government and local governments (of the highest rank); of course also the repre sentatives of the Polish Information and Foreign Investment Agency will be present. The public sector should approach the outsourcing issue from two perspectives. It should w idely support and outsource processes which could contribute, due to their effectiveness, to reduction of public costs, thus increasing the employment in processional business service sector. As we all know the incentives offered in P oland cover e.g. government subsidies, structural funds and incen tives in special economic zones. However, investors still see a lot of difficulties such as too demanding criteria related to applying for support (in particular, for projects in B+R sector), too complicated procedures for obtai ning the support, limited budget, poor availability of information of compe titions, exceeding deadlines for evaluation, bureaucratic me thod of subsidy settlement etc. We will have a chance to discuss all those issued and take a look at positive changes which could be introduced in the nearest future. O&M: With the public sector there are strongly connected initiatives and projects based on Private Public Partnership concept. PPP has some great examples in United Kingdom. Would the representatives of British Polish Chamber of Commerce, who are also Partners of this year’s edition of Outsourcing Forum, share their comments concerning PPP, or perhaps other invited speakers are going to discuss this subject? EA: PPP, a solution which is applied very often in the European Union and worldwide, becomes more and more popular in Poland as well. Considering the permanent lack of public funds, the p ublic private partnership allows for implementation of many

July / August 2012

rojects which would probably fail to be completed in the p years to come, should PPP be unavailable. Also Euro 2012 contributes to the increase of interest in PPP formula as that event has become a kind of catalyst for investment processes in Poland. That is why I believe it is important that the solution is promoted following the example of those countries where that formula proved successful. We invited representatives of public sector, PWC, Capita (one of 100 biggest London Stock Exchange companies, which is also the biggest outsourcing company in the UK) to discuss the topic and representatives of the British Polish Chamber so that they could share their experience. O&M: Poland is definitely taking the leader position in Europe in the area of new BPO investments. Last year the number of operating centers exceeded 300 locations, the employ ment is either almost or already over 100.000 employees. Such dynamically growing industry requires well educated staff – will representatives of the Universities, Collages or perhaps even students find something interesting on this year’s Forum?

Who is who in outsourcing? | Interview

O&M: If we take a look on polish outsourcing market, most of the service providers are focused on offshoring model. The main group of operations centers are servicing com panies and organizations who are not present and not run their businesses in Poland. Polish managers should have the possibility to get easier access to information and knowledge concerning outsourcing, sourcing and ways to cooperate with external partners. Is the theory of sourcing within your agenda? Or perhaps the attendees will be able to get familiar with risks of moving into outsourcing model? EA: As I mentioned before, our Forum focuses on a very wide range of topics discussed, also due to our audience. „Offshoring” investments, although they focus on dealing with external entities, have an important share in the invest ments and significant impact on employment in the business service sector in our country. That is why, as we wish to participate actively in outsourcing education, we cannot omit that topic. We also want to discuss problems which may occur when implementing processes and risks related to outsourcing, even more because other conferences usually focus on positive aspects of outsourcing. O&M: Outsourcing is mainly present in large corporations, and what about small and medium enterprises – should the SME representatives come to the Forum this year? EA: Absolutely, and in particular those SME sector com panies which would like to invest in further development while taking care of their professionalism and cost effecti veness. More and more entrepreneurs take advantage of various forms of outsourcing and majority of them has bigger opportunity to develop cooperation with outsourcing service providers.

EA: This year, for the first time, we make sure that Polish universities and students are strongly involved in our Forum. We wish to contribute to education of future employees in service sector and enable students to meet future e mployers. Under our new initiative, by initiating cooperation with Polish universities educating students at outsourcing faculties, we decided to finance the participation of 10 Polish students proposed by the universities in our Forum. We will also try to obtain co-financing for larger number of students from local governments and companies searching for new employees. Subsequent editions of the Polish Outsourcing F orum are planned to cover “mini-fairs”, meetings of students with recruitment companies and directly with companies ope rating in the sector. We cooperate with such universities as Warsaw School of Economics (SGH), University of Szczecin, University of Łódź, University of Gdańsk and Cracow University of Economics.

O&M: If you could in one sentence invite the attendees to the VIIth Outsourcing Forum – what would it be? EA: It is no accident that the Polish Outsourcing Forum is the only event in the market, organized each year in the capital city and with the longest, seven-year tradition, which has become an integral part of the most important annual meetings of companies from outsourcing sector. The Forum organized in Hyatt hotel in Warsaw on 20 September will be another opportunity to talk about outsourcing. O&M: Thank you very much for your time and interesting interview. We also invite anyone interested in outsourcing to attend the VIIth Polish Outsourcing Forum, which is organized in Warsaw Hyatt Hotel on September 20th. O utsourcing&More is the main media partner of this most important and biggest outsourcing event organized in Poland. ▄▀

July / August 2012

Outsourcing & More | Articles

Regions write a new chapter The Polish business services sector is always alert to the trends that appear on the global outsourcing market. This year, in April, the biggest business services investment centers undertook the ABSL Regional Chapters initiative. The idea behind this project is to shift the emphasis from a national to a regional scale and improve the investment climate of individual regions. ABSL Regional Chapters is not only about discussions, but also cooperation with local authorities and universities, workshops, conferences and cities’ promotion outside Poland.

ultimately results in enhancing the dynamics of the entire sector’s growth. A good example of such initiatives is the Polish Zone set up at the Shared Services & Outsourcing Week Conference, held in May in Amsterdam. The Zone was created by the leading agglomerations of Lodz, Poznan, Katowice and Tri-city in cooperation with P AIiIZ and ABSL, and dedicated to the promotion of individual cities as mature outsourcing destinations.

So far, Regional Chapter meetings have taken place in Lodz, Krakow, Poznan, Katowice, Tri-city and Wroclaw. These six centers together account for almost three quarters of the business services sector employment in Poland. One of the most fruitful of the meetings turned out to be the event in Lodz, hosted by Agnieszka Jackowska, Center Head Infosys BPO Poland, leader of ABSL Regional Chapter Lodz. Today, Lodz attracts investors with its central geographic location and good infrastructure. Most importantly however, as a major academic center, it offers access to a qualified work force, especially IT graduates. Currently 37 centers employing 7,700 specialists operate here. - At the moment, our city is among the leaders in terms of employment in the business service centers. It is here that big corporations locate their units, which on average employ hundreds of specialists – explains Agnieszka J ackowska – We are glad that just like in other Polish cities, we will be building ABSL local structures together with other investors in Lodz. The exchange of knowledge and experience is espe cially important in our sector – she adds. Regions take initiative Polish cities’ brands ABSL Regional Chapters is in answer to the dynamic changes taking place on the global business services map. One such change is the shifting of competitive focus from countries to cities and regions. As a consequence, the importance of the central authorities’ role in the foreign investment strategy is gradually diminishing. At the moment, the process of invest ment attraction is being handled on a city level rather than a national one. This kind of decentralization helps boost the competitive advantage of particular agglomerations. More over, the involvement of local authorities and organizations in foreign investment strategy facilitates the identification of key areas that require improvement in particular regions. This

July / August 2012

Decentralization also manifests itself in the trend of locating more than one center of the same company in different regions. This solution has been chosen by among others Capgemini, IBM or Geoban. It allows the investors to res pond to clients’ needs in an even more extensive manner by taking advantage of the assets of particular locations. This is especially relevant as particular locations are increasingly moving towards specialization in terms of delivered services. According to the ABSL Report, Warsaw and Poznan spe cialize in finance and accounting (F&A) services, Krakow in IT, as well as in F&A, Katowice in customer service, HR and

Outsourcing & More | Articles

IT, and Tri-city in R&D (Research & Development) and IT. This kind of specialization is related to the regional availability of specialists in a given field, as well as to the profile of aca demic centers - for example Krakow has the biggest number of technical university graduates, while in Warsaw there is the largest number of Economics graduates. Geographic location and historic factors in turn influence the availability of the workforce with a competence in a given foreign lan guage. This factor determined the choice of the location for the new Capgemini office in Opole, which is also the fifth unit of the company in Poland. After a careful analysis of po tential locations’ resources, it appeared that Opole was the city that could most fully answer the company’s demand for staff with German language competence. The opening of the center is also an indication of yet another trend – investors are more and more willing to locate their centers in smaller cities. Setting up new units by companies already operating in the country demonstrates that the representatives of inter national business feel comfortable in Poland. Today, in the global business services sector we can increa singly observe the glocalization phenomenon – from the global sector’s development, through the national o ffshoring markets’ growth, to the development of sub-brands of cities and regions. According to the FDI Intelligence Report European Cities and Regions of the Future 2012/2013, Polish regions have succeeded in building strong brands, which are already recognized by investors. The research has exa mined the potential of 253 cities and 110 regions in attracting foreign direct investment. Among the a nalyzed factors were:

eco nomic potential, human resources, cost effec tiveness, quality of life, infrastructure and business friendliness. P olish cities have been ranked especially high in the Foreign D irect Investment strategy category. The Eastern Europe Top 10 in this category included five Polish locations: K atowice, Krakow, Lublin, Warsaw and Poznan. What makes the success even greater is the fact that, in the previous edition of the research Polish cities were ranked outside the top five. Centers want to cooperate with their environment All this contributes to the fact that investors more often acknowledge the benefits of cooperation on a local level. Already the meetings initiating ABSL Regional Chapters in the six leading investment centers in Poland, have drawn a large number of participants. Representatives of 80 per cent of centers from the sector attended the events. The meetings did not necessarily take on a form of a debate – in Capgemini’s K rakow office, for example, a workshop was held for the Shared Service Centers representatives. The workshop was dedicated to best practice exchange in the area of service excellence. According to the new edition of the ABSL Report, the coo peration between business service centers and their environ ment is one of the investors’ priorities. More than 80 percent of centers analyzed in this edition of the research declared cooperation with local authorities, including indirect commu nication via industry organizations and chambers of com merce. What is important is that in the vast majority of cases

July / August 2012

Outsourcing & More | Articles

such cooperation was assessed positively. The city which scored higher in terms of cooperation between the autho rities and service centers was Wroclaw while Lodz ranked second. Companies from the business services sector embrace the fact that close cooperation and the exchange of experience boosts the effectiveness of actions taken to influence the introduction of changes beneficial to the inve stors. This is crucial, especially in the light of the fact that, according to the ABSL Report, investors still recognize that there is room for improvement when it comes to coope rating with the authorities. One such issue which is e ssential for the development of the sector, is that the authorities take on a more pro-active role as an intermediary between universities and the companies. During the meeting initiating the Wroclaw edition of Regional Chapters, one of the major discussion points turned out to be the local investor’s development plans, which will result in an increased demand for qualified workforce. - This means that thanks to the common promotion and recruitment initiatives of the Wroclaw Agglomeration Deve lopment Agency, the City Council, the universities, and the investors, Wroclaw can build a European brand of a busi ness-friendly city, which constitutes an alternative to Prague, Budapest or Krakow – says Agnieszka Orłowska, Managing Director at HP Wroclaw Global Business Center, leader of ABSL Wroclaw – We want to focus on cooperation with local authorities and universities, and the exchange of knowledge and experience.

the country, can contribute substantially to the further deve lopment of P oland as a „green island” on the map of Europe. -The goal of ABSL’s project is to strengthen the image of Poland as not only the best European but one of the leading global destinations for the business services sector invest ment. According to Hackett Group, Poland has become the industry’s most popular location on the ‚Old Continent’ and is ranked third on the list of the world’s potential off shoring locations, right behind India and China. This is our moment now and we should make good use of it – sums up Jacek Levernes, President of ABSL, Member of Executive Management Board of HP Europe, Middle East and A frica (EMEA), Vice President of HP Global Business Services EMEA. ▄▀ About ABSL The Association of Business Service Leaders in Poland (ABSL) is a leading organization representing the busi ness services sector in Poland. ABSL was founded on the 21st of May 2009, on the initiative of the biggest companies representing the business ser vices sector, including Capgemini, Hewlett – Packard, IBM, Infosys, T homson Reuters, UBS and many others. ABSL is a platform to exchange knowledge, expe rience and best practices between sector players. The Association’s partners are the leading Polish and European s ector’s organizations. ABSL also cooperates with the M inistry of Economy and Polish Information and Foreign Investment Agency (PAIiIZ), representatives of cities and regions as well as local agencies supporting foreign investment. ABSL Members include companies which conduct business in the area of Shared Services Center (SSC), Business P rocess Outsourcing (BPO), Infor mation T echnology Outsourcing (ITO), Research and Development (R&D) and companies contributing to the sector’s growth. Currently, ABSL associates 55 companies representing the sector and more than 200 C – level managers from 15 Polish cities. Companies associated in ABSL account for40% of sector’s employ ment in P oland. More information: www.absl.pl

A common goal Investors’ involvement in non-profit projects, shows that companies operating on the Polish market are willing to en gage in initiatives, whose reach is wider than that of a single organi zation. ABSL Regional Chapters presents the busi ness services s ector’s organizations with an opportunity to take common action in order to improve the P olish regions’ investment attractiveness, which will eventually result in the growth of the sector as a whole. Thanks to this scheme, inve stors who d ecided to expand the range of their operations in

July / August 2012

Author: Tomasz Podolak ABSL

Outsourcing & More | Articles

BPO & ITO in Germany – Market, Models, Initiatives After Pierre Audoin Consultants (PAC) in Munich, the German market for business process services (BPO) will reach an esti mated volume of EUR 3.6 billion by 2015. The BPO industry has herewith an estimated yearly growth rate of about 12 per cent. Finance & Accounting as well as procurement services show the highest growth among the BPO services. The Market for Finance & Accounting service in DACH A current survey among finance departments and organi zations in Germany by PAC in Munich in June 20121 shows a clear trend for more performance and lower costs of busi ness processes in F&A. According to this survey the top three priorities of decision makers are: To provide more and better information for the manage ment (65%) Cost reduction (34%) The development of analytics and business intelligence (29%). Even if this and other studies show a clear trend towards an increase of outsourcing in F&A in Germany, buyers still have a number of concerns that providers need to cope with when entering the German market.

ADP and others have their own delivery centers placed in Germany to serve the domestic market. Other BPO and ITO providers have placed instead of own delivery centers smaller regional hubs that serve as p roject manage ment or representation offices for the German or other European markets. The conditions are indeed attractive and the provider gains trust and credibility almost instantly. Intercultural Aspects – How to win on the German market?

The three biggest barriers in F&A outsourcing in Germany are: The loss of knowledge and control (49%2 / 50%3) Security risks (39%2 / 47%3) Decreased service quality (34%2/ 40%3). More information about F&A outsourcing in Germany, Austria and Switzerland can be found in the study from PAC “Der CFO im Spannungsfeld zwischen Wertbeitrag und Kosten druck” (June 2012). Serving the Domestic Market in Germany – The Onshore Model The onshore delivery center model has a proven success in Germany. Large players such as TCS, Sitel, Infosys, HP, 1 2 3

One of the reasons why the onshore model is so successful in Germany is rooted in the German business culture. More conservative and traditionally cautious, German business people are less responsive to the “sell” as for instance North Americans and Spaniards, which are typically high risk t aking cultures. When communicating on the German market providers should be prepared with lot of information, logical argumen tation and specific examples. Show an understanding for a detailed planning which has an enormous value in the German business culture. G ermans regard planning beneficial for both parties and tend to add ress potential issues in meetings very openly. Therefore when going to a business meeting the provider should be

“Der CFO im Spannungsfeld zwischen Wertbeitrag und Kostendruck” companies that does not outsource yet companies that outsource already July / August 2012

Outsourcing & More | Articles

prepared and might discuss a few points already in advance in smaller, more informal meetings or calls.

Business- & IT-Services), which is available free for both buyers and providers via www.eubis.org (currently in public beta) ▄▀

Generally German business people focus more on the task, less on the relationship between the parties, therefore pro viders should concentrate on providing a competent service and solutions. Initiatives, Organizations, Media and Services for Buyers and Providers In order to support the positive development of the market for BPO & ITO services in Germany the German Austrian Swiss Outsourcing Association r.s. leads several initiatives and offers information and presentation services, as well as platforms to both - service buyers and international providers. Buyers and providers find more than 400 professional articles, papers and market information in the Outsour cing Journal (German/English), which is available online (www. outsourcing-journal.org) and as PDF/print issues. In order to provide information about service providers and their competences, the association has launched a docu ment and corporate directory service – EUBIS (European

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July / August 2012

Author: Stephan Fricke is one of the founders and CEO of the German Austrian Swiss Outsourcing Association ( Deutscher Outsourcing Verband e.V.). He plays an active role in the out sourcing service industry in the DACH region and contri butes to the knowledge transfer and network with various initiatives and publications. (www.outsourcing-verband.org).

OUTSOURCING

VERBAND German Austrian Swiss Outsourcing Association

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July / August 2012

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Business Process Outsourcing in Lodz For several years, Lodz has consistently pursued its strategy of acquiring entities from the business process outsourcing industry. Not so long ago, in 2007, merely a few c ompanies rendering modern business services were based here. In 2012, however, there is already a market with operational centres of a number of international and domestic out sourcers. Among the foreign entities located in Lodz, there have also been many Shared Service Centres of large corporations. Development Over the last five years, the outsourcing industry in Lodz has been developing both through new investments and development of the organizations already active on this market. As recently as a few years ago, in Lodz it was difficult to find modern office buildings. It is, among others, thanks to the BPO/SSC industry that the office real e state market moved forward. If you look at the map of office buildings, practically all of them house an outsourcing services p rovider. Companies are particularly fond of office buildings such as the University Business Park, Teofilów Business Park, T extorial Park, Cross Point and the Sterlinga Business Center. There are also many other locations whose total several dozen thousand square metres of floorage host more than 30 outsourcing organizations. Companies Outsourcing service providers, information about whom we have managed to gather, can be divided into three major groups. These comprise: Finance and accountancy companies: Infosys, mBank, Multibank, GE Power Controls, Nordea, Ceri, BSS, Tate&Lyle, Phillips, Indesit, City Handlowy, SouthWestern, ACS Solutions, Nycomed, Target BPO. Call Centre Companies: mBank, Multibank, Dimar, City Handlowy, SouthWestern, DHL Express, Telmon, Ecta on-line. IT and R&D companies: Fujitsu Technology Solutions, BSH, Mobica, Rule Financial, Ericpol, AMG.net, Accenture, Transition Technologies, TomTom, Comarch, MacoLab, ABB, T eleca, BMS, LSI, Sii.

July / August 2012

Lodz also hosts operational centres of companies which have been active on the Polish market for many years. These include entities such as Polkomtel, PZU, T-mobile, Orange, Warta Insurance and several others. When compared to other Polish cities in terms of the outsourcing and shared service market, Lodz is fairly quickly catching up with the cities where the industry has already been deeply rooted, namely Warsaw, Kraków and Wrocław. Due to access to a skilled labour force, multilingualism and a developed real estate market, Lodz has become one of the best locations for outsourcing centres’ activity, which fact is being noticed by a new group of investors every year. As early as at the end of 2012, commencing business activities in Lodz will be the next big player in the outsourcing market – HP. Languages Most of outsourcers provide services in foreign languages. English support is a standard, but operational activities are also conducted in several dozen other foreign languages. Two companies: Infosys and SouthWestern provide services to end-customers in nearly 20 languages each. The serviced end-customers are located on all continents and the scope of services they are provided with ranges broadly from basic finance and accountancy processes to advanced audits and financial reporting processes. Questionnaire We have requested all of the above-mentioned companies to present, in a few words, information regarding their Lodz operational centres. Our request was answered by over a dozen entities. On the following pages we present the collected information about the size of particular companies, portfolio of the services they provide, number of employees and foreign languages in which services are provided. We include brief biographical notes of Managing Directors and CEOs.

Outsourcing & More | Report

General Manager in Poland

Managing Director in Poland

Bartłomiej Papierski

Andrzej Górecki

Experienced general and software development manager with a proven track record in agile transformation and high value project delivery. He was involved in the creation, development and management of several IT companies, including the introduction of branches of foreign companies to Poland. Over the last few years he performed as a head of project management at Cognifide in Poznan and he as well made from scratch Rule Financial branch in Lódź. Since March 2011 he develops and manages the Polish branch of an American company Bankruptcy Management Solutions Inc.

BMS Poland

Sp. z o.o.

Andrzej Górecki has more than 20 years experience in the banking and financial institutions. His career started in BRE Bank where he was responsible for starting up and running of the first settlement center in Poland - centralization of domestic payments for BRE Bank. In 2002 he took part in starting up Centrum Rozliczeń i Informacji CERI LTD as a BPO company. He was involved in expan sion of CERI’s portfolio to include new clients: banks and financial institutions outside the BRE Group.

CERI International Sp. z o.o.

Since the operations in Lodz: 2011

Since the operations in Lodz: 2003

The capital investment origin: USA

The capital investment origin: Germany

Services: BMS is a software developing company, pro viding an end-to-end technological platform used to manage the process of bankruptcy. In the U.S., for over 20 years, BMS is the leader of such services, introducing innovative technology into legal industry, at the same time coopering with national industry organizations.

Services: Transactional Banking, Managing the Customer’s Business Processes, Document Management Staff employed: 150 Obsługiwane języki: Polish, English, German, Spanish, French

Staff employed: 20 employees Languages supported: English Recruitment needs today: 10 programmers.

Languages supported: In CERI International we employ active and responsible people – also without professio nal experience. Knowledge of foreign languages (English, German, French and Spanish) and willingness to work in international environment are very important for us. Our employees work full or part time in following areas: docu ment management, servicing letters of credit, payments and data input.

July / August 2012

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Citibank International Plc Branch

Managing Director in Poland

Representative

Tomasz Buraś

Beata Skawińska Beata Skawińska Citibank International Plc Poland Branch Representative, responsible for Citi Service Center Initiative in Poland. Additionally to this role she is also S&B Operations Head in the country. Beata has started career in Citi 18 years ago in controls area. Her career development is strongly associated with the area of Operations, were she reached higher managerial responsibilities. Beata has actively participated in projects related to merge of Bank Handlowy SA in Warsaw with Citibank Poland, centralization, implementation of new systems and projects related to migration processes from Citi entities from Western Europe to Poland.

Citi Service Center, Citibank International Plc Branch in Poland

Since the operations in Lodz: 2004

Tomasz Buraś has graduated from Faculty of Transport of Warsaw University of Technology. More than twenty years of his career is related to the logistics industry. He was lecturer at the Faculty of Transport - Division of Vehicle Operation and Maintenance. Tomasz Buraś has held senior positions in logistics management. Prior to his start at DHL Express he was Purchase Office Operation Manager at IKEA Hanim Poland SA since 1992, Central and Eastern Europe Senior Logistics Director at Sony Poland (1994-2001) and Logistics and Development Director at P&O Trans European Poland. Tomasz Buraś joined DHL Express in 2002 as Head of Operations. In 2007 he was appointed Managing Director DHL Express (Poland). He is married and has two children. His passion is sailing and motor sports.

DHL Express (Poland) Sp. z o.o.

Since the operations in Lodz: 90’s (Contact Center and terminal)

The capital investment origin: USA The capital investment origin: Germany Services: Credits Collections and Verification, CitiPhone, Technological advanced services

Services: Courier and express services: international and domestic shipments

Staff employed: 1716 in Lodz, Warsaw, Olsztyn Languages supported: English, Belarusian, Bulgarian, Czech, Dutch, German, Greek, French, Hindu, Hungarian, Irish, Italian, Lithuanian, Portuguese, Romanian, Russian, Spanish, Swahili, Turkish, Ukrainian, Urdu, Vietnam Recruitment needs today: 60 employees.

July / August 2012

Staff employed: more than 5500 employees and couriers in Poland Languages supported: Polish, English, others Recruitment needs today: DHL provides a wide range of career opportunities at different levels all over the world. The latest job offers for candidates are available among others at website www.dhl.com.pl/en/careers/jobs.

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Center Head, Infosys BPO Poland

Chairman in Poland

Agnieszka Jackowska-Durkacz

Mike Gibbons

Agnieszka Jackowska-Durkacz holds a degree in Sociology from the University of Lodz and a postgraduate degree in Human Resource Management. She is a certified ICC (International Coaching Community) trainer. In 2003 she co-managed the project of establishing Philips Shared Service Center in Lodz, in the area of Finance & Accounting services. Between 2007-2008 she played a significant role in trans itioning Philips SSC into Infosys BPO Poland. Between 20072010 as Human Resource Manager, Infosys BPO Europe she was responsible for implementing and unifying various HR tools within European units of the company, introducing management training program for middle-level managers and establishing innovative recruitment methods. In 2010 she was promoted to the position of the Center Head, Infosys BPO Poland.

CEO, has a 25-year track record in pro viding software consultancy services to the telecommunications and mobile industries. Previously Mike has established, built and managed a number of leading-edge technology consulting companies throughout Europe.

Mobica Limited

Sp. z o.o. Branch in Poland

INFOSYS BPO POLAND SP. Z O.O. Since the operations in Lodz: 2007 The capital investment origin: England

Since the operations in Lodz: 2007

Services: Software development consulting, from initial definition, concept, design through implementation and testing. Mobica applies its core competence across a number of market sectors:

The capital investment origin: India Services: Finance and accounting, procurement, sales and fulfillment, logistic claim handling, master data mana gement (MDM), trade promotion management, high end services - management reporting, consolidation and sup port office, knowledge services - internal audit and Sox, process standardization services, project management services, IT infrastructure services and IT application development and support, SAP system implementation and management for Clients worldwide Staff employed: over 1300 employees in Lodz

Chipset manufacturers Banking and mobile payments TV and set-box vendors Automotive, road and rail transport

Staff employed: 104 employees Languages supported: Polish, English Recruitment needs today: 20 low level engineers, 10 HTML5/Web engineers, 5 hardware developers (VHDL/ Verilog etc), 5 iOS developers, 5 WP7 developers, 6 Telecom specialist and senior test engineers.

Languages supported: Bulgarian, Czech, Danish, Dutch, French, German, Greek, Hungarian, Italian, Norwegian, Portuguese, Romanian, Russian, Slovak, Spanish, Swedish, Turkish, Ukrainian Recruitment needs today: several hundred openings in 2012, in the areas of finance, accounting, controlling, financial analysis and audit.

July / August 2012

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President of the Board Voice Contact Center

Adam Kotrych

Country Manager in Poland

Piotr G. Kania

In contact center industry since 1997. The President of Voice Contact Center since 2009. Soon after nomination he achieved financial investor – Neo Investments. Two years later Adam Kotrych supervised the fusion of Voice Contact Center and Call One in struc tures of Outsourcing Experts Group. In 2011 the project realized by Voice Contact Center won the Golden Arrow award – as the only contact center campaign in the history. Until 2009 Adam Kotrych was the President of ContactPoint. B efore he had been member of the Board (since 2006) and the Client Service Director (since 2003). In his career he also worked as the Operation Manager, the Operation Supervisor and the Specialist in Planning and Report Department as well as Marketing Department. Adam Kotrych says that in business most important are people. Therefore he always tries to build relations and strategies basing on the team. He is passionate about football and cookery.

Piotr is managing Polish Rule Financial branch since May 2011. He built the IT operations center for customers from US and Great Britain. Since 15 years Piotr is present in ICT a dvisory industry in Poland and EMEA region. In the past he has been growing his experience in CGI participating in various projects in Portugal, Belgium and Poland; in Nokia working as an advisor for European and Middle East telecom operators; in P4 participating in start-up of new GSM operator in Poland. Working as Managing Director he was also responsible for the development of Polish office of Teleca. Piotr has graduated Warsaw School of Economics three times: IT Economics and Cybernetics, Ernst & Young Academy of Business in Financial Management and Executive MBA together with U niversite du Quebec a Montreal. Out of business hours Piotr is a big fan of diving, sailing and Portugal.

Voice Contact Center, Outsourcing Experts Group

Rule Financial Sp. z o.o.

Since the operations in Lodz: 2008 Since the operations in Lodz: 2010

The capital investment origin: Great Britain

The capital investment origin: Poland

Services: IT services in area of development and support of software for investment and wholesale banking

Services: sale, client service, consulting, social media service

marketing

surveys,

Staff employed: 300 in Łodz, 6 000 in the OEX Group across the country Languages supported: Polish Recruitment needs today: contact center consultant.

July / August 2012

Staff employed: 200 employees in Poland, 500 employees world wide Languages supported: English Recruitment needs today: Programmers, analytics and project managers including: Java programmer, Java technical leader, C# programmer, C# team leader, WPF/ Silverlight programmer, Sharepoint programmer, SQL/ETL programmer, IT help desk engineer (2 and 3 line).

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July / August 2012

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President of Sii in Poland

General Manager in Poland

Gregoire Nitot

Wiktor Doktór

The founder and the first employee of Sii in Poland. Gregoire Nitot felt in love with Poland in 1999, when he was doing an Erasmus scholarship ate the Warsaw School of Economics (SGH). He spent a few years working in Paris and in 2005, he made a business plan to creat an IT company in Poland. From the potential investors, he choose Sii – French stock exchange company, and in January 2006 he c reated Sii Sp. z o.o. (Sii LLC) in Warsaw. He is the owner of 30% of the company’s shares. As the President, Gregoire is responsible among other things for the overall strategy of the company, setting the objectives and directions in which to develop, managing the activi ties of all directors, supervising the company’s activity and finance, as well as making key decisions concerning Sii. Consequent and dynamic growth of the company shows that Nitot’s strategy is good. Sii opens new branch every year – has offices in Warsaw, Gdansk, Wroclaw, Poznan, C racow and Lodz. It employs now 1000 IT spe cialists - every month 35 new engineers on average. Gregoire spends his free time with his family: his wife and three children. He loves sport, especially sailing, windsurfing, tennis, football and cycling.

Sii Sp. z o.o.

Wiktor graduated Helena Chodkowska’s Warsaw School of Management and Marketing. In 2000 his thesis of Call Centre Management was one of the first written in Poland. In his career, Wiktor was one of the leading people during set-up processes of several Companies in Poland, taking management positions. Wiktors’ main experience is in set-up of those areas of business which concern Provisioning, CRM, Contact Centre, Billing and Accounts Receivable including Credit Control. During last years some of the projects where Wiktor was involved were organization and management of Contact Centre for Formus Polska, organization, development and management of Billing, Contact Centre, Accounts Receivable and Wholesale Billing departments in Energis Polska, implementation of Contact Centre in Lafarge Gips Polska. Wiktor joined SouthWestern on July 2007 an since very beginning was involved in building and development of Lodz based operations centre. Since 2011 Wiktor is responsible also for international sales processes in UK. He was announced twice (2011, 2012) as one of the outsourcing most important manager in Poland, he was also twice nominated to the title of the best manager in Lodz.

SouthWestern BPS Poland Sp. z o.o.

Since the operations in Lodz: 2011 The capital investment origin: France, Poland

Since the operations in Lodz: 2007

Services: One of the fastest growing IT & product engineering outsourcing company. We provide services in the fields of building and maintaining IT applications, testing, systems integration, software factory, IT infrastructure management, IT business solutions, IT consulting, pro duct engineering, embedded software, automation.

The capital investment origin: Ireland

Staff employed: 20 employees in Lodz 900 employees in Poland Languages supported: Polish, English, French, for individual request of Client – other languages Recruitment needs today: 40 IT specialist till the end of 2012, i.a. .net and Java programmers, Unix/Linux System Administrators, Business Analysts.

July / August 2012

Services: F&A, Accounts Payable, Accounts Receivable, CRM, Call & Contact Centre, Financial Reporting Staff employed: 192 employees in Lodz, 700 employees in world Languages supported: English, German, Spanish, French, Italian, Serbian, Czech, Norwegian, Swedish, Russian, Bulgarian, Hungarian, Romanian, Ukrainian, Lithuanian, Latvian, Polish, Arabic, Yoruba Recruitment needs today: multilingual customer service specialists, AP and AR specialists.

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Vice President, Head of Operations

Global Shared Services Director in Poland

Krzysztof Twardowski

Gerry Niven Krzysztof Twardowski – Vice President, Head of Operations. Krzysztof graduated University of Lodz at Finance and Banking Studies. He has over 13 year experience mainly holding managerial positions. His current scope of duties includes complete responsibility for realization of Company’s strategy, management of the Operations Department, negotiations, tender presentations to potential new customers as well as accurate functionality and development of the current contracts (including budget controlling functions, optimization of the operations approach and adjustment of the analytical and reporting tools).

Target BPO

Sp. z o.o.

Gerry is highly experienced Shared Services Practitioner and Finance Transformation Leader. With over 25 years’ experience Gerry has led nine major Shared Service transformation projects – five start up’s and four turnarounds in the UK, Europe and Globally. Gerry`s experience embraces all stages of the Shared Services cycle – Feasibility, Design & Build, Migration, Stabilisation and Optimisation, across a number of different industries – Drinks, Retailing, Travel, Manufacturing and Telecommunications. Gerry is also recognised Shared Services expert – he has judged the SSON European Shared Services Excellence Awards and is a regular speaker and workshop facilitator at major Shared Service conferences.

Tate&Lyle

Since the operations in Lodz: 2003 The capital investment origin: Poland Since the operations in Lodz: 2011 Services: Sales Force Outsourcing, Payroll, Accounting, Controlling, Legal Advisory Staff employed: 60 in Łodz, 1 000 in Poland Languages supported: Polish, English

The capital investment origin: Great Britain Services: Global Purchase to Pay activities Global Order to Cash activities Global Record to Report activities

Recruitment needs today: Sales Representatives. Staff employed: 130 in Łodz, 4,500 worlwide Languages supported: Currently Polish, English, French, Bulgarian, Turkish, Italian and Slovakian Recruitment needs today: We are looking for finance gradu ates or experienced accountants that have proficient knowledge of English and possibly other European langu ages, are passionate about Finance & Accounting, open to innovative solutions and flexible in a changing business environment.

July / August 2012

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Chairman

Telmon Sp. z o.o. S.K.A.

Artur Kapacki

Chairman of the Board TELMON SP. z o.o. S.K.A. and TELMON SP. z o.o. - appointed by the shareholders in December 2010. He created and leads the company to this day. He graduated from Warsaw University of Technology, Department of Production Engineering, Faculty of Management and Marketing. He has over 10 yearsâ&#x20AC;&#x2122; experience in telemarketing, mainly in finance and insurance. In the years 2002 - 2010 he held several managerial positions in financial and insurance industry. He was responsible for the development of Call Center Link 4 TU S.A., Call Center Provident Poland S.A. selling new products of the company and for creating a call center dealing with the sale of BRE Ubezpieczenia TUiR S.A. products. He also worked as a Project Manager in Telbridge Sp. Z O.O. Artur Kapacki is married. He is passionate about travel, likes outdoor activities such as cycling and playing squash.

Since the operations in Lodz: 2010 The capital investment origin: Polish Services: Call/contact center outsourcing, telesales, tele customer service, lead generating, CATI, voice mailing, SMS, chat Staff employed: 150 employees in Lodz 150 employees inÂ world Languages supported: polish, english, other if required Recruitment needs today: Phone operators / consultants; Lodz

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July / August 2012

Who is who in outsourcing? | Interview

Krystian Bestry Interview with European Delivery Head Infosys BPO Europe

July / August 2012

Who is who in outsourcing? | Interview

Outsourcing & More: You manage the biggest BPO company in Lodz. How does it feel to be the biggest in the market? Krystian Bestry: In fact, our Center in Lodz is now managed by Agnieszka Jackowska, who, for many years, has been my right-hand woman in Infosys BPO Europe. For the last couple of years, we have been the biggest player in the Lodz market and at the same time among the top five fastest developing BPO companies in Poland. To answer your question we should take a look at a couple of aspects. On the one hand – complexity. Being the biggest and, more importantly, the most dynamically developing center is first of all a complex challenge of providing our employees with appropriate skills and competencies to fully answer our clients’ needs. On the other – a great responsibility. Our every managerial decision can potentially affect hundreds of employees and a large number of our business partners. First and foremost however, it is a big challenge. Each new project or contract, in our case means millions of zlotys in revenue and employing dozens of specialists. It means huge expectations on the part of our clients concerning the new model of work, making difficult decisions involving down sizing in particular countries or relocating a process manage ment center. At Infosys Europe several such projects are managed simultaneously!

July / August 2012

O&M: Please say a few words about Infosys’ history. It is one of the major Indian outsourcing companies. Why did you choose Lodz? Was the acquisition of a part of Philips’ proce sses the main factor, or was it a part of a global e xpansion strategy? KB: We are one of the biggest global players in the areas of BPO (business process outsourcing) and maybe first and foremost in ITO (Information Technology Outsourcing). The history of our presence in Poland is of course connected with acquiring Philips’ finance operations in 2007. However, Infosys Group is known worldwide as a company that makes key decisions involving the choice of location in connection to its long-term development strategy. That was also the case with the Philips acquisition and creating a service c enter in Lodz. Our long-term strategy, which was strictly connected with the need for rapid expansion on the E uropean market, assumed acquiring Philips’ services for Europe and, based on this, building a multifunctional business center which would provide high-end processes requiring a knowledge of European languages. O&M: Poland is not the only country apart from India, where Infosys Operation Centers are located. Where else are you present and what factors decide about the choice of your Centers’ location? KB: Infosys Group is present in 70 countries as well as all significant national economies throughout the world. Infosys BPO in turn, currently has 16 operational units in the world

Who is who in outsourcing? | Interview

among them centers in India, China, in the Philippines, Australia, Brazil and the USA. When it comes to Europe, our main location is Lodz and two centers in the Czech Republic – in Brno and Prague. It has to be said though, that recently the network of Operation Centers has become even more extensive. In the last 12 months we have added three centers to our map of BPO locations and in the coming months we are planning to open another 3-5 units, some of which will be located in Europe or the EMEA region. O&M: We already know a few things about your global presence, how about we move on to services. As with the vast majority of outsourcing centers, you provide Finance & Accounting services. Are these the only processes you handle? Among F&A processes there is a significant diffe rence between verifying and entering data and a dvanced procurement and financial reporting services– what p rocesses are handled in Lodz? KB: A few years ago, the vast majority of our operations was comprised of transactional and procurement F&A processes. This has now changed significantly. Of course, F&A services still constitute a little more than 50 percent of our work, but they are of a different quality than two or three years ago. T oday 60-70 percent of them are h igh-end services: consu lting, internal audit, project management, financial controlling, reporting, financial consolidation, European tax mana gement or complex implementation programs. We have also significantly developed marketing services, sales

need a qualified workforce. In a company as big as Infosys, the recruitment process probably never stops and requires the application of various tools. What does your cooperation with universities and your recruitment process look like? Is it graduates or maybe people with experience in the BPO/ SCC sector that form the majority of hired employees? KB: Our employment growth is around 50 employees per month. This requires very close cooperation with the biggest universities in the region, as well as with language schools, student organizations and associations connected with the sector. As our center “matures”, and our service portfolio expands, we search for experienced employees with increased intensity. It does not have to be experience in the BPO/SSC sector, but rather in „general” business. We acknowledge our clients’ long-term perspective – they expect not only top quality service, implementation of inno vative techno logical solutions or management of global pro cesses d elivered from several locations but first and foremost - c onstant transformation ideas, access to specialist k nowledge regarding different branches of economy, or last but not least a “fresh” perspective on existing problems. O&M: Infosys is the second big BPO company which in recent years has promoted a woman HR Director to the position of Center Head. Is it because of Human Resource management’s critical importance in the SSC/BPO environment that HR managers are promoted to top positions? Or are women better managers than men? KB: I don’t think I can answer the last part of the question. Surely, for companies such as ours, which significantly grow in employment and execute ongoing transformation in terms of size and the level of complexity of delivered services, the key element is knowledge, fostering employee development and a constant search for talent and future leaders of teams or processes. Fom this perspective, the knowledge of HR environment, motivation skills and the ability to create deve lopment programs is undoubtedly crucial for efficient mana gement. Agnieszka Jackowska has been with us since the very beginning of the Lodz Center operation, thus she is perfectly familiar with operation and finance management. Our choice should come as no surprise.

management and software implementation. A few interesting examples: our Lodz specialists decide ,for example, about the production process configuration of beauty products packages of one of our Canadian Clients, or verify agricultural machinery wholesale prices of one of our clients in Argentina, Brazil or Chile. Today our centers handle a large variety of processes from all around the world. O&M: The services of course will not deliver themselves. You

O&M: A company’s development on the local and interna tional market depends on managerial competence. Could you tell us a few words about your professional history? What factors have influenced your career path? You are among Infosys’ top management in Europe – what is at the moment your area of competence? KB: I have been working in the outsourcing sector for nine years, holding different managerial positions, at Philips (2004-

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Who is who in outsourcing? | Interview

2007), as well as at Infosys (2007-2012). I was responsible for the transition of Philips F&A processes from Holland and Spain to Poland, as well as for the stabilization of financial reporting processes. Before that, I worked for one of the consulting companies from the so called ‚Big Four’ . I managed the Infosys Lodz center since 2008 and have been managing Infosys BPO Centers in Europe for two years. Today, I am directly responsible for building and imple menting Infosys BPO growth strategy in the EMEA region. Among my responsibilities is coordinating strategic Infosys projects in Europe, customer relations at senior mana gement level, as well as acquiring new contracts, especially in the CEE region. If I were to name one of the most important decisions that has affected my professional career, surely it would be joining the SSC sector in 2003. The sector, which back then was not

Chance also played its part – I was lucky enough to work with many prominent experts in the outsourcing industry, from whom I could learn a firm approach to global out sourcing projects. For those connected with the sector such names as Michel de Zeeuw, who today manages the global network of Siemens service centers, or Ritesh Idnani, former Chief Operating Officer Infosys BPO, perhaps the biggest visionaire of the sector in recent years, are well known to the industry. O&M: Beside your career at Infosys, you also find time for educational initiatives and the development of the outsourcing sector in Poland. You are a member of the Management Board of ABSL (the Association of Business Service Leaders in Poland) responsible for PR and Conference Planning. What is the biggest PR challenge for the outsourcing sector? When it comes to Conferences dedicated to the sector, t here is already quite a number of these events and new ones are appearing every year – is it not too much for the Polish market? What distinguishes this year’s ABSL Conference? KB: Surely the biggest challenge is breaking stereotypes. At the beginning of its develop ment in Poland, our sector has been pige onholed as being connected with simple trans actions, which require neither skills nor knowledge. Despite ABSL substantial success in changing this image, there is still a lot to be done concerning the education of potential employees and local authorities and tailoring the higher education curriculum to the needs of the sector and changing market conditions. For today those are ABSL’s main tasks.

widely known, today is among the most dynamically developing sectors in Poland and in the world. This d ecision was not directly connected with either a promotion or a better financial offer. It was a purely an intuitive choice, motivated by a curiosity of the sector, which was unfamiliar to me and expectations that one day it would start to develop dynamically and I would reap the benefits of previously acquired competencies. It was a kind of a risk.

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When it comes to the number of conferences in Poland – I think that the development of the sector has attracted the attention of commer cial organizations that specialize in organizing conferences devoted to various areas of the economy. Unfortunately, we are often dealing with events, whose content is very poor, but which are well developed in terms of commer cial offers. Not long ago, representatives of one of the Polish regions asked me during a huge international conference: „How do you like the trade fair?” I ave to admit that such conferences, which in theory s hould be dedicated to the exchange of experience, have recently assumed a highly commercial character. At ABSL, which is a non-profit organization, we especially try to focus on the content, tailoring the agenda to the expectations of the sector’s companies. The Association’s mission is p romoting Poland as a location for business service centers and sup porting companies, which decide to invest in Poland.

Who is who in outsourcing? | Interview

Green Horizon, new headquarters of Infosys BPO Poland

herefore, we emphasize sharing experience in the areas of T HR, IT, innovation or effective use of government and EU support programs. For a while now, ABSL has been developing its local structures, which with the participation of local authorities and universities will soon become cooperation centers for companies located in the same cities. It is also a perfect opportunity to use business to promote particular cities among investors. O&M: Your agenda is filled with a whole range of different projects but what about your free time? How do you put your duties aside – is it really possible? KB: No. Well, maybe for a few days but no longer. One can forget about long 2-3 week holidays with no contact with professional affairs. The solution is to catch your breath by combining business with pleasure. My two greatest passions are travels and sport. When I travel on business to other c ontinents I always try to make sure I have a few days for myself to take a short trip or get to know the local culture. For the last few years Infosys has also been a ctively supporting several sport centers in Poland (water sports and skiing), therefore I try to benefit from short trips to the Baltic sea or to the mountains, and take a break from current responsibilities. O&M: We are conducting this interview , in the month in which we dedicate our magazine to the City of Lodz. On this occasion, we are asking managers of big and well-known

companies about what attracts and what discourages investors in Lodz. Could you tell us, from your point of view – what are Lodz’s greatest assets and what could be improved on, to ensure the dynamic growth of the outsourcing sector in the coming years? KB: I do not think I will say anything new. Lodz attracts investors especially with the openness and flexibility of the authorities when it comes to changes suggested by us and regarding investment incentives and cooperation with universities. Despite there being three different mayors over the past few years, the team responsible for investor relations has not changed. Consequently , cooperation between business and the city is fairly seamless. When it comes to the city itself – the pull factor is certainly plenty of green areas and forests within the city, clear road infrastructure, the condensed center around Piotrkowska Street, which ensures that it is close everywhere. When it comes to the standard of living, Lodz has everything that is needed for both work and leisure. And what discourages investors? Neglected buildings, hovels falling apart right in the city center, a lack of vision in terms of aesthetics. A few projects conducted in the past few years, such as Manufaktura, the revitalization of the Księży Młyn complex, Atlas Arena, or Fala Aquapark , in my opinion, have not been finished in terms of urban planning, and connected with the rest of the city or other facilities in the neighboring areas.

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Education vs Outsourcing | Interview

The city suffers because of its image. The lack of efficient PR strategy, in my opinion, has been for many years the greatest problem of the local authorities. It is unfortunate that there is a lack of courage to make drastic changes, hiring profe ssional experts in place of current specialists responsible for the city’s promotion. I come from Lodz, which is why the image of the city means a lot to me. The last decade or two in this aspect was lost time. Krakow and Wroclaw has had excellent promotion, Poznan also did well and we can now see a huge change in the promotion strategy of Tri-city. At the same time, in Lodz there is complete stagnation. However, I think that Lodz has what it takes to become the second capital of the outsourcing sector in Poland. The wide spread availability of office space in attractive and well-connected areas of the city, major academic centers and finally a modernized airport and transport infrastru cture that provides a good connection with Wroclaw. If we manage to attract a larger number of marketing, logistics and IT specialists and increase the number of employees in the workforce with foreign languages and customer service competence, we will meet all the conditions necessary for the sector’s development. O&M: Thank you very much for your time and we wish you further development, especially in Lodz but also in other locations you manage. KB: Thank you very much. ▄▀

Krystian Bestry European Delivery Head Infosys BPO Europe Vice President ABSL As the European Delivery Head of Infosys BPO Europe, Krystian Bestry is responsible for the management of business delivery from the European locations of Infosys BPO - a company owned by Infosys Ltd., a global provider of integrated business and technology services and IT & business process outsourcing solutions. Krystian Bestry implements Infosys BPO development strategy in Europe and is responsible for acquiring new business in the region. Until 2010 Krystian Bestry was holding the position of the Center Head of Infosys BPO Poland, a business services center located in Lodz, which currently employs 1300 staff members. Krystian Bestry is the Vice President and one of the Founding Members of the Association of Business Service Leaders in Poland (ABSL).

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Krystian Bestry holds a degree in Finance and A ccounting from the Faculty of Management of the University of Lodz. For six years he worked at Deloitte & Touche where he con ducted audit projects for leading international companies. In 2004 he joined the Lodz-based Philips Finance & Accounting Center. He was responsible for transition projects and managed the general ledger and reporting departments for the EMEA region. In 2006 he became the Director of Operations at Philips Royal Electronics, one of the biggest Infosys BPO clients. He played a key role in the acquisition and transitioning of the Philips center in Lodz into Infosys BPO Poland. Areas of expertise: Outsourcing - Polish and global trends, foreign BPO/SSC investments, legal regulations concerning investment support, labor market and educating the workforce of the BPO/SSC sector.

Poland vs Outsourcing | Articles

Łódź – a City of Opportunities Łódź – a City of Opportunities as called by investors – is the third largest city in Poland. Central location, developing transport infrastructure and access to qualified and w ell-educated human resources –these are only some of the major advantages of Łódź. Łódź provides development ground for new industries that have not been identified with city environment so far, a business service centres (BPO and IT), production of household goods, electronic industry and biotechnology. Location and infrastructural projects Łódź is located at the junction of the A1 and A2 motorways, the S8 expressway and the S14 western ring road. As a result of road modernisation and construction, the journey time from Łódź to Warsaw is 1.5 hours and to Berlin – 4 hours. There are also projects underway aimed at moving the Łódź Fabryczna train station underground, modernising the Łódź -Warsaw railway line, thus reducing the journey time between the cities by train to 60 minutes, and expanding the

Władysław Reymont International Łódź Airport. The new and recently opened III Terminal having a capacity of 2.5 million passengers per year is mostly dedicated to international destinations. Flights to the largest European cities: L ondon, Dublin, Dortmund, Bremen or Milan, and also r ecently started operations to domestic destinations: Gdańsk, Cracow and Warsaw meet expectations of local businessmen. These infrastructural projects have undoubtedly a beneficial impact and contribute to greater attractiveness of the city for inve stors whose numbers have markedly increased over the recent years, especially in the BPO/IT sector. New Łódź Centre – the greatest urban renovation project in Europe Also, Łódź has launched the largest European public project – construction of New Łódź Centre and a state-of-the-art Polish underground train station – and a High-Speed Railway station in the future. This is the only construction project of this magnitude in Europe. The development plan for this area was prepared by Rob Krier, a world-famous urban designer

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Poland vs Outsourcing | Articles

and architect. New Łódź Centre is a 90-ha brownfield deve lopment project in the very heart of the City which will be featuring commercial, public and cultural facilities. A good example of the latter feature is the on-going renovation of a heat-and-power plant which today never fails to fascinate with its unique Art Nouveau architecture. The key element of the New Centre is a multi-level under ground train station with storeys down to 16.5 m below the ground. The project is worth USD 135 942 852. More than 50% of this amount will be co-financed by the EU. In accor dance with the project objectives it will be completed w ithin 42 months, and thus released to service by 2015. The p roject is aimed at expanding the transport infrastructure, including specifically public transport needs by creating a multi-modal transport hub linking railway lines with city transport, s uburban transport and a system of car parks. This investment involves creating an integrated and safe s ystem of city and regional transport with a high level of services and compatible with the EU standards in relation to protection of environment, and at the same time offering competitive prices compared to indi vidual transport means. The top priority aim of Łódź New Centre is to provide acce ssible, safe and attractive public space for residents and tourists, brownfield development and also strengthening the cultural function of the city. The total cost of the project is estimated at USD 549 228 724. Investment incentives It should be noted that Łódź offers attractive investment incentives for companies interested in starting or developing business operations in the city. It is worth mentioning that the intensity of public assistance in Łódź is higher compared to other large cities and is running at a level of 50% in the case of large companies. The basic investment incentives include corporate tax exemption in the Łódź Special E conomic Zone, various types of property tax exemptions (5 m unicipal assistance programmes), reimbursement of the costs of working equipment or additional working e quipment, co-financing trainings for employees, e.g. language courses.

providing basic information about investment conditions, necessary consents and permits, public assistance options and investment-related offer of the City, support throughout the investment process, including the selection of investment and recruitment locations, assistance in relations with public institutions and authorities.

The City Hall of Łódź has established Investment Counselling Office which is the key public partner supporting strategic investors in Łódź. It closely cooperates with the p ublic admi nistration at all levels, including the Polish A gency of Information and Foreign Investments, n eighbouring c ommunes, Łódź Special Economic Zone, public e mployment agencies, and also universities, developers and employment counselling agencies. It provides a full portfolio of services for investors and a dedicated investment counsellor responsible for:

Development of companies

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The task of an investment counsellor, supported by top- ranked civil servants in the City Hall of Łódź is pro-active acquisition and services for investors.

Thanks to the unique positive business atmosphere, high quality of human resources and also the location close to the capital city, Łódź has departed from industry-based economy to the economy based on knowledge and s ervices. Consistent actions as well as the creation and development of the Łódź Special Economic Zone has brought measurable benefits in the form of numerous investments, especially in the priority sectors. The measurable effect of this work is the

Poland vs Outsourcing | Articles

sector shows that C++ and Java specialists are in greatest demand, and also Scrum and SAP specialists. The manufacturing sector is another dynamically developing non-BPO branch. Thus many employers report demand for engineering positions, especially Process Engineers, Project Engineers, Lean Manufacturing Engineers, but also Mechanics and Automaticians. Manufacturing companies – thanks to the unique positive business atmosphere, high q uality of human resources – companies can develop by investing in services, research and development (R&D), e.g. R&D Centres of BSH (more than 30 employees) and Rossmann (more than 200 employees).

decrease in the rate of unemployment from 16.4% in 2005 to 10% in 2012. New investors are attracted by the possibility of developing and expanding their companies operating in Łódź for some years now. A good example is Infosys, a company which has steadily expanded its portfolio of services, at the same time increasing its level of employment. As shown by HR p artners, Łódź has also a fast-developing IT sector. At the end of 2011 there were 82 companies providing IT services in the region with a level of employment of more than 9 employees over the last three years (source: Statistical newsletter and the document: Social and economic situation of specific cities). A large group of major IT companies are focused on the deve lopment of mobile solutions (e.g. Comarch, M obica, Teleca, Cybercom). The ITO sector is also undergoing intense development. In 2011, Tate & Lyle, a British company, located its Centre of Common Services in Łódź. This branch of the company supports business processes of the company relating to IT, finance and accounting. IT positions belong to most-wanted type of employment among technical jobs. The demand of HR partners’ Clients operating in the IT

Some investors, such as Amcor or HTL Strefa, started in our region further investments and thus created new jobs. PGF company (currently Pelion) opened a new daughter-company – Business Support Solution which provides specialized financial and accounting services, legal services, HR, bud geting and controlling services. Among the companies which have already trusted in our city are e.g. Fujitsu Technology Solution, Accenture, Infosys BPO, DHL Express, Southwestern BPO, Ericpol, Nordea, Dell, Procter&Gamble, Amcor, Hutchinson , Indesit or B/S/H. In Łódź there is also the largest IKEA store in Poland , Port Łódź Shopping C entre which plans to have jobs for 3000 people. In 2011, Łódź Centre for Research and Development of Citi Handlowy Bank was opened. It is the first Polish, following Singapore and Dublin, independent branch-office of the bank with the basic services related to innovativeness in the banking sector. The project will be carried out with participation of the academic environment of Łódź represented by the Technical U niversity of Łódź and the University of Łódź. In 2012, Hewlett-Packard – multinational hardware and software corporation – opened in Łódź shared service center. Why is the region of Łódź so attractive for investors? T here are several reasons for concentrating business activities in Łódź, e.g. strong academic and scientific environment, and thus qualified human resources. Each year the labour market in Łódź has several thousand new university graduates (source: Statistical Office in Łódź). Furthermore, many graduates continue their education in post-graduate studies. Each year several thousand of them enrol on BPO post- graduate studies at the University of Łódź – unique studies in Poland. The advantages of Łódź include also competitive costs of labour. The difference in labour costs amounted to 5% in Cracow, nearly 14% in Poznań, and almost 30% in Warsaw (source: Central Statistical Office) which undoubtedly boosts the investment-related attractiveness of Łódź. Another advantage is the immense potential in terms of office space which should be about 270 000 m2 at the end of 2012, m ostly located in the centre which increases the

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Poland vs Outsourcing | Articles

ccessibility of services offered by a wide variety of com a panies. One more advantage of Łódź is the central location of the city in relation to Poland and Europe. Thus, there is no doubt that all the above-described factors build up the attractiveness of Łódź for potential investors, also from the BPO sector. At present Łódź, as a BPO centre, specializes first of all in finances, accounting, IT and provides space for 30 BPO companies which offer employment for several thousand residents of Łódź. Undoubtedly, another added valued offered by Łódź for investors is the HR Club – a cyclic event organised by IDES Consultants Polska and Alliance Française. The Club is a platform for the development of knowledge and exchange of experience related to acquiring and modern managing of human capital. It is a meeting place for HR experts, representatives of Polish and international companies, local government authorities, educational institutions and associations of employers in the region of Łódź which enjoy a great level of popularity seen in the attendance and involvement of the participants. The Club is organized under the auspices of the Regional Governor of the Łódź Region, President of Łódź City, Łódź Special Economic Zone, Klub 500, Łódź Industrial and Commercial Chamber, and its aim is to maintain a high level of awareness in HR problems and enhancing the know ledge of all stakeholders creating the HR policy in the region. Furthermore, in cooperation with IT companies, BPO and Common Services Centres in Łódź we have created the „Łódź – Centre of Opportunities” programme aimed at developing a range of various activities (e.g. BPO conference, “Young People in Łódź – Linguistically Centred” – www.bpo. lodz.pl) to strengthen the image of Łódź as the best location for outsourcing and IT projects.

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Universities In Łódź, there are 25 universities with more than 100 000 stu dents. Most of graduates have a fluent command of at least one foreign language. The group of public universities includes e.g. the University of Łódź and the T echnical U niversity of Łódź where educational programmes are mostly d edicated to cooperation with the business sector. The University of Łódź offers more than 40 study majors and more than 150 specialities. The educational offer of the university includes also post-graduate studies in “organizing and administering BPO (Business Process Outsourcing/Offshoring) centres”. The high level of education at universities of Łódź is shown by their positions in Polish rankings. In the annual ranking of Polish universities prepared by the “Rzeczpospolita” daily and “Perspektywy” monthly the Technical University of Łódź has been ranked at one of the top positions for the last 6 years – number 4 among Polish technical universities. It is the only technical university in the region and one of the largest in Poland. Currently, it has 20 000 students in 9 departments and 36 majors. It offers the unique International Education Centre with English and French as languages of instruction. Currently, the International Education Centre (IFE) has about 1200 students and each of them studies at least one semester abroad. Each year the IFE has more than 250 foreign students who study 1 or 2 semesters at the Technical University of Łódź. Since its inception the university has cooperated with the industry. It has agreements with large companies supported with foreign capital as well as with private and state-owned entities. These works include projects related to science, research, development, services and expert advice. Each year several hundreds of research projects and services for business entities are accomplished.

Poland vs Outsourcing | Articles

Hotels and conference space Łódź has also a developing hotel market. The first four-star hotel (Andel’s) was built in 2009. The other one – Ambasador – was opened a year later and Holiday Inn has been ope rating since June 2012. Mid-2010 a cornerstone for the h otel DoubleTree by Hilton was laid. The same year new three-star hotels – Borowiecki Hotel and mHotel – were o pened. In the second half of 2011 the construction of another four-star hotel in the very heart of the City – Novotel – was started. It is also planned to build other hotel facilities of various standard. The city offers also conference space. The Conference and Exhibition Centre of Łódź Fair is located in the centre of the city. It has a conference and exhibition space of 13 117 m2, 4 conference halls and an auditorium with a total area of 700 m2. The facilities were designed for fairs, but also for exhibitions, congresses, conferences, fashion shows and concerts. The Centre is provided with state-of-the-art electronic communications infrastructure and equipment for simultaneous interpreting. There are no internal structural poles, but there are soundproof sliding walls with optimum fittings, accessibility of media facilities, good acoustics, and compatible with the highest standards. Łódź as a cultural and entertainment centre

To ensure wide access to well-educated human resources, the City’s authorities, universities and employers of Łódź coo perate also under the now four-year-long programme titled “Young People in Łódź” (www.mlodziwlodzi.pl). The programme is being implemented under the auspices of the project called “SPIN Łódzkie” promoting spin-off and spin-out enterprises and carried out by Kombinatorium. The aim of the project is to create a communication platform which could enable cooperation between science and b usiness, and to create a process of commercializing innovative technologies. The project is being carried out with participation of HI-TECH business representatives.

Łódź is also a centre of cultural events at a national and international level. Among more than 70 events organized over the year in the City there are Łódź Ballet Meetings, FOTOFESTIWAL, Four Cultures Festival, CINERGIA European Cinema Forum, International Festival of Pleasant and Unpleasant Plays, and also those referring to the textile tradition of the City: Golden Thread Contest or F ashionWeek, FashionPhilosophy which are the greatest fashion events in Poland. Fashion Week Poland features first of all shows of famous designers “Designer Avenue”, off-fashion shows and a contest for debutants “OFF out of Schedule”, presentations as part of “Showroom” projects – presentations of fashion designers and Concept Store- presentations of clothes m akers/brands, and also trainings and seminars “Let Them Know”. Thanks to Fashion Week (and F otofestiwal and D esign Festival) Łódź received the “Excellent City 2010” award from the “Twój Styl” fashion magazine and the event was awarded the title of “Event of the Year 2010” from the “Aktivist” magazine. A great attraction of the city is undoubtedly its unique 19th- century architecture, especially noticeable in the P iotrkowska street and „Manufaktura” – one of the largest shopping- culture-entertainment centre in Europe. Opened in 2009, the most modern Polish multi-purpose sports arena – Atlas Arena – with a capacity of 12 000, with City Stadium (capacity

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Poland vs Outsourcing | Articles

of about 20 000) planned nearby, compatible with all UEFA requirements, together with Fala Aquapark, will be the grea test sports and recreation complex in Poland. Łódź as seen by the Association of Business Service Leaders (ABSL) In June 2011, during the 6th Outsourcing Forum and 2nd Conference of the Association of Business S ervice Leaders (ABSL) the City of Łódź received a prestigious Excellent Partner award for intense promotion of the s ector of m odern business services and active measures aimed at attracting foreign investors operating in this sector, and also cooperation with the investors operating on the Polish market. In the ABSL’s report titled “The sector of modern business services in Poland” Łódź has been ranked number five among the most important and largest BPO/IT centres

Strategy for 2020+ The Strategy of Integrated Development for Łódź 2020+ is another step on the road to full development of our city. It defines challenges and priority lines of development for the city, and as a result it will help to plan city-related actions and investments and organize city management. The document forms the basis of the strategic planning system in Łódź and it will also help both residents and investors to rationally plan the future. The Strategy of Integrated Development for Łódź 2020+ was prepared based on the principles of sustainable development, intelligent development, subsidiarity, effectiveness and economy and the principle of concentration of actions. Thus the Strategy is fully compatible with the EU model of integrated strategy. It is formed of an economic part – aimed at increasing revenues of the city and its residents, a social part – aimed at increasing the social capital, and an environmental part – with the priority of achieving a healthy resident- friendly city. All these parts are based on the objective of the improvement of city management and defining system tools for implementing the strategy. Consistent implementation of the Strategy of Integrated Development for Łódź 2020+ will help within a few years to improve city management, thus increasing the number of workplaces for Łódź residents and also enabling benefits by enhancing the city image, creating a vibrant city, renovated city centre with well-functioning urban and suburban transport. The Strategy will help to improve security and safety as well as make Łódź a cleaner city with a greater number of better accessible green areas, higher level of education and access to kindergartens and nurseries. The Strategy is also an impulse to create in Łódź an atmosphere of culture, cooperation, mutual trust and citizen’s activity.

in Poland. It was highlighted in the report that the city had the highest level of employment in the sector since 2009 which was achieved e.g. thanks to the access to a vast variety of academic facilities. It should be noted that Łódź has the largest number of IT graduates in accordance with the ABSL’s data. Together with Wrocław, Łódź has also been top-ranked with respect to the collaboration of local authorities (and their subdivisions) with representatives of service centres.

All the actions described in the Strategy of Integrated Development for Łódź 2020+ will contribute to transforming Łódź into a friendly, creative city of sustainable development, competitive conditions of living, working and investing, using its historical, infrastructural and creative potential. Łódź is a city open to development and oriented to development in support of initiatives and creativity of its residents. Welcome to Łódź! ▄▀

Furthermore, Łódź Special Economic Zone was also ranked number 11 worldwide (number 1 in Poland) in the ranking of the best Economic Zones according to the Financial Times. Source: City of Łódź

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Poland vs Outsourcing | Interview

July / August 2012

Poland vs Outsourcing | Interview

Outsourcing&More: Mrs. President, thank you for finding some time for us. For many years, BPO has been prioritised as a key component of the development strategy of Łódź. Why is BPO so important for Łódź and will it continue to be as important in the years to come? Hanna Zdanowska: More and more global companies have their accounting, financial and support work done by external providers. Nowadays, outsourcing is no longer limited to simple financial and bookkeeping processes, while the market power of the BPO sector has been steadily growing. Outsourcing centres are becoming more and more independent from their head offices and handle processes of increasing complexity. Łódź is an ideal place for such services to develop, mostly because of its location in the direct vicinity of the capital, its role as an academic centre and s uccessful cooperation of higher education institutions with the busi ness sector. Other advantages include readily available office areas, as well as low costs of running a business, and this distinguishes our city from other major urban centres which are also keen to support the development of BPO.

and complexity of their processes. Companies which have been engaged in business activities in Łódź for several years have developed and expanded the scale of their operations and this acts like a magnet for new investors. This has mainly been achieved with a consis tently implemented strategy, adopted back in 2005, in which primary importance is given to ensuring professional services for investors, especially for the ones from strategic sectors. 10 000 new jobs have been created in Łódź since then. The City offers support projects and a wide package of incentives, as well as property and CIT tax exemptions in the Special Economic Zone of Łódź. It should be remem bered that the Special Economic Zone of Łódź was first in the Financial Times ranking among all economic zones in Poland and eleventh in Europe.

Łódź is trying to attract investment in many types of outsourcing – ITO – information technology outsourcing, LPO – legal process outsourcing, or KPO – knowledge process outsourcing. We are pleased that a large number of local companies create modern computing solutions not only for themselves, but also for external customers. We can observe a growing popularity of outsourcing in other areas prioritised by the City, e.g. in logistics. Enterprises which outsource logistic services benefit from lower costs of warehousing or trans port services and become more flexible in their interactions with contractors. At the core of the concept for Łódź of the 21st century lies the development of biotechnologies and innovative pro jects. To support this development, a Regional Scientific and Technological Park will be built in Łódź. O&M: The number of companies from the modern services sector has risen to over 30, compared with fewer than 10 in 2007. How does Łódź attract foreign investors and what is there in the City’s offer that makes it an attractive location for investors from America, Western Europe and India? We also know that investors from China have increasingly shown inte rest in Łódź – should we expect new investors from there? HZ: An investor who comes to Łódź finds an e xceptionally favourable business climate and well-qualified human re sources. This is why companies which operate here not only employ more and more people, but also increase the quantity

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Our new projects have likewise met with favourable res ponse. During the Real Estate Fair in Cannes, we had a chance to present the design of the New Centre of Łódź for the second time. It met with great interest and appreciation among p eople visiting the fair, who considered it to be one of the most interesting business locations in Europe. Recently, we have also received a number of delegations from China. This proves that Chinese enterprises are keenly interested in our City and its economic potential. Thus far, 2 Chinese companies have been operating in Łódź: Victory Technology Polska Sp. z o.o. and Yung Cheng Poland Sp. z o.o. The authorities of Łódź are planning to visit China in the nearest future to promote the City and its wide package of incentives for investors. Contacts have also been established with the Polish branch of the largest Chinese invest ment bank - the Bank of China.

Poland vs Outsourcing | Interview

O&M: On the Polish outsourcing map Łódź ranks fifth in the number of investments in this sector. This is mostly due to a large pool of human resources and the availability of well- educated professionals. What is the potential of the human resources in Łódź? HZ: Łódź is one of leading academic centres in Poland. It has 6 public higher education institutions and 18 non- public ones, with the total student population of 100 000. Thirty thousand people graduate from them every year. The University of Łódź is the largest public higher education institution – with about 41 000 students (followed by the University of Technology and the Medical University of Łódź). There are about 170 students per 1000 inhabitants in Łódź. Students of the University of Technology have a record of achievement in the Image Cup competition organized by Microsoft. In 2009, they won the second place and in 2011 they won the Polish finals by presenting their LIfeCircle+ system. Another very important issue is the knowledge of languages among potential employees of BPO centres. In 1992, the University of Technology set up the International Faculty of Engineering (IFE) with English or French as the language of instruction. The University of Łódź offers programmes of study in English too. The Economic and Sociological Faculty of the University of Łódź provides programmes of study in computer science and econometrics in English, educating future analysts of economic and IT systems. All classes are taught in English. At present, the higher education institutions in Łódź are im plementing a number of new projects. One of them is the Centre of Information Technologies, which is being built by the University of Technology. The centre will provide educational activities for students of the University of Technology to equip them with skills in developing and using innovative informa tion technologies in different areas of application. Another example is the New Media Centre which was opened at the Polish National Film, Television and T heatre S chool in 2011. As can be seen, the local institutions of higher e ducation play an important role in achieving the objectives of the brand strategy “Łódź Creates”. O&M: Łódź is also known for its ground-breaking ideas. This includes programmes such as “Young People in Łódź“ (“Młodzi w Łodzi”) or the programme promoting language learning “Młodzi w Łodzi – językowzięci”, as well as other initiatives carried out under the aegis of the city, including the HR Club. Do these programmes meet your expectations? HZ: The “Młodzi w Łodzi” Programme has been running sin-

ce 2008. It was launched to encourage young people to tie their future with Łódź and to enhance the image of Łódź as a city which supports individuals in the development of their professional careers. The number of local companies which are involved in imple menting the “Młodzi w Łódzi” Programme has increased to over 60. The three largest higher education institutions in Łódź: the University of Łódź, University of Technology and the Medical University of Łódź are also taking part in it. One of the most important initiatives under this p rogramme is a comprehensive scholarship system which is unique coun trywide. Under this programme students are offered scholarships in fields of study whose graduates are the most sought-after by local employers. The scholarships are funded by Employers and the Office of the City of Łódź. Co-funding is also provided for places in student hostels for non-residents of the Łódzkie Voivodeship and for additional courses in foreign languages. Another very important initiative under the programme is the Internships and Placements Website (www.praktykilodz. pl), which enables young people from Łódź to gain job-relevant experience during internships and placements in the best

July / August 2012

Poland vs Outsourcing | Interview

O&M: The development of investors depends on the pos sibilities offered by the Economic Zone, Industry and Technology Parks, modern office infrastructure. What does it look like in Łódź? How successful is the City’s cooperation with other organizations which support the development of investment in the region? HZ: We are working closely with all our partners, including: the Łódź Special Economic Zone, Higher Education Institutions, Polish Innovation and Foreign Investment Agency. We are committed to strengthening the relationships bet ween business and science. We support the activity of higher education companies and local companies in this area and we are involved in a number of joint activities. This includes organization of conferences with local companies, workshops and participation in job fairs, the aim of which is to adjust curricula to the needs of investors. In the context of attracting new investors, we are also very keen to invest in local human resources and to make sure that graduates of higher education institutions receive the best education possible.

companies in Łódź. This year, we have also launched a related project – “Get your training in Łódź” (“Praktykuj w Łodzi!”), which offers paid holiday internships with the best Employers in Łódź. Students who wish to improve their knowledge may take part in non-paid student training “Your Career is in your Hands” organized in cooperation with partners who also take part in the “Young People in Łódź Programme” („MŁodzi w Łodzi”). There is also a competition “Young People in Łódź – I have an Idea for a Business” (“MŁodzi w Łodzi - Mam pomysł na biznes”), which is addressed to young people with entrepre neurial mindsets. The aim of this competition is to recognize and support the best business plans of young entrepreneurs in Łódź who have started up a business or are planning to do so in future. All participants who submit a business start- up idea are provided with an opportunity to participate in free training and personalized consulting. The best of them receive financial awards, prizes, foreign language classes or free accounting services for their start-up businesses. In 2011, we launched one more new initiative under the “Young People in Łódź Programme” entitled “Get to Know the Employers of Łódź!”. Its participants visit local Employers who are our Partners of the “Young People in Łódź” Pro gramme. In this way, they have a chance to visit their com panies and plants and to obtain information about employ ment prospects and recruitment processes there.

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The cooperation with the Special Economic Zone of Łódź and other institutions supporting the development of entre preneurship in Łódź, is at the core of business relations between the City and the local companies. We often parti cipate in economic missions organized by the Polish Inno vation and Foreign Investment Agency. However, our close cooperation with the Agency is mostly associated with the currently ongoing investment projects. At present, talks are being held with several investors who have been advised to invest in Łódź. The business partners of Łódź also include HR companies and property developers. O&M: Cooperation is essential for the development of the city and the region. Another essential issue is promotion that goes beyond local and regional perspectives. Łódź is visible at a large number of events, including the SSON conference in Amsterdam and meetings with investors in London. In the previous years, Łódź was also represented at industry- specific conferences organized by Roadshow Polska, ASPIRE or ABSL. What form of promotion is the most important for Łódź and brings the desired results? HZ: Promotion among business representatives is a fairy challenging task due to changes that are taking place in Łódź. Last year, we presented a draft of the new strategy of the City which envisages, among other things, the deve lopment of key industries and improvement of the City’s image. One of the first steps taken in that direction was the

Poland vs Outsourcing | Interview

In conformity with our historical experience, we inspire artists and creators, gaining recognition in other parts of the world. Thanks to events organized on a national scale such as: FashionWeek, FashionPhilosophy, Explorers Festival, or the “Golden Thread” Competition, building on its rich tradition as a centre of textile industry, Łódź has already earned some reputation as the venue of international events. Therefore Łódź is increasingly visited by international celebrities, whom Łódź provides with inspirations and material for creative work. For example, we have been visited by the architects Robert Krier and Daniel Libeskind, who are both involved in designing the New Centre of Łódź. The presence of such big names provides us with new opportunities to promote and advertise our City on a global scale. O&M: After carrying out appropriate and correct marketing and promotional process, there comes a time for a launch of an investment project, with the investor being looked after throughout this process. In Łódź, support services for inve stors are provided by the Investor Service Team. How large is this team and what sort of assistance does it offer to an organization deciding to invest in Łódź?

development of a new logo and a slogan identifying the city. “Łódź creates” has been chosen as the one which best epi tomizes the character of our City. We give priority to creative industries and look for innovative solutions in every area. Łódź promotes BPO as an industry for which the most favo urable conditions have been created here. Industry-specific conferences and fairs play an enormous role in promoting the City and the BPO sector. During these conferences and fairs, representatives of Łódź have a chance to present the economic and investment potential of the City. Individual talks which usually accompany such events are also important, helping to present Łódź to interested parties. We are aware that promotional materials must also be publi shed in magazines and periodicals distributed worldwide…. This is why we have decided to cooperate with the outsour cing sector and not only (she smiles). We want Łódź to be perceived as a friendly City, both for its residents and visitors. Initiatives taken within the frame work of the “Łódź Creates” Project are aimed to highlight the c ultural heritage of the City and to draw attention to its unique and exceptional atmosphere. With this in mind, we organize events such as “Łódź, the City of Women” addre ssed to women of all ages who look for high-quality enterta inment and inspiring meetings.

HZ: The Team consists of 6 investor relations managers, 3 of whom provide assistance for investors from the BPO and IT sectors, 1 for the ones from the biotechnology sector and 2 for manufacturing companies and the logistics sector. The work of the Team is supervised by a coordinator. The Team is tasked with taking proactive steps to attract investors and provide them with assistance of dedicated staff. Support is also provided by senior officials in the Office of the City of Łódź. During the entire investment process and after its completion, every strategic investor is assisted by a dedicated investor relations manager who is responsible for a given investment project. O&M: Mrs. President, I would like to finish our conversation with some statistical data on investment in the BPO sector. Could you tell us how many organizations are currently providing BPO/SSC/ITO or call centre services and how many people they employ? HZ: There are currently 30 companies which provide BPO and call centre services with over 7 500 employees and 20 IT companies with over 2 400 employees. O&M: Thank you for your time. We hope that investment in the outsourcing sector in Łódź will be growing steadily and we will be happy to post information about it on our website. ▄▀

July / August 2012

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It is beyond any doubt that the Lodz Airport Ltd. experiences its time of prosperity. Within the last year the Lodz Airport succeeded in handling about 400 thousand passengers and plans to launch another several routes in the near future. At this very moment the Lodz passengers can reach Milano, London, Liverpool, Edinburgh, Dortmund, East Midlands, Dublin, Bremen, Oslo and Bristol. Since Spring 2012 a new carrier – the OLT Express - has been operating a new route to Gdansk and it will introduce with several more destinations to Warsaw, Wroclaw, Rome, Paris, Frankfurt, Edinburgh and Barcelona in Fall this year. The winter flight schedule will be also extended with the Lodz- Copenhagen route operated by the Scandinavian A irline SAS, which is the first, after the significant break, traditional carrier cooperating with the Lodz Wladyslaw Reymont Airport. With the SAS airline, the City of Lodz gains the first and unique regular connection to the great international aviation hub and this fact carries significant implications for international investors whose interest of the Lodz Region gradually increases. The new destination will be launched on the 28th of October, 2012 and flights will be operated six times per week (except Saturdays). Passenger will travel by the 50- seats aircrafts of CRJ200 type. Tickets’ prices on the Lodz-Copenhagen route starts with 435 PLN (one way ticket price with all the taxes and fares included). Taking off from the Lodz Airport SAS aircraft will land in the Kastrup Airport, which remains the main base for the SAS fleet and provides passengers with the variety transit

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options. The Kastrup Airport belongs to the group of world most passenger-friendly airports and has been frequently awarded for its nice and easy transit procedure as well as its intimate and quiet atmosphere. Thanks to multiple and direct connections from the Copenhagen Airport realized by the SAS airline and others associated within the Star Alliance, passengers travelling from Lodz may not only profit with a comfortable mean of transport to the Denmark and the whole Scandinavia Region, but also to numerous European cities as well as g reat number of selected on the other continents. Moreover, the Lodz Airport clients may choose among the wide range of charter destinations in Bulgaria, Egypt, Greece, Tunisia, Israel and Turkey available in the summer timetable. The Lodz Airport authorities strive for a subsequent extend of the routes’ net and in the same time they introduce next infrastructural investments which determine the airport’s d ynamic development. The new 26 thousand square-metre Passenger Terminal building has just started operation on the 6th of June. It’s capacity enables to handle about 1,5 million passengers per year. Baggage check-in takes place on the ground floor at 14 check-in desks. At the end of line - at the No.15 red- line marked desk - passengers with items to declare will be checked. The maximum Terminal’s capacity is estimated

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for about 1300 people handled per hour. It means that the airport staff will pursue check-in procedure for six different flights operated by the Boeing 737 – like aircrafts, simultaneously. Expecting the board-in, passengers can spare their time in one of two available waiting halls or visit the shopping and restaurant arcade. Duty free zone will be separated from the trade and service area. Projects of the new Terminal included also the glazed observation deck. Passengers who value their time and comfort of travelling, are invited to the VIP ROOM with a separated access to security check-point. For business class passengers the new Terminal offers the adequate Business Executive Lounge. By the 30th of June, passengers of all flights will have been handled in the new Terminal.Total costs of investment are estimated for 171.864.357 PLN, and about 77.913.282 PLN was designated by the E uropean Regional Development Fund. The other part that must have been provided by the beneficiary’s own contribution, stemmed from the Aiport’s own resources. The Lodz Airport Ltd. develops also cargo handling services. In September 2011, Lufthansa Cargo started operations at the Lodz Airport, introducing flights to Frankfurt, Dusseldorf

and Vienna. For individual request we can arrange the freight conveyance on the container lorry. We ensure cargo delivery to its destination with the 24 hours, for instance to Dubai. To enlarge the cargo handling capacity, project of the new cargo terminal is planned for realization within years 20122013. Cargo Terminal will be equipped with facilities to c ontrol temperature within stores as well as safe deposit boxes and cold storages. During last months at the Lodz Airport we were finalizing investments designed to facilitate travelling and ensure pass engers the greatest possible comfort. And within the c oming months will focus on the new attractive destinations, expe cted by our passengers. ▄▀

Source: The Lodz Wladyslaw Reymont Airport

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July / August 2012

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Interview with Justyna Ciumaszko, Investor Relations Manager selves with business possibilities offered by the City, if not to undertake investments. Currently, there are more than 7000 employees in the BPO and SSC sectors (excluding IT). O&M: What was the greatest success of Łódź over the recent years from the perspective of and investment coun sellor, and at the same time a specialist dedicated to BPO and IT companies?

Investor Relations Team

Outsourcing&More: Łódź creates BPO? What does it mean exactly? Justyna Ciumaszko: This phrase goes back to the city’s strategy: „Łódź – creates”. The name BPO refers to priority industries and sectors defined beforehand. Our aim is to add a new dimension to Łódź, and as a result of its predispo sitions as an academic centre not far from the capital city outsourcing and advanced business services determined the natural line of development. There have been outsourcing companies in Łódź which mostly provided services on the home market. Thanks to active measures of Łódź authorities, but also involvement of business environment institutions, e.g. developers working on modern office spaces, HR com panies and open-minded approach of universities in Łódź, not only the existing companies have increased their level of employment or complexity of their processes. Their develop ment encourages new investors to at least familiarize them

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JC: Łódź becomes more and more recognisable on the eco nomic map of Poland and the world. It is no longer associated only with textile industry. It is often referred to the creativity of the City and new interesting solutions it offers. International events enjoy great popularity, e.g. FashionWeek, CINERGA Film Festival, and Design Festival. Łódź is growing a more and more modern city. It has new office buildings, exclusive hotels, sports facilities. Certainly, our most important task is to acquire new investments. Łódź is greatly successful in acquiring new investors from the BPO and IT sectors. There are international worldwide-recognisable c ompanies opera ting in the city, e.g. Fujitsu Technology S olutions (European Customer Service Centre), Infosys BPO Poland (deve loping its services towards more advanced ones, such as consulting, auditing), BSH or Rule Financial. We are also glad that among the companies which have started their operations in the city there are entities originally from this region – from Łódź, e.g. Transition Technologies or Ericpol. O&M: Competing with other cities, one naturally compares the offered opportunities and advantages to those offered by other conurbations. What is unique for Łódź? JC: Investors who trusted in us appreciated our open-minded approach, professionalism and ethics of e mployees in Łódź. The labour market in Łódź is relatively stable and has a low factor of job rotation. Łódź offers competitive c osts of busi ness operations – including competitive labour costs with human resources with extensive professional experience. Furthermore, it is possible to immediately lease Class A and B office space at competitive prices both in 19th-century buildings transformed into modern office facili ties and in newly built office buildings. And certainly the central location of Łódź is an additional important argument which distin

Poland vs Outsourcing | Interview

guishes our city compared to others. Apart from that Łódź offers to its residents lower costs of living with a relatively high quality of life, which is particularly valuable. O&M: Which investment incentives are considered most interesting by investors? JC: Companies appreciate the investment atmosphere, an opportunity to invest in the Łódź Special Economic Zone and the open-minded approach of the city and its support. The fact that there is a person who supports the company throughout the investment period, helps at each stage of the project, is certainly our great advantage. Furthermore, inve stors appreciate the opportunity to participate in the p roject “Young People in Łódź” Also the project “Young People in Łódź – Linguistically Oriented”, offering courses of rare lan guages for employees of the Common Services Centre, is considered rather interesting. Companies are ready and willing to participate in actions organized by the city with the aim of enhancing the science-business relations. As a Team we do our best to meet the demands of companies starting their operations in Łódź and those which have been ope rating here for years.

JC: Each of us provides counselling services to c ompany supported by a given person from the very beginning, first providing information about the city, human resources, universities, and then showing accessible office space. Fur thermore, we facilitate relations with universities or partners, such as the Łódź Special Economic Zone. We expect the needs of our investors, initiate meetings with them, talks, conferences. Our actions are also aimed at integrating the environment of investors in the City by organizing various events and meetings. O&M: How many persons are there in ZOI? What personal features are characteristic for the team members? JC: The team is composed of 6 investment counsellors – persons dedicated to cooperate with entities from BPO, IT and biotechnology sectors, manufacturing and logistics com panies. Each counsellor is different, but together they make a very good team. We support and have a good o pinion of each other. We are individualists who are good team workers. We have different skills and therefore we can be effective even in the most stressful situations. O&M: Thank you for your time. ▄▀

O&M: Maintaining good relations with investors forms part of the so-called pro-investment counselling. What does it mean exactly?

July / August 2012

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Zgierz – why is it worthwhile? Zgierz, located in the centre of Poland, is the seat of the Zgierz district and part of the Łódź agglomeration. The city is one of the administrative and industrial centres of the Ł ódzkie province. It has numerous administrative functions for over 160,000 dwellers of the district. Zgierz is one of the oldest cities in the region. It was granted town privileges before 1288. The city is mentioned for the first time in a d ucal docu ment dated 1231 as Sguyr. The name Zgierz means a burnt place, place of sacrificial fires burnt, place of burnt out forest. The area of the city is around 43 sq. km. It is located in the plain of the Bzura river at the edge of the Łódź High P lain cutting into the Central Polish Lowlands. This makes the terrain extraordinarily diverse, and the height differences are up to 40 m. The central location of the city, adjoining a big metropolis and being at the crossroads of many national and international roads and rail routes, favours the development of business and makes Zgierz a very attractive venue.

City Council of Zgierz established the Weavers’ Town Culture Park and has been rehabilitating the one of the most inte resting complexes of wooden buildings in Europe for a few years now.

Population Currently, Zgierz has a population of about 56,500. There is more than 37,000 working-age people, which translates to almost 65% of all the Zgierz inhabitants. It is the fifth b iggest city in the province in terms of population. Additionally, Zgierz, as the seat of the Zgierz district, is the most popu lated among all of the communes in the district. Must see The biggest tourist attraction of the city is the Weavers’ Town Culture Park opened in 2011. This is a complex of weavers’ houses located within Narutowicza and Rembowskiego streets. Four weavers’ houses were translocated, rehabili tated and preserved, and the 19th century character of both streets was brought back (gas street lanterns, p aving). Consequently, the historical development of the New Town Market Square was restored in that area. The Park encom passes a section of the preserved chessboard layout of the city divided into regular and equal plots intended in the 1820’s for weavers’ houses. The influx of foreign c lothmakers into the city was the result of the industry supporting p olicy pursued by the authorities of the Kingdom of Poland and the conclusion of the so-called “Zgierz C ontract”. Subse quently, more than 300 drapers came to the city. Each of the newcomers b uilt a wooden house on a brick wall base covered with roof tiles on a selected plot. During more than ten following years Zgierz became the biggest manufacturer of cloth in this part of Europe. On 30 December 2003 the

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Economy The beginnings of industry in the Zgierz region were linked to glass-making. Later, after 1820, the city was undergoing the process of transforming into a resilient textiles centre to become the capital of the Polish textiles industry. The con temporary Zgierz industry comprises companies in such trades as textiles, metal, chemistry, printing. A “Zgierz” sub zone, composed of two groups: Rudunki and Boruta, was established within the Łódź Special Economic Zone. In July 2004 the Boruta Zgierz Industry Park was opened in the premises of the former “Boruta” Dye Industry Plants. This is one of the best locations of industry areas for investment pro jects in Poland, i.e. within 3 km from the A2 motorway, which has lately become fully operational, and about 15 km from junction 37 on the A1. The city has also a heat and p ower generating plant and a sewage-treatment plant. Assets of the city One of the biggest assets of the city that are crucial for many types of business activities is its central location in the trans port system of the country. From the south Zgierz borders on Łódź – the biggest city of the province. The commune of Zgierz is on the city’s southern and northern borders, and the commune of Aleksandrów Łódzki is on its western border. Zgierz and its adjoining areas are perceived from the nationwide perspective as having the function of transit and

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transportation hubs. This is a result of the main transport routes running in the close vicinity of the city and the existing utilities (pipelines, electricity power transmission lines). Just a few kilometres away from the city there are two motorways crossing each other – the A1 running from the north south wards and the A2 connecting the eastern and the western parts of Poland. Considering its central location, Zgierz is situated within a 200-300 km distance from the biggest Polish cities. This is key for our region and turns our city and the region into the national and European centre of logistics and distribution services. The attractiveness of Zgierz as the perfect place for an investment project is proved also by the good access to the still developing Władysław Reymont Airport in Łódź (as close as 20 kilometres from the southern border of the city). The proximity of the biggest Fryderyk Chopin Airport in Warsaw is also relevant, not to mention the well-developed railway infrastructure which includes both passenger and cargo transport. Additionally, the spatial development structure is a factor boosting the investment attractiveness of the city. The administration premises are located mainly in the city centre. What is of crucial impor tance for industrial activities is that the industrial areas of Zgierz are on the outskirts of the city leaving the landscape of residential area intact. Moreover, there is a broadband fibre optic network within the city implemented under the projects: ‘Comprehensive Development of Infrastructure of Information Society in the Commune of Zgierz City” and “Metropolitan Broadband Internet Access – MSSDI”.

supporting investment activity, transparency and unification of the investment process and public procedures, providing investors with information necessary to run an investment activity, technical support offered to prospective foreign investors, city support in drawing up and implementing investment programmes, putting favourable conditions in place for the preparation of know-how facilities, political and economic stability of the city, exempting investors starting their businesses in the Boruta Industry and Technology Park from real property tax, tax benefits for large investors. Thus, a prospective investor is afforded an opportunity to run its business activity on the Łódzkie province market of almost two million and the enormous national market. All those actions as well as the approval of the authorities of the city for any and all undertakings aiming at business development are of vital importance for the increase in the economic recovery of Zgierz and its investment attractiveness. It is certainly worth living here and making investments. ▄▀

Investment policy The basic assumption of the investment policy of the city of Zgierz is to guarantee economic growth as a consequence of the sustained inflow of foreign investment. The City Hall makes every endeavour to make Zgierz become soon one of the most important centres for foreign capital investment. To this end, the following factors need to be in place:

Source: City Council of Zgierz

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Visit of Johann Schneider-Ammann, Swiss Minister of Economy - February 2012 / Source: Lodz Special Economic Zone

Lodz Special Economic Zone – Fashion Zone! Great location, tax incentives, friendly environment, long industrial traditions and assistance in implementing the investment project cause that Lodz Special Economic Zone is a perfect location for companies who intend to enter European market or expand its activity. In 2012 Lodz SEZ was recognized as the 3rd zone in Europe Region and 18th zone in the world - by „Financial Time” fDi Global Freezones of the Future 2012/13. Lodz Special Economic Zone:

the highest level of State Aid in Europe, strategic location in central Poland, good transport links, attractive investment areas, comprehensive servicing of investment processes, well-qualified employees.

Entrepreneurs who set up new business activity within the Lodz SEZ are entitled to regional State Aid granted in the form of a tax exemption up to 70% of eligible investment costs or two-year labour costs. Lodz SEZ has a wide investment offer including both A-class office spaces, ideal for BPO and IT activity and greenfields for the construction of production plants. In 44 subzones located

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in the centre of Poland, Lodz SEZ has interesting investment sites with good communication links. Results achieved by Lodz SEZ are the best testimony of its success. During the past fifteen years, 209 business activity permits have been issued. Investors together have created almost 25 000 workplaces, whereas the value of investments has been estimated at 2 billion Euros. Our investors represent various branches: manufacturing of cosmetics and pharma ceuticals, household appliances, medical devices, construction materials, food processing, plastic processing, BPO & IT, R&D as well as logistics. In 2011 Lodz Special Economic Zone was recognized as the highest rated by Investors, Special Economic Zone in Poland.1 Our investor list includes: 1

DELL Procter & Gamble Gillette Bosch-Siemens ABB Amcor KPMG Report “Special Economic Zones,” Edition 2008, 2010, 2011

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The Lodz SEZ Team / Source: Lodz Special Economic Zone

15 things you should know about the Lodz Special Economic Zone Firstly, our team is professional and creative Each investor in the Lodz Special Economic Zone is assigned an advisor who guides them through the entire process related to the issuance of operating permits as regards busi ness activity in the Lodz Special Economic Zone. We also offer our assistance to those entrepreneurs who are already operating in the zone. We have already received an award for the high level of our services and the list of issued permits (over 209 so far) is the best recommendation for the whole team of the Lodz Special Economic Zone. We closely work with local authorities in order to s treamline the investment process, We support investors in dealing with companies supplying utilities (suppliers of gas, energy, etc.), We organize free training for investors, We organize annual integration meetings for investors, We promote investors in the media, We provide support in dealing with the Ministry of Economy.

Secondly, corporate social responsibility is more than a slogan to us Apart from attracting investors, we also create initiatives and projects with regard to Corporate Social Responsibility. We are involved in philanthropic activities, such as helping children, both orphans in children’s homes and those suffering from health problems. Under the program „The Zone for Children”, the Lodz Special Economic Zone has been organizing, in cooperation with CARITAS in Lodz, investors and business partners, the largest Christmas charity event in the region for 14 years. We also participate in the „Jonatan” campaign and e ncourage our investors and business partners to join it. The main obje ctive of this initiative is to help youth at risk of social exclusion by improving their chances on the job market. The program is implemented in Lodz and Radomsko by Indesit Company Polska and the „Jaś i Małgosia” Foundation. The Ministry of Justice of the Republic of Poland is the patron of the project. Acting in the best interest of the local community, we p romote the idea of „revitalizing” the cultural heritage of industrial Lodz, among others, by full involvement in the revitalization process of the 3rd Complex of the Lodz Special Economic Zone at ul. Tymienieckiego 22/24. A few zone companies are conducting their business in an area of approx. 13 ha, where the head office of the Management Board of the Zone

July / August 2012

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The Complex „Centrum” of the Lodz SEZ at 22/24 Tymienieckiego St. / Photo: W. Stępień

is also located. The most important investment has been the adaptation and outward extension of the complex of post- industrial buildings of the 19th century Ludwig Grohman factory for the purpose of housing the offices and services of ŁSSE S.A., which began in December 2011. The project is a prime example of the revitalization of post- industrial areas in Lodz in order to construct modern office and cultural building complexes. A building complex, after adaptation and outward extension, will be used as the head office and conference, cultural and exhibition centre of the Lodz Special Economic Zone. Furthermore, office spaces to let for the companies working with the Lodz Special Economic Zone are provided for. Thirdly, the Education Zone is of key importance To meet the human resources needs of our investors and partners, we initiated the project „The Education Zone” in 2009, the main objective of which is supporting and pro moting vocational education. Vocational education To best match the professional qualifications of employees from the Lodz Region to the needs of potential investors already operating in the region, we work with institutions and establishments responsible for the education, c ounselling and vocational training of people already employed or unemployed. Our main goal is to boost vocational education in the region, which will result in an increase in the number of low- and mid-level technical personnel. So far, as part of supporting vocational education, we have started to work with many education establishments and institutions.

July / August 2012

The 19th century Ludwig Grohman factory

Collaboration with the Teacher Training and Practical Education Centre in Lodz In cooperation with the Teacher Training and Practical Education Centre in Lodz we conducted a research survey among the investors of the Lodz Special E conomic Zone with respect to employment trends on the local job market, their employment plans and evaluation of the vocational education of graduates from the Lodz Region. At the invitation of the Teacher Training and Practical Education Centre in Lodz and the Lodz Special Economic Zone, Zone investors participate in meetings with parents and junior high school students from Lodz, during which the benefits of vocational education and prospects connected therewith are presented. We are planning to expand our collaboration with the Teacher Training and Practical Education Centre in Lodz as regards the organization of conferences, workshops and seminars concerning thematic and problematic areas of the job market, education and the social and economic situation of the Lodz Region.

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Collaboration with the Lodz University of Technology and the Foundation of the Lodz University of Technology In appreciation of the academic achievements and contribution to the education of new personnel by the Lodz University of Technology, we have established a scholarship fund for the exceptionally talented students of the Lodz University of Technology. The project of the revitalization of post-industrial areas in Lodz / Source: Lodz Special Economic Zone

Collaboration with the Headquarters of the Voluntary Labour Corps The aim of working with the Headquarters of the Voluntary Labour Corps is a joint activity for the benefit of investors and p artner companies in the Lodz Special Economic Zone ,i.e. vocational training and education for entrepreneurs’ employees and management staff as well as assistance in making contact with people ready to start a job offered by employers located within the Zone. Collaboration between ŁSSE S.A. and the Marshal of the Lodz Region This collaboration is mainly aimed at c urbing the problem related to the adaptation of the educational portfolio to the local job market, i.e. the implementation of different kinds of training courses as required by the investors and partners of the Lodz Special Economic Zone as well as establishing contacts with employers. Close collaboration with the Public College for F urther Education in Modern Technologies in Lodz The collaboration with the Public College for Further Education in Modern Technologies in Lodz is intended mainly to create dedi cated faculties, according to requirements as deemed necessary by the investors of the Lodz Special Economic Zone. The College has already opened two faculties addressed to the needs of investors of the Lodz Special Economic Zone, such as Procter & Gamble, Haering Polska, Ceramika Paradyż, BSH, etc. Higher education In order to support the Lodz Region – one of the largest academic centres in the country – we work with higher education institutions, participate in student activities and initiatives aimed at encouraging young people to pursue university studies and plan their future in Lodz.

Collaboration with the Lodz University of Technology on the project „Science for practice, practice for science” The aim of our cooperation is the efficient interaction between the world of science and b usiness through diploma projects as required by the entrepreneurs and appropriate adaptation of the higher education curriculum to the expectations of the Lodz Region employees. The contribution as well as involvement of the Lodz University of Technology and regional entre preneurs in the training and professional development of students will help to achieve the graduate profile desired by the local job market. Collaboration with the Academy of Social Sciences We have become a partner of a new post-graduate study course „PR Professional”, m ainly aimed at helping students to perform PR activities for mostly SME entrepreneurs. Partner of numerous initiatives under the program „Youth in Lodz” We regularly participate in initiatives under the program „Youth in Lodz”, mainly aimed at encouraging young people to study in Lodz and increasing the number of candidates for the faculties preferred by the employers in the region. We have also funded a scholarship for a student of the M edical University, accepted a student of the Lodz University of Technology for a summer internship and chosen the most interesting film promoting Lodz as the best place to study. In 2012, we will be involved in a competition for the best business plan „I Have an Idea for Business” and a gain in the initiative „Practice in Lodz – summer internships”. Fourthly, the Art Zone is of key importance and we remember about the Grohmans The program Art Zone was established in 2008 in order to support the initiatives related to culture and art. Our mission

July / August 2012

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Signing an agreement about technical education with the Marshal of the Lodz Region

Business Gala 2011

is to integrate the world of b usiness and culture. We would like to propagate the idea of patronage of the arts using the example of the 19th century factory owners in Lodz. The revitalized building of a former water pump station located in the area of the Complex Centre of the Lodz Special Economic Zone at ul. Tymienieckiego 22/24 has become not only the venue for art previews, a uctions, concerts and education workshops, but also business meetings and conferences. We work with a rtists, cultural practitioners and other entities dealing with the development of culture and art, such as associations and foun dations. Events aimed at social education through art are also organized within the scope of activities in the Art Zone.

dures ensuring efficient operations within the Zone, and a high level of staff involvement in the achievement of quality goals and continuous pursuit of work optimization.

The year 2012 (15th anniversary of the Lodz Special Eco nomic Zone) is the Year of Fine Arts in the Art Zone. F ollowing the example of Henryk Grohman – the most eminent art donor in Lodz and one of the founders of industrial Lodz – we would like to encourage entrepreneurs to invest in art and hence support talented artists.

The Partners include companies representing different types of business related to provision of services useful to our investors, starting with the building and consultancy industries, through personnel advisory, architecture and supervision, utility suppliers, etc. Our partners offer professional services, experience and leadership in their industries.

For the first time this year, the Lodz Special Economic Zone was granted the Henryk Grohman award – a statuette made by Zofia W ładyka, a well-known artist – for the Investor- Sponsor of the year within the field of culture.

Seventhly, good relationships with Investors; this is how we conquer Poland and the world

Fifthly, quality is not accidental In 2006, we were the first Special Economic Zone in Poland to achieve ISO. We still hold the system quality management certificate in compliance with the EN ISO 9001:2008 requirements. The high standards of our services are confirmed by the title „Quality of the Year 2011” awarded in the largest pro-quality contest in Poland. Experts from the Polish Centre for Testing and Certification appreciated the efficient implementation of the adopted quality policy, and a positive opinion of the activities performed by the Zone was expressed by the e mployees and social environment, clarity of the implemented proce

July / August 2012

Sixthly, the Partner Program for the best The Partner Program brings together companies recommended by the Lodz Special Economic Zone and promotes them among Zone investors as reliable and trustworthy business partners. Its main goal is to help the Partners to reach out to current and potential investors and to help them develop their business.

In 2012 Lodz SEZ was recognized as the 3rd zone in Europe Region and 18th zone in the world by „Financial Time” fDi Global Freezones of the Future 2012/13. In 2008, 2010 and 2011, the Lodz Special Economic Zone was the most positively evaluated economic zone in Poland by investors – according to KPMG reports „Special Economic Zones. Edition 2008, 2010, 2011”. As of autumn 2011, the Lodz Special Economic Zone became the partner of FashionPhilosophy Fashion Week Poland for the next three editions. The halls of the Lodz Special Economic Zone have been visited by the w orld’s fashion crème de la crème. It is the most prestigious event promoting fashion in Poland. Owing to the brand of the festival we will be able to reach potential investors even more effectively.

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Eighthly, we know how to obtain EU funds

At the end of 2011, the original project developed by the Lodz Special Economic Zone „Lodz Region – a tailor-made business zone” obtained EU funding within the scope of promoting regional products and „brands” under the R egional Operational Program of the Lodz Region for the years 20072013 for the first time in the history of the Company. The aim of the project is to create a positive image of the brand „LODZKIE” and promote the investment potential of the region. The total value of the project is nearly one m illion Polish Zlotys, whereas the amount of funding under the Regional Operational Program of the Lodz Region is PLN 680,000.

Economic Zone may subscribe to the newsletter available in two versions. The following two websites are completely new: an interactive map of investment land (mapa.sse.lodz.pl) and a real estate web portal of the Special Economic Zone (www. posrednictwo.sse.lodz.pl). The map includes a descri ption of 30 available parcels of investment land belonging to the Lodz Special Economic Zone along with all the nece ssary information (including Site Check List of land, its use according to the local zoning plan or technical infrastructure diagram). Additionally, in April 2012, we opened a website on which we procure the sale of real estate. Currently, we have nine investment offers of land with an area of 1.3 to 23 ha. Eleventh, investments have exceeded 9 billion Polish Zlotys Chart 1. Investment expenditure in millions of Zlotys

After June 15, 2012, by scanning this photo code, you will be able to learn more about the EU project. Ninthly, we are happy when others appreciate our work In 2011, the Lodz Special Economic Zone received the title „A Point for Lodz” for the Art Zone program and resto ration of the water pump station as an initiative having a positive impact on the image of Lodz; Business Gala 2011 – the title awarded to the Lodz Special Economic Zone as an institution promoting entrepreneurship; In 2004 the Committee for European Integration as well as Business Centre Club awarded the European Medal to the Lodz Special Economic Zone for winning investors and rendering services for Lodz and the region thereto; In 2004, the Governor of the Lodz Region awarded the Economic Award for the contribution to economic development of the Lodz Region.

Source: Lodz Special Economic Zone

Twelfth, our investors have created nearly 25,000 jobs

Chart 2. Workplaces

Tenthly, we provide good offer and modern tools The Lodz Special Economic Zone website (www.sse.lodz. pl) has been updated several times in recent years. We w ould like to make it our showpiece and compendium of the company. It is especially important due to the fact that the website is visited by 200 thousand visitors each year (data for 2011). Therefore, the basic information is available in English, German, Italian and Chinese. Anyone who would like to stay updated on the latest information about the Lodz Special

Source: Lodz Special Economic Zone

July / August 2012

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A new building of Ericpol in Lodz designed by Cracow architects from HORIZONE Studio (view from Sienkiewicza St.) / Source: Ericpol

Thirteenth, we have already issued over 200 permits Chart 3. Number of permits issued (cumulative)

Source: Lodz Special Economic Zone

Fifteenth, we are aware of the power of (social) media Our new investments, CSR activities, events related to the activities of the Lodz Special Economic Zone and the Lodz Region may be followed on our profiles on social network sites. We warmly invite you to join us! Facebook Fan Page of the Lodz Special Economic Zone – www.facebook.com/LodzkaSSE Łódzka Specjalna Strefa Ekonomiczna Lodz Special Economic Zone Twitter Account of the Lodz Special Economic Zone – www.twitter.com/#!/StrefaLodz LinkedIn Account – Lodz Special Economic Zone Google + Profile – Lodz Special Economic Zone YouTube Channel of the Lodz Special Economic Zone – LodzkaSSE

Fourteenth, we invest into our property Lodz Special Economic Zone Chart 4. Expenditure on infrastructure and territorial development (in millions of zlotys)

ul. Ks. Tymienieckiego 22/24, 90 349 Łódź, POLAND phone: (+48 42) 676 27 53, 676 27 54 fax: (+48 42) 676 27 55 info@sse.lodz.pl , http://www.sse.lodz.pl/ mapa.sse.lodz.pl ; www.posrednictwo.sse.lodz.pl

Source: Lodz Special Economic Zone

July / August 2012

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Łódź office market

Supply With its office space stock totalling around 233,550 m2, Łódź is one of the six largest regional office markets in P oland including also Kraków, Wrocław, Tricity, Katowice and P oznań. Most of its office buildings are located along the main thoroughfares of the city centre: Piłsudskiego, P omorska, Północna, Kościuszki, Wólczańska, Tymienieckiego and Rydza Śmigłego streets. Such office space concentration is typical of markets at an early stage of development. The major office buildings in Łódź include Sterlinga Business Center, Green Horizon, University Business Park and Piłsudskiego 22 (the headquarters of Infosys). A characteristic feature of Łódź is the large number of post- industrial facilities dating back to the 19th and 20th centuries, and office buildings from the 1970s which have been revitalised and converted into modern offices such as Zenit, Synergia, Red Tower and Orion. The first phase of the Teofilów Business Park (8,700 m2) and Rossmann’s headquarters (7,600 m2) came onto the market in the past twelve months. The only scheme currently under construction by Skanska Property Poland is the two-phase Green Horizon complex, which will provide 34,000 m2 and increase the total modern office space stock in Łódź by 14.60%. Although the first phase of this development is still under construction, it has already been over 95% let. Infosys, which will move into its new office this year, will take up 15,000 m2.

July / August 2012

Chart 1. Stock and future supply in regional cities 800 000 m² 700 000 m² 600 000 m² 500 000 m² 400 000 m² 300 000 m² 200 000 m² 100 000 m² 0 m²

Krakow

Wrocław Existing

Tricity

Katowice

Poznań

Under construction

Łódź

Planned

Source: Cushman & Wakefield, Valuation & Advisory, January 2012

„Łódź is a city representing considerable growth p otential, with an rising number of foreign investors locating their business there. We decided to develop the Green Horizon office scheme in order to be able to offer modern office space, which is still scarce in Łódź, to companies opera ting in that market. The quick commercialization of the first Green Horizon building proves that demand for quality office space remains considerable in Łódź. We are in advanced negotiations with tenants interested in space in the second Green Horizon building. Like all our projects, the scheme is developed in line with sustainability principles and is already LEED-precertified”, said Arkadiusz Rudzki, Leasing and Asset Management Director with Skanska Property Poland.

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July / August 2012

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Map 1. Office space concentration in Łódź

Source: Cushman & Wakefield

Owing to the immaturity of the Łódź office market, any larger development may significantly change the supply and d emand balance. Since 2009 the construction of many p lanned buildings has been postponed due to the high v acancy rates and difficulties with obtaining financing for d evelopment projects. However, the Łódź office market has been developing very dynamically since 2009 despite the limited supply of buildings available for lease. Alongside Katowice, Łódź is the fastest growing office market in Poland. The availability of lands in the city centre is high, which is a strong boost to pursuing new developments at reasonable prices. The total office space stock in Łódź is estimated to grow to around 350,000-370,000 m2 in the years 2012-2014 and reach the current level recorded in Wrocław and Tricity. Vacancy rates On account of its considerable volume of vacant s pace available for lease, the Łódź market is very competitive com pared to other Polish regional cities. Despite several major

t ransactions in the first half of 2012, the vacancy rates fell by just 1.5% to 20.5%, which was largely due to the delivery of 8,730 m2 of office space at the Teofilów Business Park (BZ WBK and BZ WBK TFI) in the second half of 2011. Łódź has had the highest vacancy rates in Poland since 2009. The existing buildings offer around 46,000 m2 of vacant space, 78% of which is in two buildings. A straight majority (65%) of vacant space is available at the large University Business Park complex, which broke ground before the 20082009 crisis. This complex is being successively let, but it has p ushed the vacancy rate high due to its size. A round 13% of vacant space is at the Teofilów Business Park, which came onto the market in the second half of 2011 and has not been fully leased yet. The remaining vacant space of around 10,000 m2 is scattered among many other office buildings in Łódź. Therefore, despite the high vacancy rate, tenants looking for space of over 3,000 m2 can choose only between two buildings in the next six months. The market outlook for the next twelve months looks brighter as new office space will be made available at Piłsudskiego 22 (the current headquarters of Infosys) and the second phase of the Green H orizon complex. Demand In 2011, the gross take-up in Łódź reached around 39,175 m2; most of this, or 88%, was under new leases. The largest transaction was the lease by Infosys BPO Poland of 15,000 m2 at the Green Horizon complex, which is due to be completed in October 2012. In 2010, the transaction volume on the Łódź market reached 30,300 m2. New leases accounted for 88% of all deals made in Łódź in 2011 with renewals (no additional space leased) accounting for only 12% of total transactions. Compared to Łódź, the larger office space markets in Poland such as Wrocław and Tricity did not record any significant rise in deal volumes. Excluding renegotiations, the figures would even be lower.

100000

88 430

2,0

81 373

Chart 3. Gross take-up for office space in 2010 and 2011

Chart 2. Office space provision (m2 per capita)

Gross take-up 2010 (m²)

20000

Warszawa Krakow Wrocław Poznań Trójmiasto

Source: Cushman & Wakefield

July / August 2012

Łódź

Katowice

Krakow

Wrocław

Source: Cushman & Wakefield

Tricity

Poznań

39 175

30 301

48 686

37 209 Katowice

18 199

0,5

18 533

21 350

40000

42 990

42 999

60000

1,0

47 850

80000

1,5

0,0

Gross take-up 2011 (m²)

Łódź

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Rental levels Prime asking rents in Łódź reach EUR 13-14 m2/month while in older buildings which have been renovated or adapted to modern standards they stand at EUR 11-13 m2/month. Rental levels are expected to remain stable given the growing demand and the current vacancy rates. This is likely to boost demand, because Łódź is the most attractive market in Poland in terms of rental levels.

The demand structure in Łódź is characteristic of cities at an early stage of development. As in Katowice, the Łódź market is heavily dependent on external demand with most tenants being international corporations investing in new service centres from the BPO/SSC sector. Companies such as Infosys, Tate & Lyle, Rule Financial, HP, SouthWestern and Fujitsu have very strict requirements and tend to expect lease standards common in Western Europe or the United States, where their headquarters or decision centres are located. Smaller local companies tend to lease offices of 100-500 m2 and frequently accept lower standard, but they too will start looking for more efficient or higher standard space. Tenants are already making an increasing number of inquiries, but leases are unlikely to be signed very soon due to the nature of the office market. The demand for office space in Łódź is projected to rise. Companies operating in Łódź will continue to develop their services, which will make this market more attractive to both new investors from the BPO/SSC sector and office space developers.

Companies leasing large spaces can negotiate considerable rent discounts, longer rent-free periods of usually between two and six months or greater fit-out contributions. The pool of non-rent incentives is not strictly determined and is adjusted to the size and type of tenant. Service charges stand at PLN 12-16 m2/month. Green building Green building has been increasingly popular in the recent years. Skanska is the market leader in green building in Łódź and its LEED certified Green Horizon scheme is another environmentally sustainable development of this company in Poland. Skanska also takes great effort to raise ecological awareness of its tenants and the market. Hines has also used environmentally friendly technologies at its Sterlinga Business Center and obtained a BREEAM certificate. More and more tenants consider the technological advancement of buildings, including the possibility of reducing energy consumption. This fits in with both the policy and savings strategies of many corporations. Market outlook

Factors which enhance the competiveness of Łódź include the following: relatively low labour costs, lowest rents, easy access to educated workforce, good transport connections by road (the A2 motorway) and rail (mainly the fast connection with Warsaw), and the growing number of air connections. This year’s highlight was the opening of the A2 motorway, which will greatly improve communication with Warsaw and encourage many institutions to shift their offices from Warsaw to Łódź. „Like in any big city there are locations considered optimal, in the same way Łódź enjoys a desirable, central location in Poland, with convenient access to road, rail and air infra structure. That, combined with access to well-educated staff, creates favourable conditions for business growth, in cluding the sector of modern business services, with its high requirements in terms of office space quality. I am optimistic about further growth of the Łódź office property market, and my optimism is based on solid and rational factors”, said Waldemar Olbryk, President of Skanska Property Poland.

The volume of vacant office space in Łódź is expected to decrease gradually in the short-term perspective. However, due to the small size of this market, any new development coming on stream will naturally push the vacancy rates up for some time. Łódź is projected to continue to have the lowest rents in Poland. Rents may begin to rise only when Łódź runs short of vacant space or its office space stock exceeds 400,000 m2. ▄▀

Author: Krzysztof Misiak Associate, Office department Cushman & Wakefield

July / August 2012

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Business Garden Warszawa 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 comp rising seven buildings to deliver 90 000 m2 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-ofthe-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 Róg ulic Żwirki i Wigury i 1 Sierpnia 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 business to prosper. Green Horizon – just as all other p rojects of the Skanska Group – will obtain the prestigious LEED and GreenBuilding certificates, awarded only to the greenest buildings. 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 motorway 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.

July / August 2012

GREEN HORIZON ul. Pomorska 106, Łódź

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.

zdjęcie

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

Grupa Inwestycyjna Hossa SA

zdjęcie

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

zdjęcie

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

Name

Space: Location: Contact:

Name

Investor

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

reklama@outsourcingandmore.pl Space: Location: Contact:

Space: Location: Contact:

Name

Space: Location: Contact:

Investor

July / August 2012

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Łódź Regional Park of Science and Technology The Lodz Technopark is committed to facilitating advanced technology transfer from science to business. We want to ensure that innovative solutions enter the market. We are also dedicated to creating the most growth-conducive envi ronment for local entrepreneurs involved with innovation and new technologies. An important aspect is the building of a knowledge-based economy through strengthening the cooperation of science and business. The Lodz Technopark is a place of “good address” for both high-tech start-up and technologically advanced enterprises, which could be a market success pattern for early-beginning businessmen. Lodz Technology Incubator: Our offer is addressed to newly established high-tech com panies. Lodz Technology Incubator was created in order to give them the best conditions for development. Here they can reduce their initial costs and focus their activities exclu sively on creating business solutions, improving services and searching for clients.

Since the start of its operations, Łódź Technology Incubator has supported a total of 51 companies, of which 16 are still in the incubation process. Many of them have had significant success. They have won many pre stigious awards, such as the Governor’s Business Award of Lodz, Lodz Mayor’s Award, the title of the L eader of New Technologies and the National L eader of Innovation.

Offer For Investors: Lodz Technopark offers land investment under business. The area has been divided into 22 commercial lots of different sizes, which can be leased. All the lots are included in the local land development plan, in accordance with which they are zoned for low impact commercial and industrial development (light manufacturing and services) and hotel infrastructure.

The incubation period is 2 years. The company shall receive, thanks to the de minimis aid, favourable conditions of rental a modern equipped office with Internet access. Companies that join entered ŁIT will have also legal, accounting and mar keting consultancy, promotion on the Technopark website and PR activities related to dissemination of information about company`s products.

The area is fenced and equipped with the following utilities: water, electricity, sewage and natural gas. There is a possibility to extend this connections. Adjoining plots can be linked at will. A permissible height of buildings is 16 m. Indyvidual Medical Implants Lab: It provides medical consulting services and offers image processing in the field of diagnostic imaging (computed tomography, magnetic resonance imaging) and the creation of virtual models of various anatomical structures and patho logical changes.

July / August 2012

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This process can included such pathology as bone tissue defects, tumors and vascular anomalies (aneurysms, vas cular malformations). Next, on the basis of these virtual models three-dimensional physical models can be built using a precision rapid prototyping technique. This operating method is clinically more effective, while signi ficantly reducing the need for reoperation, and considerably reduces recovery time and largely eliminate the risk of any complications.

B. The Industrial Biotechnology Laboratory, where technology solutions will be developed for the produ ction of new or refined unique enzymes, as useful instruments for food, textile, chemical, pharmaceutical, paper industry, as well as, biofuel production. In addition to this the laboratory will research new products such as: biomaterials, enantioselective chemicals, nutrace utics, prebiotics and cosmeceutics.

Both of the laboratories will provide research services for micro, small, and medium busi nesses, as well as research-science institutes. Thus, Polish entrepreneurs will have the oppor tunity to do research at every s tage of their product or tech nology development. BioNanoPark will be able to CERTIFY products in these two labs in accordance with EU guide lines, which will increase its competitiveness. ▄▀

In the autumn 2012 we are opening the most modern development centre for business in this part of Europe – BioNanoPark. It will consist of: 1. Extended Łódź Technology Incubator with: office spaces for 50 new companies, 4 office-laboratory modules for spin-off and spin-out companies, conference room for 300 participants, buffet providing catering for conferences, foyer providing exhibition space. 2. The following laboratories: A. The Molecular and Nanostructural Biophisics Laboratory, which will conduct research on the influ ence of nanomaterials on human health and the en vironment. The laboratory will also investigate new, inexpensive generic drugs and therapeutic agents, as well as determine the biocompatibility of materials for biomedical applications.

Contact: Łódź Regional Park of Science and Technology Ltd. Poland 93-465 Łódź, 114/116 Dubois Street tel: (+4842) 684 44 44 fax: (+4842) 684 50 00 e-mail: biuro@technopark.lodz.pl www.technopark.lodz.pl

Author: Joanna Jagas Marketing Specialist Lodz Regional Science and Technology Park Ltd.

July / August 2012

Poland vs Outsourcing | Report

Telecommunications networks in Łódzkie voivodeship Foreword In April „Strategy of Integrated Development of Łódź 2020+ - Strategic Diagnosis of Łódź1”. was posted in the w ebsite of Łódź City Hall. In the section pertaining to the SWOT analysis, the weaknesses included an entry “low coverage of the City with broadband Internet access”. In the Strategy of łódzkie voivodeship for years 2007–2020 posted in the w ebsite of the Marshall’s Office2, in the SWOT analysis one can find the following conclusion “unsatisfactory state of telecommuni cation infrastructure and IT coverage in the region”. From the standpoint of Investors, development of innovative branches of business, BPO services market, the existence of well- developed, broadband telecommunications infrastructure is one of the primary elements determining the possibility of executing investment projects in the voivodeship. During several visits of prospective investors, while being invited by the Investor Service Office as a person operating in the local telecommunications market and one familiar with it, I have always heard the basic questions “How does access to broadband optic fiber networks look like in Łódź – voivodeship” and “Whether there are two independent tele communications lines based on optic fibers available in the given locations”. Unfortunately, even in the www.bpo.lodz. pl website a prospective Investor – company – will not find information whether he or she could have difficulties in terms of access to modern telecommunications technologies when locating production, services in Łódź voivodeship.

from June, 2011 published in OEC website3. The said report is the first detailed document showing the s tate of telecom munications networks in Poland. At present, p reparations for publication of the second edition of the report are underway. The aforementioned report shows the state of infrastructure including investments in broadband networks realized in 2010 and planned for 2011 in such areas as:

completion of optic fiber networks, telecommunications network nodes, access nodes, range of operation of cable and wireless networks, penetration of cable connections or wireless terminals in buildings, occurrence of cable connections or wireless terminals in buildings with residential premises, presence of buildings allowing collocation.

Is it really so bad in terms of access to broadband net works in the voivodeship and in the city, that we do not have anything to be proud of? Were Investors, entrepreneurs forced to cooperate only with Telekomunikacja Polska, now ORANGE? Let us check that out. A bit of information from OEC (Office of Electronic Communications) In the beginning, I decided to analyze the Report of the Office of Electronic Communications entitled “Report on coverage of the territory of the Republic of Poland with the existing tele communications infrastructure, investments and buildings allowing colocation realized in 2010 and planned in 2011” 1 www.lodz.pl 2 www.lodzkie.pl

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3 www.uke.gov.pl

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The aforementioned data may be used for various purposes by specific clients from the market: Telecommunications operators – source of information to make decisions on new investments, reconstruct the existing infrastructure, potential of the market. Investors – attractiveness of location from the point of view of availability of broadband networks and the possibility of execution of telecommunications services. Self-governments – brief of operations and allowing for data in the region’s attractiveness plans. Consumers – possibility of selecting the most attractive market offer. Łódzkie voivodeship is in third place in Poland in terms of the number of towns, just behind mazowieckie and wielkopolskie voivodeships. As it stems from the published report (Chart 1), only in circa 8% of towns in the voivodeship operators and territorial self-government bodies have terminals of their own optic fiber networks, and in more than 88% of the said towns a single telecommunications entrepreneur has such a terminal. To compare, in Major Poland, 17% of towns have network terminals, and in more than 83% of towns these are terminals of a single TE4.

Dolnośląskie Kujawsko-Pomorskie Lubelskie Lubuskie Łódzkie Małopolskie Mazowieckie Opolskie Podkarpackie Podlaskie Pomorskie Śląskie Świętokrzyskie Warmińsko-Mazurskie Wielkopolskie Zachodniopomorskie 0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 100%

Number of cities with range of cable networks or radio terminals 1 or more PT Number of cities with range of cable networks or radio terminals 2 or more PT Number of cities with range of cable networks or radio terminals 3 or more PT

Source: Own elaboration

the range of cable and wireless networks amounts to nearly 100%, of which in 85% of cases only one TE renders its services. In the end, the range of penetration of cable and wireless networks in households and buildings. As one can see in Chart 3, łódzkie voivodeship has one of the lowest factors (only the eastern Poland voivodeships are lower than łódzkie) of building penetration.

Chart 3. Building penetration factor

Chart 1. Optic fiber network terminals

Chart 2. Range of cable and wireless networks

10%

20%

30%

40%

50%

60%

70%

80%

90% 100%

10%

Number of cities with terminal of an optic fiber network 2 or more PT

20%

30%

40%

Building penetration

Number of cities with terminal of an optic fiber network 1 or more PT

50%

60%

70%

80%

90% 100%

Residential household penetration

Source: Own elaboration

Number of cities with terminal of an optic fiber network 3 or more PT

Source: Own elaboration

Analysis of towns also seems to be quite interesting, as it shows the ranges of operation of cable and wireless net works. In łódzkie voivodeship there are 4610 towns, in which at least one telecommunications entrepreneur has declared its presence, which constitutes 90% of the whole area, and in more than 84% a single telecommunications entrepreneur renders its services (Chart 2). Referring to Major Poland – 4

A quick analysis of the said data allows concluding that at the present, łódzkie voiovodeship suffers from lack of broad band backbone networks, which is the base from which everything should start. In addition, one should consider the fact that the majority of networks in towns shown in the report is based on copper solutions, which make it impossible to realize broadband access.

Telecommunications Entrepreneur

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Poland vs Outsourcing | Report

In 10% of towns of the voivodeship there is no access to telecommunications services at all. Lack of an optic fiber grid makes it impossible to construct access networks, so-called “last mile”. As it stems from investments planned for 2011, telecommunications entrepreneurs intend to spend over PLN 1.5 billion on construction of broadband backbone and access net works, of which over 600 million is to be realized in w ireless 2G/3G technology. In 2011 in łódzkie voivodeship only 128 kilometers of optic fiber networks were created, 50% of which in such cities as Łódź, Piotrków Trybunalski and Tomaszów Mazowiecki. There are completely no investments in sub-urban and rural areas. In 2011, only PLN 55 million were spent of constru

In order to verify the potential of companies – telecommunications operators – in łódzki region, an inquiry about data and scope of possessed telecommunications networks has been sent to the majority of them. Only the following companies provided information: TOYA Sp. z o.o., Multimedia Polska S.A. and PLAY. This information is, however, public knowledge stemming from Table 1. Quantities of sold services (Data of PLAY as of the end of March 2012, Multimedia data at the end of May 2012 and TOYA – at the end of May 2012) PLAY

Multimedia TOYA 7 400 000

Number of clients

160 000

Analogue TV

50 000

Digital TV

19 000

44 000

Internet

30 000

85 000

Telephony

15 000

19 500

Pre-paid telephony

4 144 000

Post-paid telephony

3 256 000

Mobilny Internet

More than 1 000 000

400

the amount of sold services (Table 4). Only TOYA provided cities, in which it has its own broadband networks: Łódź, Piotrków Trybunalski, Kutno, Pabianice. Additionally, the Company sent information on its innovative services, such as 3G Television.

ction of access networks in łódzkie voivodeship, which constitutes 3.6% of the investment sum intended for networks in the country. Is it really that bad Probably not, if new investors come to the łódzki region, in particular to the area of the Special Economic Zone of Łódź, and the BPO services industry – especially using modern telecommunications services – is one of the strongest in the country. Of course, it is a fact that we are considering areas of cities and sub-urban areas, where access to operator networks is facilitated and competition relatively strong. Unfortunately, we are still talking about access to standard operator services, every non-standard inquiry of Investors pertaining to lease of transmission, making available fibers or active device installations (lease of centers) is connected with the need to realize special construction projects at the prospective Investors’.

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Table 1. Quantities of sold services (Data of PLAY as of the end of March 2012, Multimedia data at the end of May 2012 and TOYA – at the end of May 2012). Unfortunately, the provided data does not allow concluding much, therefore one needs to consider the results of data from the report published in the OEC website. Is it going to get better In order to answer this question, one should look at investment plans. The ones available in the OEC report covered 2010-2011 and were not very optimistic. Let us look at what is happening in Łódź market. MSDDI – Metropolitan Internet Access Network is executed by Łódź City Hall. It is a network connecting 80 points throu ghout the city, carried out by a consortium of companies Technitel Polska SJ and SPRINT S.A. in cable construction technology in the sanitary and rain sewage systems. The said network will be available to operators only after 5 years

Poland vs Outsourcing | Report

from the date of commissioning of the network (permanence period for projects realized from EU funds). On the other hand, however, access to electronic services rendered by govern ment bodies will improve, which in turn should improve Investors’ service quality. ŁRST – Łódź Regional Tele-information Network realized by the Marshall’s Office in the voivodeship. The “Łódź Regional Tele-information Network” project consists in creating a broadband network in the selected area (17 counties) of the łódzkie voivodeship in optic fiber technology, the scope of which covers a significant portion of the region. Within the frames of the project, a backbone network as well as a distribution network along with backbone nodes and distribution points will be created. The Investor is Łódzkie Voivodeship – the self-government of the voivodeship shall grant a p ublic order for construction of a network, which will become its property. After completion of the investment, the self-government shall entrust management of the network to a telecommunications operator, who will use it to render (on his behalf) telecommunications services. Construction of a broadband backbone-distribution n etwork in optic fiber technology will provide the citizens, public en tities and businesses from the selected areas of łódzkie voivodeship with the possibility to use tele-information ser vices and multimedia resources of information and electronic services at the highest level possible. In addition, the said network will allow efficient data exchange between self- governments, state administration bodies, education facilities, hospitals and other public institutions and between businesses.

Execution of the project of construction of Łódź Regional Tele-information Network will lead both to improvement of competitiveness of broadband Internet market by means of ensuring competition in the wholesale data transmission market and open access to passive infrastructure, as well as to increasing the level of knowledge, competences and awareness of the scope of use of the Internet and its benefits among the inhabitants of the łódzkie voivodeship threatened with digital exclusion. In the area of łódzkie voivodeship additionally large Infrastructural Operators operate, such as Exatel, Hawe S.A., Telekomunikacja Kolejowa, companies such as INFRATEL Operator Infrastrukturalny (ŁRST pilot network o perator and owner the optic fiber backbone network in Łódź, Zgierz and Ozorków realized e.g. based on own ground infrastructure – www.infratel.pl), which are capable of rendering data transmission services, fiber lease and service of projects covering delivery of solutions, including integration of specialized devices. It seems, that new Investors appearing in łódzki region will receive the highest quality services and telecommunications connections soon, and present investors will be able to use new, interesting solutions increasing their efficiency of operation. ▄▀

Author: Rafał Rodziewicz CEO www.grupatechnitel.pl

July / August 2012

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Centre of New Media Cinema and Television; National Film and Television School – London, England). This position will be maintained if the school’s technologies are adapted to the highest global standards. The building will serve for purposes related to the teaching process based on the latest digital technologies. Total area 5,957.30 m². Usable area 5,820.70 m ². Cubic capacity of the building 28,687.00 m ³. Designed and completed solutions: The main entrance area is accessible from the east, from the side of a historic hall and leads to a representative hallway. In the immediate vicinity of entrance units there are e mergency exit staircases. Designed and completed lifts will make it possible to move freely.

The activity of the Polish National Film, Television and T heatre School (PWSFTviT) carried out to date has been connected with teaching in the field of traditional media, in particular with film. For many years of the School’s operation the film technology has changed relatively slowly. The S chool’s infrastructure meets high global standards. However, in recent years a huge technological breakthrough in media can be observed. New, unknown so far areas of media a ctivities, described as “New Media”, are emerging. In addition, traditional media are rapidly changing the technologies of registration, replay and forms of broadcasting. The rapid technological progress calls for changes also in metho dology of teaching. The Polish National Film, Television and Theatre School (PWSFTviT) is the main and perhaps the only higher education school in Poland which can address these challenges. Qualified staff, prepared for new methods of work, is its potential. However, apart from the school’s human resources also a proper technical infrastructure is required such as a new building with equipment. It is worth pointing out that the current strong position of the Polish National Film, Television and Theatre S chool ( PWSFTviT) is underpinned with active cooperation and exchange of students and lecturers with leading European and global higher education schools which educate staff for the audiovisual industry (University of Austin, USA; INSAS – Brussels, Belgium; VGiK – Moscow, Russia; La Femis – Paris, France; Filmakademie Baden-Wurttemberg – L udwigsburg, Germany; The Hong Kong Baptist University, Department of

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The basement at the level (– 1) consists of stockrooms for archives, rest and refreshment rooms as well as technical rooms. Part of the rooms located in the basement from the south has access to daylight (depression). ▄▀

Description of floors: Basement. Archive of films, film copies and digital carriers, 17 classrooms and 22 technical rooms. Area 979.79 m². Ground floor. Ground floor consists of vestibules, halls, changing rooms, classrooms for the Digital and Analogue Photography Department, rest and refreshment as well as sanitary units, technical rooms, shafts for air-conditioning and ventilating installations, storerooms and 15 classrooms and 15 technical and passage rooms. Area 978.67 m². First and second floor. Multimedia studios, television Studio, audiovisual studios, classrooms with assembly halls and rooms for professors, rest and refreshment room (not for commercial purposes). First floor: 15 classrooms and 26 technical and passage rooms - area 1,071.10 m². Second floor: 28 classrooms and 14 technical and passage rooms - area 1,039.80 m². Third and fourth floor. Rooms for analogue and digital editing, animation and special photographs. Third floor: 29 classrooms and 15 technical and passage rooms - area 946.22 m². Fourth floor: 20 classrooms and 15 technical and passage rooms - area 886.22 m². All floors are accessible for the disabled in wheelchairs. They are linked with two lifts and two staircases which form a passageway.

Source: City of Łódź

Poland vs Outsourcing | Articles

EC1 View from south.

The New Center of Łódź The New Center of Łódź is an undertaking of a particular meaning for the City and region. This daring project will be an urban time machine in which the history and modernity pervade creating homogenous city substance – an icon on the cultural map of Europe. The project assumes creating in a downtown part of the City, in the area covering almost 90 ha between Tuwima, Narutowicza, Sienkiewicza and Kopcińskiego, a new center of culture, art and business. The area is divided into two zones: 30 ha – which will be devoted to cultural functions and 60 ha of commercial undertakings and prominent architectural objects. The most advanced project within the New Centre of Lodz is a project ’Revitali sation of EC1 and its adaptation for cultural and artistic pur poses‘ came into being. The project is co-funded by the European Union from the European Regional Development Fund and the City’s budget. Rob Krier, a Luxemburg architect, was invited to Łódź. He created the urban concept of the New Center of Łódź. The New Center of Łódź assumes modernization of the Łódź – Warsaw railway line, putting the Łódź Fabryczna railway station underground and creating High Speed Line, which in the first stage will connect Warsaw, Łódź, Wrocław and Poznań. On the released space, in the downtown of Łódź, the new center will rise. Its heart will be the Special Culture Zone with four streets: a Polish, a Jewish, a Russian, and a German one. The undertaking of the construction of the New Center of Łódź determines the chance not only for the local socie-

ty but also for investors, who would like to develop their activity in Łódź. Thanks to a brilliant localization, an attrac tive surrounding and efficient communication connections, the new part of the city is an ideal place for business. Apart from buildings of cultural function, housing and commercial – office s pace is planned. They may be located within the overground levels of the Łódź Fabryczna Railway Station, in parts of the Special Culture Zone and in the underground spaces connecting the railway station with the designed public space. Also the areas in the East part of the project remain open for investment – 34 hectares, where 22,4 hectares are intended for buildings, roads and high quality g reen public space – 5,8 hectares each. The project assumes concentration of services in the central part. The bordering areas, especially in the North and North-East part of the project, are desi gned for multi-family housing complexes with accompanying services. The North-West area will be a place of innovative investments of inter alia the University of Łódź. Described areas will become a new district of business. In 2007 the City Council of Łódź passed a resolution concer ning the project of ’Revitalisation of EC1 and its adaptation for cultural and artistic purposes‘. Also in 2007 The City Council of Łódź unanimously approved the New Centre of Łódź Programme. Agreements and arrangements concerning the common tender implementation and running the investment in the area of the New Center of Łódź have already been signed between the partners of the project: the City of Łódź, Po

July / August 2012

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EC1 West: The project architecture: Implementation Project Team Office of Investment „Fronton” sp. z o.o. The design team studio Miroslaw Wisniewski - Urbanistyka i Architektura Sp. z o.o.

lish railway companies (PKP SA, PKP PLK S.A.) and the Łódź V oivodeship. The arrangement concerning the com mon order for the feasibility study for the underground dia metric tunnel for regional, agglomeration, and High Speed Trains has been signed. The documentation of the feasibility study is in phase of reception. The results of the contest for the project of the Special Art Zone have been announced and a contract regarding design and author’s supervision over the Special Art Zone have been signed. The tender procedure for the first stage of the works concerning the multimodal, integrated communication tie was declared. The Mayor of the City approved spatial guidelines for the central part of the New Centre of Łódź. The Mayor’s Board passed a resolution concerning preparation of the Local Development Plan for the eastern part of the New Center of Łódź. The project of Revitalization of EC1 and its adaptation for cultural and artistic purposes‘ is being financed from two sources – the European Union funds and by the City of Łódź and has all the necessary permissions and decisions. Complex was transferred to the contractor who should com pleted, according to schedule, the work until the end of 2012. In 2010 City of Lodz, PKP PLK S.A. and PKP S.A signed an agreement on realization of investments „Multimodal Hub at Łódź Fabryczna Station”. Contractor is obliged to implement the project of a new railway station Łódź Fabryczna to the end of 2014. ▄▀

Materials: EC 1 Łódź – Miasto Kultury

July / August 2012

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“Youth in Łódź” Programme. Breadth of opportunities! The project is implemented through project initiatives, such as: the Internship and Training Portal, “Practise in Łódź!” – a programme for remunerative holiday internships, scholar ships for the best students founded by the employers, paying for student’s accommodation or for studying at extra faculties, “Your Career in Your Hands” trainings, the “I Have an Idea for a Business” competition, the “Meet Łódź Employers” initiative – a series of visits at companies located in Łódź, the “FreeDOM for Student” competition and pro motional campaigns to encourage young people to study in Łódź. The Internship and Training Portal (www.praktyki.lodz.pl) enables the registered Employers to place, free-of-charge, their announcements on available trainings and internships. Participation in the programme for remunerative holiday internships is a great idea to recruit an ideal trainee with only minimum involvement by a company – this is the ”Youth in Łódź” programme personnel who is fully responsible for promotion, recruitment and initial selection of candidates. Taking part in the scholarship programme (scholarships founded by the employers, paying for student’s accommodation and for studying at extra faculties) is a great way to reach “the best of the best”, i.e. the most active students at faculties chosen by the employer. By financing scholarships for students of the last semesters, employers are g iven a chance to promote its company among the best who, looking for financial recompense of their hard work, apply for scholarships under the “Youth in Łódź” Programme. Mr Wojciech Karpiński - Services Head Infosys BPO Poland with company’s scholar Mrs Martyna Borkowska - student of Telecommunications & Computer Science at the International Faculty of Engineering (The Lodz University of Technology) Photo: UMŁ

The “Youth in Łódź” [Młodzi w Łodzi] Programme is a comprehensive project to improve the quality of the local human resources. The project organisers, the Entrepreneurship and Jobs Promotion Office of the Municipality of Łódź and local universities and employers, encourage young people to stay in Łódź and to continue their professional careers and family life here. Another project’s objective is to increase the number of students at faculties preferred by employers. Both of the above will translate into better students quality and improved image of Łódź – as a city that supports the professional careers of youth.

Terms and conditions for awarding scholarships and for paying for student’s accommodation and extra faculties have been defined in Rules and Regulations – set up by the employers themselves in cooperation with the programme organiser. It means that it is the employer who specifies the exact conditions that a potential scholar must comply with, including as regards its specific knowledge, skills and experience. Rules and Regulations may also specify that a given scholar must ensure certain benefits for the founder, such as taking part in a training or an internship at the founder’s company or acting as a promoter of the founder’s company at the student’s university. In this case, the same as for holiday

July / August 2012

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internships, the promotion of scholarships and of the founders themselves and the recruitment and initial selection of candidates is ensured by the “Youth in Łódź” Programme personnel. The “Youth in Łódź” scholarship programme received a nation-wide recognition. It won the competition for the best scholarships (in the category Scholarship Programmes organised by the Regional Authorities) and was awarded the title “Good Scholarship”. Benefits of the free-of-charge trainings under the “Your Career in Your Hands” are twofold: they are a way to provide the students with a knowledge that is necessary when starting their professional life and they provide employers with valuable candidates – potential employees with knowledge that exceeds what is typically taught at universities. Similar benefits are available for employers who will take part in the “Meet Łódź Employers” initiative. This initiative consists of a series of visits at the Łódź companies. During those visits students experience, from inside, how the company operates and how the everyday company life looks like. The organisation of both initiatives above is ensured by the “Youth in Łódź” Programme personnel. The “Youth in Łódź” Programme Partners may also benefit from using the Programme information channels: the Internet

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site www.mlodziwlodzi.pl (visited by more than 8 thousand unique visitors every week) and the Programme newsletter subscribed by more than 3.5 thousand persons – to provide students and graduates with the information about recruitment campaigns and trainings and internships they offer and with any other important information on their companies. Become a Partner of the “Youth in Łódź” Programme! It really pays! ▄▀ For more information please visit: www.mlodziwlodzi.pl

Source: City of Łódź

Education vs Outsourcing | Report

Human Capital of the Łódzkie Region The Łódzkie Region is a medium sized voivodeship (province) which, in terms of population, is Poland’s sixth lar gest. According to data from the Central Statistical Office of Poland (GUS), there were more than 2.5 million people living there at the end of 2010. Łódź is the capital of the region and is among Poland’s three largest cities. The population of these cities is presented in Graph 1.

Among the higher education institutions, in Łódź are: university, 2 technical universities, 5 economics universities, medical university and 4 artistic colleges.

Łódź is becoming increasingly popular among investors willing to locate their business services centres in Poland, with the largest SSC/BPO companies already established in Łódź being Infosys, BRE Centre of Operations, Fujitsu Services, SouthWestern and Tate & Lyle. In 2011, according to the Association of Business Service Leaders in Poland (ABSL), there were 37 such centres employing 7,700 thousand people - 9% of the total number of people employed in the sector, meaning that Łódź’s share of the market has grown by 0.9% since 2009. Łódź was also one of the two cities where this share has grown over the last two years.

The University of Łódź has the largest number of stu dents enrolled and offers 37 degrees across 13 faculties, with a total of 134 specialities. In 2011, there were almost 9,000 graduates at UŁ. Since 2010, a partnership with the

The University of Łódź (UŁ) and Łódź University of Technology are the largest and arguably the most important universities in the city.

Table 1. Higher Education Institutions in Łódź State-owned 1. Grażyna and Kiejstut Bacewicz Academy of Music 2. Władysław Strzemiński Academy of Fine Arts 3. Leon Schiller Polish National School of Film

One of the key factors boosting Łódź’s popularity for SSC/ BPO centres is that it contains a well-qualified workforce and a high numbers of students.

4. Łódź University of Technology

Higher Education Institutions in Łódź

Private

According to GUS, there were 30 Higher Education Insti tutions in the Łódzkie Region in 2011 and the vast majority (23) of them were in Łódź, followed by the city of S kierniewice 4.

5. University of Łódź 6. Medical University of Łódź

7. Academy of Humanities and Economics 8. Salesian Higher School of Economics and Management 9. Social Higher School of Entrepreneurship and Management 10. Henryk Jóźwiak East-West Higher School 11. Higher School of Business and Health Sciences

Graph 1. The population of the largest cities in Poland at the end of 2010 2 000 000

12. Higher School of Health Education 13. Janusz Chechliński Higher School of Finance and IT 14. Higher School of Informatics 15. Higher School of Commerce

1 500 000

16. Higher School of Marketing and Business 17. Higher School of Pedagogy

1 000 000

18. Higher School of International Studies 19. Higher School of Art and Design

500 000

21. Higher Vocational School of Łódź Educational Corporation Katowice

Lublin

Szczecin

Gdańsk

Source: Hays elaboration based on BDL, GUS

Poznań

Wrocław

Łódź

Kraków

Warszawa

20. Higher School of Hotel Studies and Tourism

22. Franciscan Higher Clerical Seminary 23. Higher Clerical Seminary Łódź Source: City Council

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Education vs Outsourcing | Report

niversity of Lyon has seen UŁ expand its offering to include U two degrees conducted in French (Management and French Law). The University of Łódź has embarked upon a project to offer a postgraduate degree entitled “Organisation and Mana gement of SSC/BPO Centre,” unique to the whole country. Łódź University of Technology is the largest technical univer sity in the region and offers 33 degrees, with more than 120 specialisations across nine faculties. In 2011 over 20,000 students attended the university. All the courses organised by the university’s ‘Centre for International Education’ insti tution are offered in English and French.

From the figures Łódź appears to be a particularly good location for Accounting & Finance Centres eager to employ economics graduates. Another group employable in Centres – especially those with R&D functions – are engineering gra duates. The number of people gaining degrees in Łódź in this field has been growing over the last couple of years and this positive trend is presented in Graph 3. A particularly significant growth was observed in 2011 whene the first generation of students graduating from courses subsidised by the Ministry of Science and Higher Education entered the job market. The Knowledge of Foreign Languages

University graduates in Łódź According to GUS there were 95,417 students in Łódź in 2011, with 25,878 individuals graduating in the same year. Graph 2 displays the share of graduates according to their field of study. The highest number of people graduated with economics and administration degrees. In 2011 almost 6,250 people gradu ated with degrees in these fields, equating to around 25% of all graduates in Łódź. Graduates with teaching (pedagogical) related degrees also account for a large share of the degrees gained (18%) and there are also a high n umber of medical studies graduates, especially at the Medical U niversity of Łódź. The number of economics, IT and engineering graduates is particularly important for SSC/BPO investors as these are the type of processes serviced by the centres located in Poland.

In 2010, the Polish Agency for Enterprise Development (PARP) started a project entitled ‘Study of Human Capital in Poland’. As part of the survey students were asked about their foreign language capabilities. The results are presented in Graph 4. Over 90% of students in Łódź speak English according to the data presented in Graph 4. The second most popular language is German – 39.8% of students declared that they have at least a basic grasp of it. Other popular languages are Russian and Spanish, which are spoken by 11.8 % and 7.3% of students respectively (Łódź students’ knowledge of Spanish is higher than the national average, which is 6.4%). Of those students surveyed, 7.9% of can speak French and a number can also speak languages from Scandinavia and the Far East. Fluent knowledge of foreign languages, including the niche ones, is one of the most important criteria for employing people in the SSC/BPO sector. Therefore it is not surpri-

Graph 2. Graduates in Łódź in 2011 according to the finished major Graph 3. Number of engineering graduates in Łódź economics and administration 6231 25% pedagogical 4553 18%

1500

1418

social 2585 10% humanities 2469 10%

1200

medical 2359 9% engineering and technical 1418 6% information 1370 5% artistic 919 4% physical 542 2%

900

756

808

892

906

940

2007

2008

2009

1007

600

services to the public 510 2% biological

506 2%

300

architecture and construction 383 2% mathematics and statistics 331 1% law 305 1%

Source: Hays elaboration based on BDL, GUS

July / August 2012

2005

2006

Source: Hays elaboration based on BDL, GUS

2010

2011

Education vs Outsourcing | Report

Graph 4. The knowledge of foreign languages among students in Łódź 100

92,1%

sing that, according to a survey conducted by Hays Poland, 100% of SSC/BPO employees in Łódź speak English. The results of the survey are presented in Graph 5. The knowledge of Dutch and Swedish among SSC/BPO employees is high (5.9% and 3.9% respectively), especially when compared to the average for Poland.

80 60 39,8%

40 20

11,8%

English

German

Russian

7,9%

6,4%

French

Spanish

2,1% Italian

Source: Hays elaboration based on BKL – 2010

Graph 5. Knowledge of foreign languages among SSC/BPO employees in Łódź

The answers from SSC/BPO employees to questions regar ding primary methods of learning a foreign language provide some interesting insight. The majority of respondents listed courses at schools or universities as the primary source of language knowledge, with courses offered by language schools taking second place. These were especially popular among people aiming to learn Spanish. In contrast, in the case of people studying Russian, the courses offered by uni versities were the only method mentioned. Data regarding the methods used to learn a foreign language are presented in Graph 6. Conclusions

100

Human capital is one of the key elements to be taken into consideration when undertaking any serious investment. This is particularly true in the SSC/BPO sector, especially for knowledge-based processes which will only develop in an environment that is rich in talented and well-educated individuals.

80 60 40 20

n lia O

lan

Ita

br ew

ish

ed Sw

ish

Fr en

ian

ss Ru

m er

ish

Source: Hays Poland Survey

Graph 6. The methods used to learn a foreign language among SSC/ BPO employees in Łódź classes in school / college 54,5% language school 22,3% self-study 8,9%

That’s why the Łódzkie Region has great potential. With the various institutions of higher education in Łódź providing a round 20,000 graduates per year, (a quarter of which are economic specialists and 90% possessing a good k nowledge of English), and a significant number of experienced SSC/ BPO employees (over 7,700), the Łódzkie Region gives an exceptional development opportunity for SSC/BPO centres, particularly those specialising in financial processes. ▄▀ Hays Poland Sp. z o.o. Lumen Złote Tarasy ul. Złota 59 00-120 Warszawa info@hays.pl www.hays.pl

private lessons / tutoring 7,1% foreign Travel 6,3% language courses abroad 0,9%

Source: Hays Poland Survey

Authors: Jadwiga Naduk Head of Market Research & Consultancy Hays Poland

Tomasz Szreder Analyst Hays Poland

July / August 2012

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University of Lodz for Employers The biggest state university of Lodz – the University of Lodz – is not only a place where theoretical knowledge is spread. It is an institution that aims at creating specialists in v arious fields by means of functioning on the basis of a defined strategy focused on the development of students, which is in agreement with the business expectations. A closer look at an expansively developing BPO sector which the University of Lodz meets halfway, presents to the readers of Outsourcing&More changes in programs and education quality as well as additional methods of self development being offered to the students – potential candidates for the BPO sector employees. The University of Lodz accepted the challenge to create strong relations with the business surrounding to provide a widespread transfer between the science and the busi ness. That is why the „University of Lodz for Employers” pro gram focused on employers, entrepreneurs and business was s tarted. The aim of the program is to create such areas of cooperation between the university and the entrepreneurs that will help in raising the quality of students education and will have a real impact on the development of knowledge- based innovation economy.

„Practice for science, science for practice” „Practice for science, science for practice – pilot project of internships for scientific employees in companies” realized as a part of POKL/I/8.2.1/10, Support for cooperation between the sphere of science and enterprises. Trainings for 48 representatives of the academic staff and companies repre sentatives as well as organization of a one-month internship in companies for the identification of a potential diploma thesis spheres were the key elements of the project. The internships took place in the biggest companies acting in the region: Agora, Amepox, „Fala” Aqua Park, BRE Bank, Bank Zachodni WBK, Cebal Tuba, CWS - boco, Delia C osmetics, Fujitsu Services, Fun Tour, Indesit Company, Infosys BPO Poland, Lek - Sandoz, LSI Software, Lodz S pecial Economic Zone, MakoLab, Medana Pharma, Organika, Partner Center, Pelion, PHILIPS, SouthWestern BPS Poland, Tom Tom, Żarówka PR and Marketing. Development of the Effective Cooperation Model for creating diploma thesis for the demands and needs of the economy has been the biggest advantage of the ongoing project.

Effective Cooperation Model for creating diploma thesis for the demands and needs of the economy

Step 1

Analysis of needs inside the enterprise

Step 2

Enterprise’s introduction of the thesis topic to the electronic database

Step 3

Finding an adequate supervisor by means of the Office for Cooperation with the Employers

Step 4

Specifying conditions of the commission by the Supervisor in the enterprise

Step 5

Working with the candidate for the degree on the topic with the research fieldt

Step 6

Signing a contract on internship and diploma thesis realization upon the needs of the enterprise

Step 7

Completing the commissioned diploma thesis + monitoring

Step 8

Defense of the diploma thesis

Source: http://www.pracodawcy.uni.lodz.pl/Portals/1/Files/Pdf/ModelEfektywnejWspolpracy.pdf

July / August 2012

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An innovative platform available at: www.praktycznydyplom. uni. lodz.pl has been created, by means of which employers can submit topics of diploma thesis for the students of the University of Lodz. Within the course of the studies the student spends around 500 hours on writing the diploma thesis that is usually kept in the sock drawer. These 500 hours equals: 62 days → 12 weeks → 3 working months, which is the time students can spend on vocational training or internship in a company of their choice. The projects supports the possibility of creative cooperation between the students and interested companies.

the future economy and IT systems analysts. Graduates with a broad knowledge in economy, management and finances as well as diverse quantitive methods are able to use it to prepare analysis and forecasting of phenomena on different levels of management. Applied IT skills can be used for de signing, programming and implementation of IT systems and for computer networks administration. Accounting and finance department has over 3600 specialists in the field of finance and accounting, principles of financial institutions functioning, analysis of economic and financial phenomena. The study program includes general and practical economic classes and a group of major area subjects.

„The University of Lodz – center for manager education” The Polish-American Management Center at the Manage ment Faculty of the University of Lodz is a modern center for manager education which has been supporting the voca tional development of management staff of various levels for nearly 17 years. PAM Center organizes studies and trainings for employees, managers and company owners. The main activities of PAM Center are Polish-American E xecutive MBA Study accomplished together with R.H. Smith S chool of Business (University of Maryland) and unique on the c ountry level – Mini MBA® Short Term Training for Managers. The offer of PAM Center includes such open trainings as: Project Management, Manager Competency S tudy, Financial Markets Forecasting, Leadership Academy as well as those realized on individual needs of the enterprises. Individual Faculties of the University are places of various meetings, seminars, conferences, trainings, promotional and recruit ment actions which prove that scientific theories can be skilfully joined with business practice. „The University of Lodz for outsourcing” There are almost 1900 people studying at the faculties of economy and information technology who will become in

One of the best centers in Poland for accountancy training is located at the Management Faculty. The Faculty of Economics and Sociology in cooperation with the branch co-creates postgraduate studies within the field of outsourcing. The Faculty of Philology of the University of Lodz trains 2350 students in foreign languages (English, German, Russian, Spanish, Italian, French). Philology graduates do not only specialize in major language but also have knowledge in culture and mentality of the given nation. They are able to work with different culture groups as they take into account their ways of behaving.

July / August 2012

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Lodz center Infosys BPO cooperates with the University in the sphere of raising students’ competence and adapting their abilities to the needs of the employers. Infosys organizes workshops and lectures as well as various apprenticeship programs. Their aim is to develop skills in young people and help them successfully find their place on the labour market. Representatives of the center are members of the U niversity Business Councils and active supporters of financing of aca demic initiatives and science circles. Infosys BPO Poland co-created one of the first Polish post-graduate studies in modern business services sector, „Organization and mana gement of common service and BPO center” at the Faculty of Economics and Sociology at the University of Lodz. Research and international potential In 2011 the University of Lodz realized among others: 11 research projects financed within the framework programs, including 9 of 7’s Regional Operational Programme, 30 research projects financed from external sources, including State sources, 58 projects financed from Structural Funds, 2 projects financed by the Norwegian Financial Mechanism. The students of the University of Lodz can take pride in their huge mobility in international relations. In 2011, 471 students* went for ERASMUS study exchange program (in 2010 – 465 students). As a part of financial means gained from the ERASMUS budget, 11 students of the University of Lodz went for one-year Campus Europae studies. The b iggest number of excursions was realized to the following countries: Spain (81 students), Germany (60 students), France (51 s tudents), Portugal (43 students), Finland (20 students), Turkey (19 students), Italy (16 students). Students also studied in Austria, Belgium, Bulgaria, Greece, Denmark, Estonia, Holland, Lithuania, Latvia, Hungary, Slovakia, Slovenia, Cyprus, Malta, Norway, Ireland, Romania, Great Britain, Czech Republic, Sweden, Luxembourg and Switzerland. ▄▀

The best students are given motivational grants of 1000 PLN per month starting as early as the first term of the studies. At all faculties there are Business Councils to which repre sentatives of companies from different branches of the region belong. This helps in modernization of didactic content and working on new specialties and faculties programs. An im portant manifestation of cooperation with the business is the presence of practitioners who conduct the classes, which significantly enriches the empirical side of the presented didactical content.

July / August 2012

Source: Rector Plenipotentiary Office for Relations with Employers

Education vs Outsourcing | Articles

International Model of Higher Education The Faculty of International and Political Studies is the most internationalized entity of the University of Łódź. We have years of experience in professional managerial training in foreign languages with programmes adapted to the needs of international companies. Our educational offer is designed to encourage our post and undergraduate International Marketing students’ flexibility and to facilitate their professional development in highly competitive international labour market. Our teaching programmes are created in close coo peration with employers and interdisciplinary Business Council with members from renowned international corporations including the outsourcing companies. Truly international studies We have adapted best practices form European and American higher e ducation institutions. Long-term relations with renowned foreign universities allowed us to de velop an interdisciplinary model of studies, combining such themes as economics, management and marketing with excellent knowledge of two foreign languages and recognition of cultural d ifferences in international business environment. Next to the most c ommonly used E uropean languages, our students have the opportunity to select courses in Arabic, Chinese and Japanese which increases their employability.

penness and sound knowledge of marketing, p o roject mana gement and modern communication techniques constitute a strong advantage on the international labour market. Diversity of career opportunities: international business–politics–media

Our model of education is highly appreciated by foreign employers and managers. Not only are our graduates able to communicate smoothly with their team members from different countries but they also exhibit high sensitivity for cultural differences of selected geographical regions.

Our students can choose courses from three paths. The first one is designed for those who see their future in international companies in such areas as international marketing, international project management, international marketing communications. Courses from the second one prepare them to form a career in central and local administration — namely in self-government, international social and political organizations, diplomacy and EU institutions. The third focuses on international journalism in all types of media: television, press, radio, Internet.

It is more and more common for our graduates to speak three foreign languages which is a strong handicap in comparison to the graduates of traditional engineer, economic, legal and business studies. These skills combined with c ultural

We encourage our students to work during the studies and to apply for internships in all types of companies, including those from outsourcing sector with which we seek to strengthen our cooperation.

Education for international labour market

July / August 2012

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The President of the European Commission, José Manuel Barroso, who received Doctor Honoris Causa of the University of Łódź due to the initiative o the Faculty of International and Political Studies, accompanied by Professor Elżbieta H. Oleksy (Dean of the Faculty 2000–2008), Professor Tomasz Domański (Dean of the Faculty since 2008) and the students. Photo: Krzysztof Szymczak („Dziennik Łódzki”)

Combining different paths and themes within one major (International relations) is the essence of the interdisci plinary approach that we have developed at our Faculty. This encourages the students to form their career path according to their passions and interests and educate people who are open-minded and internationally-oriented. Owing to this model, our graduates are prepared to commute and to change job locations easily. Such a profile makes our graduates valuable employees at the time of crisis and turbulent change. They perform well as managers and project leaders in all types of organizations and sectors. Cross- cultural communication skills make them strong candidates to manage and to participate in international projects. Outsourcing companies are an important and natural partner in this area.

A broad network of international partners Vast majority of our students spend at least a semester or a full year of their studies at leading universities in the UK, Germany, Spain, France, Belgium, Holland, Italy or in Scandinavian countries. This plethora of educational, cultural and professional experiences allows us to form the‚ young Europeans’ — able to position themselves flexibly on the global market The presence of foreign students at our Faculty is yet another dimension of its international character. Having an interna tional group of students positively affects communication and increases understanding of different cultures. We also have a broad network of visiting professors form the USA, Mexico, France, India, Australia, Japan, Spain, Russia and China. Foreign languages, marketing and modern communication in the international environment Our studies combine competences critical in marketing and entrepreneurial activities of the XXI century. Our graduates posses interdisciplinary knowledge that in the past had to be gained at a number of faculties. Our contacts with emplo yers indicate that the educational model that we pursue has many advantages over the traditional model. Our graduates are appreciated by the employers and find their first position very quickly. Many of them start working during their studies,

July / August 2012

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SA, T otalizator Sportowy, Amcor Rentsch, Atlas, ŁSSE (Łódź Special Economic Zone) and outsourcing companies: Southwestern and Infosys. The second pillar are the media, cultural and art institutions: The Museum of Modern Art Jaracz Theater, Philharmonics of Łódź, Dziennik Łódzki (leading daily regional n ewspaper). The third pillar constitute high-level representatives of municipal and voivodship authorities. The aim of the Council is to develop innovative methods of cooperation of all members in the area of education and employment policies. Our trainings and diplomas

smoothly combining their linguistic abilities, c ommunication techniques, project management and marketing skills. Their versatility makes them strong candidates for positions in service companies, marketing departments, advertising, new media, international organizations and outsourcing.

The Faculty of International and Political Studies offers European standards of higher education. Next to B achelor’s and Master’s studies — including International M arketing in English — we offer post-graduate programmes: International Marketing Management and International Hotel Management, as well as Polish-French MBA-type programme running for 20 years in cooperation with Lyon III U niversity, France. ▄▀

Interactive teaching methods Interactive character of courses is aimed to stimulate students’ creativity and inspire participative approach to learning and problem-solving. The majority of assignments is based on teamwork, which encourages harmonious cooperation and boosts presentation and communication skills. The final dissertations of our students are predominantly based on the results of their own empirical research and their independent analysis. The topics of these works are strictly connected with students’ academic interests and career plans. The quality and the results of the work is a very good indicator of a student’s performance for a future employer. At our faculty, we aspire for more and more of final dissertations to be written in close cooperation with our partners from business sector, including the outsourcing companies and other enterprises — members of our Business Council.

Tomasz Domański, Full Professor is the Dean of the Faculty of International and Poli tical Studies University of Lodz and the head of Chair of Interna tional Marketing and Retailing. He supervises two international post- graduate managerial program mes in English and in French. A graduate from a French univer sity and the author of numerous publications in marketing strategy and retailing. He has been a mar keting consultant to many Polish and foreign companies and local government. He is a member of the Commitee of Scientific Policy at the Ministry of Science and Higher Education.

The Business Council Our Business Council is of an interdisciplinary character. It is composed of the representatives of business, local government, culture and media The first pillar are international corporations and renowned Polish companies, financial institutions and insurance companies. Our invitation was accepted by: Jeronimo M artins Group („Biedronka” brand), BNP Paris Bas, S kanska, Orbis/Accor Hotel Group, ING Bank, PZU SA, PKO BP

Contact: International Marketing Management: imm@uni.lodz.pl; kmmdimm@uni.lodz.pl; Polish-French MBA-type programme: cbsful@uni.lodz.pl.

July / August 2012

Education vs Outsourcing | Articles

English for specific purposes a necessity or fashion While English is not the most widely spoken language in the world when you look at it in terms of the number of native speakers, it’s the world’s most prominent language. It is estimated that over one billion people are currently learning English worldwide. There is a wide variety of factors exp laining the reason for such a big boost in English language learning in recent years, but it all boils down to the fact that the English language is the ”international language” of busi ness and politics for a great deal of countries around the world. Although the rapid growth in global communications, there are still companies, institutions and individuals who suffer from a lack of business or professional success. Very often the key to professional success and business expansion lies on effective communication. With this in mind and taking the “Global Community” we live in into account, not having good language skills may be the reason for failure in the quest for business success. Communicating effectively in English is surely one’s advantage in business. Communication problems may seriously affect your business. Misunder standings, resulting from poor communication can seriously hinder the company from business opportunities and the professional individual from climbing the career ladder.

July / August 2012

The importance of English for business More and more CEOs of global companies require a good command of English from their employees. Hiroshi Mikitani, the Chief Executive of online shopping mall operator Rakuten, described by some as Japan’s Bill Gates, understands the importance of being fluent in English in order to increase its global competitiveness. In 2010, he announced his intention to make English the company’s language by 2012 in order to expand his business globally. Rakuten’s language s trategy proved to be effective as it acquired Germany’s Tradoria online mall, the UK’s Play.com online retail site and others in Indonesia and Russia only in the last year. The reason why companies increasingly demand their em ployees to learn English is that one of the most p owerful ways to compete globally is to make your company an English-speaking organization. Chief Executive Officers of international companies will have no choice but to face the language issue as they extend their global reach. It seems that language strategy is likely to play a key part in their international expansion. There are also other reasons why some big c orporations make language requirements so important. With the e conomic

Education vs Outsourcing | Articles

limate as it is right now, companies are looking for different c ways to cut costs. The most popular are: o utsourcing and offshoring. Many companies have discovered that they can reduce their overheads by sending their jobs o verseas. Some companies have also found that they can lower the costs by hiring immigrants or employees from other countries. Climbing the corporate ladder

in the corporate world. Poor language communication skills are very often the rationale behind being passed over for promotions, being left out of conversations that are incom prehensible for a non - English speaker or simply not being able to get the message across. In many places such as Asia, Africa and South America, the ability to communicate in English will determine who will increase their living s tandards and who will remain in poverty.

Going down on a more personal level of career success, having the right range of English language skills may be a significant milestone in the quest for business or professional success. International assignments in global corpo rations have immensely increased over the last few d ecades. The growth of the global economy, multinational corporations and other organizations, as well as growth in intergovernmental and nongovernmental contacts have increased the number of managers travelling to other countries dramatically. There is number of reasons for sending managers overseas. T hese managers are responsible for penetrating new markets, overseeing operational start-ups, transferring technologies, managing joint ventures, transmitting organizational culture, and developing international communication skills. Although foreign assignments are viewed as a key strategy for MNCs, many expatriate managers are unsuccessful in the foreign assignments because of not having efficient language skills. No matter how good your presentation skills are, or how good your negotiation strategy is, a lack of language skills or poor language skills may not allow you to achieve your busi ness goals. It is extremely important for a business profe ssional to communicate effectively with business partners from abroad. Being well-equipped to carry out international business, may be your advantage in working your way up the corporate ladder. Ability to express yourself in the English language, may w iden your career prospects and it will be an invaluable asset in the recruitment processes. Even if looking for a new job is not the case, having the ability to express yourself in Business English will help you perform better in your d ay-to-day chores. If you want to work for international company and be successful in carrying out international business, learning English is incredibly important. No matter what your c ountry’s official language is, most business communications these days happen in English. Very often the company’s custo mers, partners, suppliers, and competitors are using English exclusively. Employees who are not able to collect, process and e xchange information in a quick and accurate way can hit a bottom line

A fast-track to business leader A growing number of businesses are recognizing the need to invest in training for their personnel. No matter if this involves equipping the staff with the new skills required to operate the latest software, or simply an opportunity to improve existing skills, in today’s candidate driven market providing employees with training courses is essential in order to retain existing personnel as well as to attract new recruits. It can also influence employer branding. A step in the right direction is for organizations to p rovide Busi ness English training for their employees in order to become a competitive part of the market. A company’s opportunities will become limitless once their employees proficiency level in English increases.

July / August 2012

Education vs Outsourcing | Articles

Organizations should see increased productivity and effi ciency, improved communication and teamwork, increased staff confidence and motivation, better customer service and overall job satisfaction among the employees as a result of improving employees’ English language skills and business skills. The importance of training and the role it plays in keeping the workforce happy, motivated and productive is substantial and essential for companies who wish to compete in a fast- changing business. English for specific purposes English as the lingua franca for international communication in various fields such as business, medicine, engineering and aviation plays a key role in an increasing worldwide demand for learning English to cater for the specific needs. The demand of English courses tailored to specific needs is rapidly growing in areas such as:

Finance Travel and tourism Human resources Accounting Negotiations Presentations

To meet the demand Business English and English for Specific Purposes concentrate more on language in context than on teaching grammar. It can cover subjects varying from accounting or computer science to tourism and business management. In some cases, people with inadequate pro ficiency in English need to be taught how to handle specific

July / August 2012

jobs. In such cases English is taught for specific purposes so that the concerned employees can perform their job require ments efficiently. If an employee is working in the customer service or call center sector, he really needs to bone up on the Business English which focuses on improving skills such as: telephoning, negotiating, presenting, writing e-mails, or taking part in business meetings. English for Specific Purposes course aims are determined by the needs of a specific group of learners. The skills the group needs can include writing e-mails in English, delivering pre sentations, conducting negotiations or plain small-talk. With this in mind, such skills are already considered to be a prere quisite of modern business and the key to global business. The present context of globalization has multiple effects on the lives of people across the globe. And for all those coun tries where English is not the first language the significance of learning, teaching and using English cannot be understated. People correspond with each other from around the world on regular basis, services are provided globally and products are bought and sold around the globe. The English language has inarguably achieved a major role in the p rocess of globa lization and it has become the prime language of choice for communication by many different countries. ▄▀ Communication Corner info@communicationcorner.pl www.communicationcorner.pl

Author: Izabela Cichosz Owner Communication Corner

Outsourcing & More | Main Topic

Main topic

Car Fleet Management

92 Modernity and comfort, i.e. FSL

101 Interview with Arturem Sulewskim, Commercial Director at LeasePlan Fleet Management

93 Full service leasing 103 Leaseback – how to reclaim frozen money? 96 When do vehicle rental services pay off and what are their variants?

104 Methods of remarketing vehicles after long-term rental

96 TCO – total cost of ownership of fleet 106 Long-term rental of trucks 97 The methods of reducing the cost of the fleet. 99 How can outsourcing reduce the cost of the fleet?

107 How often and for what reasons are fleets of trucks replaced?

99 Interview with Radosław Grzela, Commercial Director of Arval Service Lease Poland Sp. z o.o.

108 Motor transport, current situation and short-term forecasts

100 Interview with Marta Bielecka-Gozdek, Commercial Director MSP, Alphabet Poland Fleet Management

July / August 2012

Outsourcing & More | Main Topic

Modernity and comfort, i.e. FSL

____________________________________________________ Full service leasing (FSL) is a modern solution that allows companies to separate the core business activities from administrative works connected with the service of car fleet. The annual summary of the results of the full service leasing sector shows that this form of financing is gaining increasing popularity in Poland. In the years 2006-2008, the Polish fleet market developed at over 30% rate a year. The crisis that reached European economies in 2009 caused a reduction of a growth rate, but - according to PVRLA data – during 20092011, over 10 thousand cars more were leased every year.

the selected non-financial services. They usually include: service of vehicles (repair and maintenance), insurance, replacement and storage of tyres, 24h assistance, courtesy car, fuel cards and reports. This agreement also specifies the rights and obligations of both parties. Once a month, the Customer receives two collective invoices covering all used vehicles. After termination of the agreement, the user gives back the rented cars to the fleet service provider and the leasing company replaces them – without demurrage – with new ones. It is also possible to repurchase these vehicles. Currently, corporations and large enterprises are the main beneficiaries of FSL, but more and more interest in such type of financing may be noticed among the companies from the SME sector. The experts from the Polish Vehicle Rental and Leasing Association estimate that the saturation of our market is about 20 per cent – the predicted maximum of penetration is 500 thousand cars. The coming years will, therefore, be a period of stable growth in this rental sector.

“Satisfying results of the full service leasing sector are mainly due to the fact that Polish entrepreneurs appreciated the idea of outsourcing. The attitudes of the Customers, who no longer place the greatest emphasis on possession, but on the use of cars as a tool of work, are slowly changing. Given the choice of three products – FSL, leasing with a service and only management – most often they choose the first option, because it is the most convenient solution which addi tionally generates savings” says Leszek Pomorski, President of the Polish Vehicle Rental and Leasing Association and of Alphabet Polska Fleet Management. The basic advantage connected with the use of FSL services is the Supplier’s taking over all administrative issues con nected with the service of the Customer’s car fleet. People who manage the company may focus on the core business, and using the outsourcing of the fleet, they reduce the costs of its operation and exploitation. The leasing company takes over the whole range of administrative and technical tasks which include, among others: car registration, negotiation of insurance terms and their subsequent enforcement, cost control, quality control, as well as validity of repairs or obtaining fuel cards. The company’s representatives will also advise on which brands and models of vehicles will be optimal in the case of the business activity conducted by the Customer and then the leasing company will finance their purchase, based on the maximum discount negotiated with the specified manufacturer. The fleet vehicles are handed over to the Customer on the basis of the leasing agreement and the service agreement – from which the user can deduct the full VAT – specifying the agreed period and the millage limit. Within the frameworks of the service agreement, the Customer may decide to c hoose

July / August 2012

Polish Vehicle Rental and Leasing Association (PVRLA) is an organization gathering 17 companies specializing in rental and leasing of vehicles on the Polish fleet manage ment market. The members of PVRLA are leading players in the sector – almost 70% of the market of the vehicles operated under full service leasing is attributable to them. PVRLA includes: ALD Automotive Polska Sp. z o.o., Alphabet Polska Fleet Management Sp. z o.o., Arval Service Lease Polska Sp. z o.o., Athlon Car Lease Polska Sp. z o.o., Bankowy Fundusz Leasingowy SA, BRE Leasing Sp. z o.o., Business Lease Poland Sp. z o.o., Carefleet S.A., Corpo Flota Sp. z o.o., Express S.A., Fraikin Polska Sp. z o.o., KBC Autolease Polska Sp. z o.o., LeasePlan Fleet Management Polska Sp. z o.o., Nivette Fleet Management Polska Sp. z o.o., Raiffeisen-Leasing Polska S.A., VB Leasing Polska SA, Volkswagen Leasing Polska Sp. z o.o. PVRLA is a member of the Polish Leasing Association. More information about PVRLA and its members can be found at: www.pzwlp.pl.

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Full service leasing

____________________________________________________ It seems that full service leasing was completely described in writing and in speaking. However, the rental market is changing, and thus the offered services are constantly evol ving. It is worth looking at them not through the lens of definition, but through the lens of their characteristics.

ffers with the so-called asterisk. The more simply formuo lated the s ervice, the more clearly presented solution – the more likely we decide on it. If the offer has a lot of aste risks, there is a great risk that we will overlook something. Nobody likes to make mistakes, and especially to be sur prised with unforeseen costs. Therefore, the transparency of the offered s ervices is a key issue, which should guide their development. Comprehensive and stable

2012 as “the year” of the Customer In recent years there has been significant development of the rental sector in Poland. Companies more eagerly choose FSL, because of the complexity, convenience and minimi zation of operating costs of company vehicles. Year by year, Customers have more precisely defined requirements. It can thus be concluded that the year 2012 will be “the year” of the Customer who expects that the rental service provider will be even more engaged, innovative in action and will meet his/her growing needs. The answer to these needs are certainly comprehensive services, transparent costs, time saving and the opportunity to generate additional savings from long-term rental. Minimization of the risk connected with fleet management and the opportunity to transfer them to the provider is of key importance to Customers.

Non-financial services in long-term rental.

Complexity should certainly be a feature of the currently provided rental services. For this reason, among others, the companies decide on the fleet outsourcing, i.e. entrusting its management to the provider: to save time and to be able to focus on the core business of the company. The perfect FSL service should maximally relieve the Customer from dealing with issues connected with the fleet – both administrative issues, and within the scope of any operational activities. Already at the stage of RFQ, we may observe the changing trend of cutting costs by all means into the interest in a comprehensive service, which ultimately will not generate additional costs. Customers prefer, for example, slightly more expensive service packages with extended range, which include a series of events beyond the previous market standards, because they do not like to be surprised by additional costs for service, even if they arise through the fault of the users – as a result of negligence or improper use of the car.

The majority of the clients of companies offering fleet services use vehicles with a complex package of services. It includes, in addiction to financing, servicing and fleet management in every field – operational, administrative, legal and technical. The main non-financial services include: Insurance • Claims adjustment • Servicing • Replacement and tyres servicing • Assistance and replacement cars • Fuel cards service • Door-to-door • Reporting Transparency of services Not everything that seems to be very similar at first glance is such in reality. It can be perfectly illustrated on the example of the offers of Polish mobile network operators, where we get - for example - 60 free minutes on a subscription. But, at one operator these 60 minutes may be used when calling only to other subscribers in the same network, while in the latter case, they include connections with every number. And so the offers of the rental service providers differ among each other – usually with minor details. It may even be con cluded that they are almost the same, whereas this “almost” makes a big difference. Each of us is a customer and knows perfectly what is the general attitude towards all kinds of

The most significant expenditures on the fleet

The fleet costs may be divided into 7 basic elements. Depre ciation costs constitute over 40%. The second element is the cost of the fuel purchase, which is at the level of 21%. However, it is possible for the companies to reduce fuel consumption. The easiest way, which allows to reduce consumption by up to 20%, are trainings in eco-driving. Savings can also be generated – especially in the case of high mileages – by the selection of diesel vehicles. Costs of vehicle depreciation and fuel purchase – a total of approx. 63% – is the largest group of expenditures incurred for the maintenance of the fleet. Next, there are insurance costs which constitute 11%. Here, it is worth mentioning that there is also a way to reduce them – trainings on safe driving. They have a great impact on reducing the number of accidents and on minimizing the consequences of them. Therefore, they reduce the loss ratio of the fleet of a given customer, which allows to negotiate the value of the offered insurance rates. Other costs include: costs of maintenance,

July / August 2012

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repairs and replacement of tyres – 11% and the credit costs – at the level of 9%. Taxes and administrative costs cover 6% of the expenses connected with the maintenance of the vehicle stock. Diagram 1. The components of the fleet maintenance costs (approx. 50-100 cars). Source: LeasePlan

Ubezpieczenie 11% Administracja 3% Naprawy, przeglądy, opony 11%

Oprocentowanie kredytu 9% Podatki 3%

Savings under control In fleet financing, transparency of costs being the amount of the interest is very important. The Customer should be able to verify whether the costs of the fleet operation incurred by him/her are consistent with the real expenditures for this purpose. If the service provider chooses to offer such a solution to the Customer, the FSL service can not only assure transparency of the costs incurred to maintain the fleet, but it will also enable the possible return of the overpaid funds during the period of the lease. Additionally, the risk of the costs higher than the assumed ones is in this case assumed by the rental company, thus absorbing the loss. Any savings in fleet operating costs within the frameworks of such so lutions are the result of the joint work of a rental company and its customer. This model is based on building partner relations with the Customer and on achieving a common goal - reducing the costs associated with company cars. Quality worth its price

Paliwo 21%

Amortyzacja 42%

Source: LeasePlan

Currently, we are dealing with Customers who are becoming more and more educated and more experienced, who know exactly what they want. This results in the fact that the rental service providers are strongly focused – and will continue to focus – on the development of further solutions and pro-customer improvements, while achieving the best value for the price of their products and services. Quality, but also the reliability of the provided services, because only practice shows whether these high-quality solutions are possible to realize.

For the benefit of the large and small Corporate Social Responsibility Of course, the above data change depending on the size of the rented fleet. According to the phenomenon of a scale, large fleet means lower financing costs. Large companies tend to have higher financial liquidity, and thus - in the case of a credit, they are offered better terms. Also, the larger the fleet, the lower costs of the cars. This is because the rental companies receive more favourable terms from the manufacturers for greater orders. It is similar in the case of discounts on the purchase of fuel and insurance. In the case of insurance, it must be remembered that the Customer’s loss ratio is of key importance. The smaller company, which decides to entrust the management of the fleet to a specialist rental company, can mainly significantly reduce the costs of administration. It is not only about the cost of service connected with fleet management, but also about the costs of accounting, HR, as well as the time spent by the Director or the President of the company on negotiating the terms of a credit or on planning fleet renewal. Moreover, it is possible to fully control the costs of the vehicle stock.

July / August 2012

A trend for socially responsible business became popular some time ago. In the case of fleet management, it is usually associated with the solutions in the field of ecology. Some rental companies not only advise on how to minimize the future effects of operation of the fleet, but also, by planting a sufficient number of trees needed to reduce the pollution generated by a given fleet, compensate those already existing. Today, Customers do not only want to be “green”, but most of all - they want to be responsible. Within the frameworks of the fleet rental, this responsibility may manifest itself in various ways. Most often, when designing a fleet, the companies focus on the proper selection of cars – so that their CO2 emission is as low as possible, and therefore, the most environmentally friendly. Hybrid and electric cars have become present on the market. However, it should be remembered that due to the lack of tax reliefs, interest in alternative drives in Poland will be confined to enthusiasts or those who are driven by image issues.

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July / August 2012

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Striving for excellence Although, for many companies, the rental of a fleet is no longer something new and unknown, the decision on its implementation still requires careful analysis. More and more companies see that this solution actually works in practice. Through the outsourcing of a fleet, they want not only to improve their work, but also obtain the greatest possible benefits. Author: Artur Sulewski Expert from the Polish Vehicle Rental and Leasing Association Commercial Director of LeasePlan Fleet Management

When do vehicle rental services pay off and what are their variants?

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The element which significantly distinguishes the short-, medium-, and long-term rental services is the declared r ental period. It allows the service providers to classify product lines and to assign particular attributes to them. On the other hand, from the point of view of customers it is important to be able to clearly distinguish these services and choose the variants that are optimal for them. Using the simplest classification, per rental period, we can distinguish: short-term rental, counted in days (1 to 31 days), during which daily rental rate applies, medium-term rental, counted in months (1 to 24 months), during which monthly rate applies, long-term rental, counted in years (2 to 5 years), also with monthly rental rate. If during a year a company uses many several-days rental, it is also the customer of short-term rental. A significant issue is the approach to the vehicle’s mileage. The short-term (daily) rental rate allows for unlimited mileage, whereas with medium- and long-term rental, limited mileage

July / August 2012

always applies. With medium-term rental it is a monthly limit, and with long-term rental the limit is determined for the whole period of operation. At medium-term rental service the customers usually use the current fleet of the provider, and the vehicles are typical. With short-term rental the customer chooses from among the vehicles offered by the hire shop. Author: Piotr Kaim Expert of the Polish Vehicle Rental and Leasing Association Trade Director at Express S.A.

TCO – total cost of ownership of fleet

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Although the term “TCO” has well settled in the business language, its meaning is not always clear to many entre preneurs. TCO stands for total cost of ownership. In the case of company vehicles fleet, TCO is the list of all the costs generated by the operated vehicles, connected not only with the purchase and current management thereof.

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trative issues specified in the offer or in the agreement will be incurred by the fleet company closely cooperating with the fleet manager. The extent of changes after using fleet outsourcing is definitely noticeable for customers: the departments of the company do not need to account and check hundreds of fuel invoices, reasonableness and costs of post-accident repairs or inspections, or get involved in further negotiations with contractors in the case of the necessity to implement even little changes in the agreements. Put briefly: the awareness of real fleet costs allows the entrepreneur to make the optimal choice. Author: Leszek Pomorski CEO of the Polish Vehicle Rental and Leasing Association CEO of Alphabet Polska Fleet Management

This kind of audit is used in two circumstances, depending on the company’s situation and development plans. If the company administers the vehicles independently – by financing them from own resources or via leasing or loan – the TCO analysis will allow to precisely determine the costs of operation of the company vehicles. On the other hand, if the company’s management board considers the outsourcing of vehicles, the audit of the total cost of ownership will be the source of valuable information, which will allow to compare the offers of various providers of long-term rental services. After all, the choice of an experienced, solid fleet partner is a key question, as it is decisive for the future mobility of the company. What does TCO look like in practice? The expenses can be divided into direct and indirect. One should not omit obvious fixed costs (e.g. rent, purchase of equipment and IT software or telephone costs), but we will focus on strategic costs. With a fleet managed independently, direct costs – connected with the daily operation of vehicles - include among others financing the vehicles, purchase and consumption of fuel, inspections and repairs, insurance and depreciation, as well as the sale of the vehicles after the period of operation. Indirect costs include the functioning of the company’s fleet department (e.g. personnel costs or expenses for periodical trainings), partial involvement of accounting and administration departments, management board or hiring external auditors. If an entrepreneur plans or begins to cooperate with a long-term rental company, direct costs should include only the amounts of invoices for financing and servicing plus current costs of operation, e.g. fuel. In such a case, the adminis

The methods of reducing the cost of the fleet.

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How to get savings from company cars park? It must be said that the majority of cost reducing methods lies on the side of the user of the fleet. However, car parks managers also have a vital influence on the cost reduction, for example, through the exchange of company cars for those that are cheaper in purchase and in operation. Prestige or economy? For example, less prestigious car brands can be cheaper. Of course before one conducts such an operation, two aspect should be taken into consideration – the aspect of the image and the practical aspect. If the company chooses vehicles of a less well-known brand than ever before it can be inter preted as a sign of financial problems and undermine the image of the company in the business environment. From the practical point of view it is one of the easiest ways to generate savings. The price of such cars is lower (which affects the lower value of the leasing instalment), as well as the cost of man-hour in service stations, that is elements of the service instalment.

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A more real segment Fleet cars can also be cheaper thanks to lowering the segment, which according to the company fleet policy, is entitled to employees at a particular position. For example, the vehicles of sales representatives who collect orders and do not transport large quantities of goods, can be smaller, and thus, more economical. They cost less, have lower insurance rates and lower fuel consumption, and also the

prices of spare parts and service are lower. Even in the case of traffic damages the cost of panel and paint repairs is lower.

mounts jointly to 180 thousand PLN. The majority of custo a mers do not analyse whole savings or costs generated by cars, focusing on the financial and service instalments. Meanwhile, the seemingly more expensive solution can be... cheaper. If car A consumes per 100 km half a litre less than vehicle B, it can bring greater benefits. With the average annual mileage of 50 thousands km, the savings from fuel (we assume the price is 6 PLN per litre) which will be used by 100 A-cars will amount to 450 thousand PLN. Regardless

of whether the consumption of both cars is 5 or 10 litres the budget of the company will save in total 270 thousand PLN, that is 7.5 thousand monthly, despite the higher instalments.

Fuel consumes the budget Every day matters Certainly, the issue of fuel consumption has a significant influence on cost reduction which can be – depending on the routes covered, the type of engine or the driving style of the driver – 25 to 35 per cent of monthly expenditures on company cars. Imagine that you have a choice of two vehicles. Vehicle A costs 1,050 PLN monthly, while vehicle B – 1,000 PLN. With a fleet that amounts to, for example, 100 vehicles, the difference in expenditures during a 2-year period of contact

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One should also draw attention to the service intervals. The service inspections of Vehicle C may be appointed every 15 thousand km, while car D – every 20 thousand. With 50 thousand of annual mileage and a hundred cars in the fleet, the employees using car C may lose in total 300 man-days. Using car D allows to cut this average by 70 days. With five cars in the mini-fleet it does not matter, but with 50-100 cars – it does for sure.

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Responsible loss ratio An effective way of a perceptible reduction of fleet costs is the close monitoring of loss ratio and taking preventive actions. The key task of the entrepreneur, who can be professionally supported by the rental company, is to make drivers aware that they are responsible for the property entrusted to them. It does not matter whether we are talking about company mobile phones, laptops or cars. Without making bonuses and remuneration strictly conditional at the level of caused traffic damages, any courses, exams and training will not give desired results. The system of dependence should be tight and consistent. If – for example – the crash is caused by the company car’s driver, he or she should c over the c osts of the repair (in the previously agreed scope) regardless the position in the company or services for the company. It must be remembered that the insurer does not eliminate the damage from its own resources, but from ours – the higher the loss ratio, the higher the insurance rate will be for the company cars next year. Every damage is a kind of invoice with a postponed due date. Companies using company cars have the majority of methods of fleet costs reduction within their reach. It is enough to choose and operate cars in a well-considered way and to delegate a part of the costs on their perpetrators. With the consistent actions of entrepreneurs, the positive financial results should appear within 6-12 months. Author: Krzysztof Sosnowski The Expert from Polish Vehicle Rental and Leasing Association. Operational Director, The Member of the Board of Alphabet Poland Fleet Management

How can outsourcing reduce the cost of the fleet?

park maintenance, both in financial and operational aspects. The most popular products used to optimize the cost of fleet maintenance are: financing the purchase of vehicles, insurance, loss settlement, servicing, purchase and replacement of tyres, assistance, replacement cars, fuel cards and door-to-door services. Outsourcing provides entrepreneur comfort and the control of expenditures by a constant and predictable leasing cost included in monthly instalments and the clarity in car fleet management on the basis of regular reporting. The addi tional benefit of the FSL is also the transfer of risk associated with the residual value of the vehicle that belongs to a leasing company. The fleet does not charge the company’s balance sheet, giving it more creditworthiness and higher return on investment, thus involving no capital to purchase vehicles. This guarantees in turn greater flexibility in investment decisions in the scope of a company’s activity.

Author: Bartłomiej Kwapisz Expert in Polish Vehicle Rental and Leasing Association. Product&Marketing Manager Arval Service Lease Poland.

Interview with Radosław Grzela, Commercial Director of Arval Service Lease Poland Sp. z o.o.

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What are the components of the long-term rental agreement and maintenance agreement (FSL)?

Outsourcing of vehicles in the form of full service leasing is the most advantageous and the most rapidly developing form of company fleet management in recent years. FSL relieves the entrepreneur of the task connected with c ompany car

Every agreement is adjusted to the individual needs of a client. It defines obligations and future terms of coope ration, specifying the scope of individual services, response times, key indicators for quality assessment etc. It becomes

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a market practice to divide the full service leasing agreements (FSL) into leasing and service agreements. The agreements operate separately, which gives the possibility to optimize costs, including the tax burden. Typical arrangements regulated by the standard agreement and SLA, Service Level Agreement, are the issues connected with the financing of the fleet, delivery of the vehicles, conditions of their return, insurance, repairs, tyres, assistance, replacement car and fuel. SLA should regulate the response times and the scope of individual services. There are, for example, limited service packages; therefore the agreement should clearly regulate which party covers particular costs.

Interview with Marta Bielecka-Gozdek, Commercial Director MSP, Alphabet Poland Fleet Management

____________________________________________________ How is the duration of the agreement defined? The leasing agreement should be concluded for at least 24 months, in order to be defined as an operational leasing agreement from the point of view of the Income Tax Act. On the other hand, it should be concluded for a maximum of ¾ of the economic utility of a car, which is, according to assumed conditions, from 44 to 72 months. This condition is imposed by the Accounting Act, and not fulfilling this term can result in classifying the agreement as financial leasing. This means that in Poland it is possible that the operational leasing agreement (for tax purposes) is – according to the principles of accounting – financial leasing. Author: Radosław Grzela Expert in Polish Vehicle Rental and Leasing Association Commercial Director of Arval Service Lease Poland Sp. z o.o.

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From what points of the agreement do financial consequences for the client arise? Marta Bielecka-Gozdek: The long-term rental agreement precisely describes costs which the client will incur for the use of the fleet, whether they are predictable, e.g. financing or servicing, or unexpected – for example early termination of the agreement. A reliable agreement should predict all possible events and clarify how the parties will settle events should they occur. What costs should be included in the content of the agreement? The content of the agreement should describe the method of how parties settle all costs connected with the maintenance of the fleet, both predictable and unpredictable. The costs can be divided into four types. The first is directly related to

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the financing: the agreement specifies the amount of c apital and interest, input and output parameters of the vehicles included by the contract, and also administrative fees and conditions of planned or unplanned return of the cars. The second part of the costs included in the agreement relates to servicing. Here are the regulations related to required inspections (guarantee and technical) of vehicles, repairs (guarantee and outside the scope of the guarantee), the type and cost of spare parts, type and costs of purchase, logis tic and servicing of tyres, the support and range of assis tance in the case of unpredictable road events, the type and dedicated time of providing replacement cars, the type and method of accounting fuel cards, administration and fleet management. The third part of the costs is connected with the insurance – its scope and the method of accounting. The last, fourth part of the costs is connected with the daily operation of the vehicle. They lie on the side of the user, so in the agreement it should be defined what exactly the parties include in these costs, and what they do not (such as wiper blades). The main objective of such a detailed description of all possible events in the agreement is providing mobility no matter what happens. Is it possible to negotiate the amount of costs? The cost of each of the listed elements can be negotiated. Of course, upon signing the full service leasing agreement (FSL), as with any other business agreement, the laws of the market apply. Aspects such as good financial condition and purchase potential of the company strengthen the position of the enterprise during negotiations. Before analysing the proposed agreements it is worth considering what the needs of the company are and choose such services that the company will actually use. The potential client should remember that the key characteristic of FSL is – in addition to financing and additional services – assuming a number risks asso ciated with ownership of the fleet by the rental company. The final shape of the agreement is determined by the client’s response to three questions: What services do I need? What kind of budget do I have? What risks do I want to minimize? Is it possible to negotiate the regulations of the agreement during its force? In what situations? The leasing agreement is classified as the date of its con clusion. During the force of the agreement it is possible to make changes, but they must be included within the frames determined by the definition of the leasing agreement. The restriction applies particularly to the duration of the agree ment; it cannot be shorter than 24 months and longer than 60 months (or – accounting – 48 months). The changes in agreement are usually the result of the difference between the actual intensity of use of the fleet and initial assumptions, and

their aim is to adjust instalments to the actual needs of the company. Some companies offer their clients, in the s cope of fleet management, the possibility of free renegotiation of principles and the scope of the agreement. If the client decides that he or she needs additional services or wants to resign from some, we conduct the suggested changes. What mistakes connected with the agreement do clients make most often? Customers often forget that in the case of full operational leasing we deal more with the service than with the product. Therefore, the course of negotiation should proceed from the identification of the company’s needs, through defining the details of the scope of cooperation, to the costs of the agreement, not the other way round. Clients often choose a rental company offering lower or the lowest monthly instalments, forgetting that these charges include various, often multifaceted components of the service. Without the detailed analysis of the scope and the method of realization of offered services and provisions of the agreement, the s avings on the leasing instalment often turns out to be illusive. Author: Marta Bielecka-Gozdek Expert in Polish Rental and Leasing Association Commercial Director MSP, Alphabet Poland Fleet Management

Interview with Artur Sulewski, Commercial Director at LeasePlan Fleet Management

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How are the issues of car insurance, assistance services and replacement cars described in the agreements? There are several elements to which one should pay s pecial attention when analysing the agreements in the scope of

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insurance and assistance services and replacement cars. The first one is insurance terms and exclusions provided by this insurance. Very important is a detailed verification of the terms of the offer submitted at a given rate. It happens that the insurer considerably lowers the price and later it turns out in practice that the insurance has many exclusions. Thus, the client is charged with additional costs, which appear during the course of the agreement. In the case of long-term rental it is also worth checking whether there is a possibility of insuring the vehicle for its full book value.

In analysing the contract with the supplier of the rental ser vices it is worth checking what the terms of handing over the car look like – either before the end of the agreement or afterwards. The key role is played not only by the costs – it includes precise information, what is the subject of the settlement in a particular case – but also the flexibility of the supplier. It is about, for example, the possibility of terminating the agreement only after a fixed course and the period of using the car, or after the fulfilment of one of these terms.

The next element is the terms under which the insurance rate may be changed in subsequent periods. Of course it would be perfect if the rate were fixed, but precisely described rules of changing the rate can also give the sense of stability – for example making conditional the insurance rate at the level of current loss ratio. One should not forget to check the level at which the insurer establishes the initial loss ratio for the cars fleet. If it is too low, the insurance rate will seem very favourable. But, in fact, the client can quickly exceed the loss ratio assumed at the beginning, and in the following year the insurance rate will increase unexpectedly. In the scope of assistance service one should verify the limits of the distance. It may turn out that the service from the package includes only towing below the distance where the vehicle is. If the distance is greater the client can be charged, for example, the costs of towing the car. It is worth paying close attention to the terms of use of replacement cars. There were cases where the damaged vehicle did not need towing, so the user himself / herself drove the vehicle to the service station, which resulted in refusal to give a replacement car for the time of the repair. One should also find out to what extent duties related to receiving or handing over the replacement car are transferred to the user, and clarify the terms of providing and collecting such a car in the terms of assistance service. Moreover it is worth paying attention to the detailed rules of using assistance. Some rental companies offer – for example – a three-day package, but they do not mention that there is a limit restricting this offer to using it twice a year. If the client exceeds this limit, he or she will be charged with additional costs. The second options assumes that the assistance service is unlimited, but only unless you use the fixed budget for this purpose. Exceeding this amount results in transferring subsequent costs onto the client. How are the terms of handing over the car before and after the agreement period included in the rental agreement?

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The terms of returning the vehicle are also important. U sually, the production process of newly ordered cars will be d elayed or sped up. This is why it is important to adjust the term of returning the previous car and thus – according to client’s needs – to lengthen or shorten the agreement, for e xample by one month. Sometimes, there are cases when the company, for various reasons, decides on early termination. While negotiating the terms of the agreement it is worth asking the supplier how the fees are calculated from then on. At handing over the car after the rental period the detailed information about the place of return and the costs settlement, including the costs of the expert, is very important. Moreover, one should make oneself acquainted with the procedure of the return and check how it engages the user of the vehicles into the process. Some rental companies offer, for example, the possibility of receiving the car from any location (including the office or one of the branches of client’s company). Another issue concerns the settlement and excessive wear and tear of the car. It happens that o ffers of the rental companies go beyond market standards in this issue. It is worth asking what additional fees are charged at the settlement of the agreement – only for defects requiring

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bodywork repairs, or also for mechanical wear and tear, such as a b urned clutch. Author: Artur Sulewski Expert of Polish Vehicle Rental and Leasing Association Commercial Director of LeasePlan Fleet Management

goods at the end of the lease period. Thanks to such a transaction the company may release the c apital being “frozen” in its assets and use it for investments or restructuring. Cheap assets for the development of company The primary advantage of leaseback for a company is the acquisition of cash for the implementation of business g oals. Additional resources may be used for the reorganisation of operational activity or adaptation to the new conditions, so as to, thanks to investments, leave the competition b ehind and gain a bigger market share. Such a move seems reasonable, especially as we consider that the rate of return on investment is usually higher than the cost of leasing. This m eans that with proper utilisation of the m oney gained through leaseback, the company may repay the lease instalments and even record extra income. The biggest benefits are claimed by companies that have a high value of tangible assets with simultaneous shortages of floating capital, and are willing to obtain cash for further investments within a short period of time. Leaseback makes business easier

Leaseback – how to reclaim frozen money?

____________________________________________________ Two transactions in one Leaseback means conducting two transactions at a time. Firstly, a company sells its tangible assets to a leasing company, and then it takes them on lease. The subject of the agreement may be vehicles and other machines, equipment or buildings. The result is such that the property being the subject of the transactions changes its owner (to the leasing company), but the user remains the same. The lessee, i.e. the company which makes use of such a form of financing, gets an infusion of cash resulting from selling its property, and the cost of financing is limited to regular repayment of lease instalments for the usufruct thereof. The entrepreneur may n egotiate with the lessor the detailed terms of the agree ment, including the terms of another repurchase of the sold

Leaseback is a perfect way to obtain funding for a company which finds it hard to get a loan in a bank. Specialist leasing companies, e.g. the ones letting out vehicle fleets, are able to assess the risk connected with a long-term rental better than a bank granting a loan for this purpose. Moreover, the leasing company treats the property taken over within leaseback as a security for its interests, thus obtaining funding from such a company is easier than undergoing the bank’s harsh credit eligibility investigation. Healthy balance and tax benefits Apart from the real inward cash flow, the method of accounting the leaseback, which allows to enhance the company’s balance and financial statements, is also attractive. Leasing is not expressed in the company’s balance as a liability, which means that the acquired capital does not increase the company’s debt in financial statements, enhancing the balance and the financial situation of the given entity. If a company is looking for a strategic investor, conversion of tangible assets into current assets often increases its attrac tiveness in the eyes of potential buyers. Leaseback also provides a range of advantages, which are characteristic for all leasing transactions. Tax benefits are commonly used. Within the operational leasing the lease instalments in whole constitute the tax deductible expenses, which means that thanks to the leasing we will pay lower CIT tax.

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What do you need to know? Regardless of numerous advantages, leaseback also has some limitations. Relatively small popularity with vehicle rental results from the fact that it is not always possible to make use of this solution. Due to high costs of servicing, companies specialising in full service leasing of vehicles let vehicles out only until they reach the age of about four. More over, the lease contract or long-term rental contract is con cluded for a period of two years minimum. This means that a company may make use of vehicle leaseback only when the vehicles’ age does not exceed 1-2 years. This example shows that although leaseback may turn out to be a very good solution for some companies, they will not always be able to make use of it. Author: Krzysztof Sosnowski Expert of the Polish Vehicle Rental and Leasing Association Operational Director, Member of the Board of Alphabet Polska Fleet Management

Methods of remarketing vehicles after long-term rental

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After the termination of the long-term rental contract the vehicles operated by the company using the fleet are directed to the secondary market. The process of remarketing the after-contract vehicles – roadworthy, well-equipped, serviced at ASO and with complete documentation – employs several proven solutions. The best moment to replace the fleet vehicles is at the end of the 3-4 year period of operation. The vehicles are still quite new and it is easier to find a possible buyer. However, the decision on replacing the fleet of vehicles depends on the company’s fleet policy and on other factors, such as the type of motor, make, grade and intended use of the vehicle. Ser vicing vehicles older than four years of age is more expen sive, and so is the current operation, thus the average cost of one kilometre increases.

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The process of remarketing vehicles commences on the day of terminating the agreement, when the user returns the vehicle. Then, an independent expert, on the basis of a detailed inspection of the vehicle, draws up the vehicle assessment report, taking into account its detailed specifi cation (among others make, model, equipment, mileage, type of fuel), technical condition (damages, condition of tyres, panel and paint repairs that had been made) and the valuation of the vehicle. Also, a photo documentation is attached to the report. One of the most frequently used methods of remarketing are internet auctions, where vehicles are resold to other companies, e.g. auto consignments or dealers. Usually, they are wholesale recipients, while individual purchasers also occur. After drawing up the vehicle assessment report the vehicles are directed to internet auctions, held periodically. All the vehicles are presented on an online platform at least five days before the auction, which allows the purchasers to get acquainted with the condition of the vehicle without having to inspect it personally. Before the beginning of the auction, a reserve price of the vehicle is quoted. The auction lasts for about 2-3 hours, so as to achieve a satisfactory price level, limiting the sales period at the same time. The auctions are anonymous: each of the bidders can see the highest offer but does not know who the offerer is. Modern online tools are convenient for the participants of auctions and employ many useful functions, e.g. automatic notifications about only the vehicles that are of interest to us, or setting maximum sums that a potential purchaser is ready to pay for a particular model of vehicle. A significant element of auction cooperation is the mutual trust between the contractors. On the one hand, long-term rental companies precisely check the entities participating in auctions and establish long-term relations with them. On the other hand, bidders also check the data of the sold vehicles. Another solution is the organisation of an internal tender in the customer’s company. The employees who had used parti cular vehicles until the termination of the agreement, have first option to purchase them on preferential terms. The principles of further purchase of the vehicle by its user are often a significant element of the company’s motivation p olicy. Thus, the entrepreneurs should quote the redemption price to the employee already within the framework of the v ehicle operation agreement, which settles the sale principles, as well as the standards of the vehicle operation. The employee, motivated by the warranty of the attractive redemption price – usually reduced in comparison with the market price with the agent’s margin, i.e. around 10-15% - will surely care about his vehicle and even get to know its service record. On the other hand, the employer gains lower costs of operation of the vehicle, which may compensate lower income at redemption.

Outsourcing & More | News

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Fleet management combines with maintaining full mobility of the company vehicles at optimal, i.e. relatively low, c osts. One of the key factors influencing the financial balance of operating the company fleet, is the remarketing of vehicles. During recent years a lot has happened in this field: E urope has been affected by an economic crisis and further recession, most companies implemented cost-reduction programmes, and the demand for new vehicles drastically decreased. In Poland, it was alike: among the recession-connected challenges affecting long-term rental com panies, the question of millions of old, imported vehicles, which appeared on our roads, arose. Author: Rafał Romaldowski Expert of the Polish Vehicle Rental and Leasing Association Manager of the Department of Insurance and Second-Hand Vehicles Sale of Alphabet Polska Fleet Management

Definitions of long-term vehicles rental Full Service Leasing (FLS) 1. Client’s fleet is financed by the means of operational leasing agreement, rental agreement, tenancy agreement. 2. Residual value risk is on the side of the financing party. 3. Duration of agreement: a minimum of 24 months. 4. It must include a minimum of three non-financial services (always including mechanical servicing). Leasing and Service (LS) 1. Client’s fleet is financed by means of an operational leasing agreement, rental agreement, tenancy agreement or financial leasing agreement. 2. Residual value risk is on the side of the user. 3. Duration of agreement: a minimum of 24 months. 4. It must include a minimum of two services, without requiring mechanical servicing. Only Fleet Management (FM) 1. Client’s fleet is not financed by the fleet management company. 2. Fleet management agreement is concluded for a minimum of 6 months. 3. Unlimited number of services from the list of non-financial services.

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Long-term rental of trucks

____________________________________________________ In 2011, a significant increase in the sales of new second division vehicles was noted. This had a positive impact on the increase of the value of assets financed via leasing in comparison to the results from 2010. According to the data of the Polish Leasing Association, in 2011, a 14.9 per cent increase was noted on the chattel financing market on a year-to-year basis. This result was largely thanks to the segment of trucks, in which the sale of new vehicles with allowable total weight above 6 tons was increased by over 45 per cent. The best results were achieved by the range of the tractor units. Here, the increase was more than 70 per cent and was associated with the reconstruction of the entrepreneurs’ fleets. Based on the data presented by the Polish Vehicle Rental and Leasing Association – gathering 16 companies dealing with long-term rental – at the end of 2011, cars in the fleets achieved a 11.9 per cent of increase on a year-to-year basis. Among the members of PVRLA, the only company dealing with the rental and management of trucks and delivery trucks is Fraikin Polska, which increased its turnover by more than 30%. This is due to great interest in this form of service, both from the large fleet customers and small customers. “Improvement of the situation on the market of road transport of goods, as well as the improvement of the financial capacity of the transport companies translated into good results obtained by Fraikin in 2011. The highest increase was recorded in long-term rental. Our company signed agree ments and realized deliveries for individual partners and insti tutional partners such as Poczta Polska (Polish public post service) or the Central Board of Prison Service. This illustrates the upward trend and dynamics of the truck market, as well as the high potential of the rental service” says Artur Nowicki, General Director of Fraikin Polska. From the point of view of Fraikin, forecasts concerning truck rental market for 2012 are optimistic. The fleet market is developing very rapidly. In 2011, a 9.9 per cent increase was noted on a year-to-year basis in terms of a number of new trucks of different types in the European Union c ountries. It is also optimistic that Poland was ranked seventh in the ranking of 27 countries, registering 20.9 per cent more second division vehicles than in 2010 (EAMA data).

Outsourcing & More | Main Topic

How often and for what reasons are fleets of trucks replaced?

____________________________________________________ The main reasons for the replacement of the trucks stock are the costs connected with the operation of these cars. As a group, we manage the fleet of over 64 thousand vehicles and our experience shows that their optimal economic lifetime is five years. This period mainly depends on the speci ficity of the activity of a given company: urban, regional or international use of vehicles, mileages, and also on the logistics and distribution process. We observe a high rotation of vehicles in fleets – for example – among the companies from the FMCG sector. Here, the key reasons are economic considerations, i.e. the need to reduce maintenance costs. Another aspect that is connected with the economic lifetime of the trucks in the fleets, is their reliability and quality, which also affects the company’s image.

above 3.5 tons was decreased by 18.5 per cent, and in the segment of the vehicles with an allowable total weight above 16 tons, the decrease was 15.7 per cent on a year-to-year basis. Pessimistic results were also noted in the case of the segment of tractor units, where the decrease reached 22.9 per cent on a year-to-year basis. (Source: www.pzpm.org.pl) According to the data of the Polish Leasing Association, the value of financing trucks on the chattel financing market, in comparison to the end of the first quarter of 2011, after three months of the present year, was lower by 8 per cent, particularly in the segment of trucks with an allowable total weight above 3.5 tons. Here, the decrease reached as much as 21 per cent. The first quarter of 2012 confirmed the initial assumptions – Fraikin Polska obtained good results, among others, thanks to the improvement of the situation on the market of road transport of goods and the improvement of the financial capacity of the transport companies. Our company signed agreements both with individual partners and with insti tutions such as Poczta Polska (Polish public post service) or the Central Board of Prison Service to which Fraikin Polska delivered 103 cars in February this year. This demonstrates the great potential of the truck rental service. ▄▀

Market of trucks after the first quarter of 2012 After the first quarter of 2012, a number of trucks regis trations indicates two dominant trends on the market. In the group of delivery trucks with an allowable total weight below 3.5 tons, an increase of 12.4 per cent in relation to the same period in 2011 was noticed. The number of the registration of trucks (new and used ones) with an allowable total weight

Author: Artur Nowicki Członek Polskiego Związku Wynajmu i Leasingu Pojazdów Dyrektor Generalny Fraikin Polska

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The global economy crisis significantly affected transport enterprises. However, in 2010 and 2011 the motor transport has been recovering its lost balance slowly but systematically. The surveys carried out by the Motor Transport Institute presented the situation of the first months of 2012 and the forecasts for the road transport of goods in next quarters of 2012.

Motor transport current situation and short-term forecasts

An economic trend index in the motor truck transport, representing existing and expected trends within the scope of basic activity of transport enterprises, reflect a situation of domestic transport companies. After a deep economic collapse that occurred in 2008 and 2009 the changes which predispose optimistically can be already seen in a general index trend. The economic trend index in the motor truck transport increases when a share of enterprises declaring a growth in transports in a current and next quarter in their question naires sent to the Motor Transport Institute rises, however, it decreases when a share of enterprises declaring a drop in transports grows. In the 1st quarter of 2011 a seasonal drop in value of the economic trend index in the motor truck transport was noted (from -15.0 in the 4th quarter of 2010 to -16.2). In the 2nd quarter its value improved slightly in relation to the previous quarter, however, it was still negative (-5.6). The value of economic trend index in the transport in the 3rd quarter of 2011, just as in two previous quarters, was still negative (-6.4). But the situation became worse in relation to the previous quarter, however, for comparison, in the ana logous 3rd quarter of the previous year, the index value was positive (+3.4). The last quarter of the past year brought a significant drop in the index value, to the level (-29.8). It should be noted that beginning from the first quarter of 2011 and ending at the fourth quarter a proportion of companies that noticed a drop in the size of transports increased systematically as well as a proportional share of companies noticing a growth in the size of transports decreased. In 2011 from among the companies that participated in the surveys, on average, 51 percent of companies declared that they undertook no investments, 31 percent of companies declared that they carried out the investments at the same level as in the previous quarter, 10 percent of companies stated a decrease of investments and the rest of 8 percent of companies stated an increase of investments.

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As to the purchases of truck fleet, in 2011, on average, 49 percent of respondents made no purchases at all, 32 percent of respondents confirmed maintenance of purchase size at the same level as in the previous quarter, 12 percent of respondents stated an improvement and 7 percent of companies noted a decrease of the level of truck fleet purchases. The difficulties in the purchases of truck fleet resulted among other things from restrictions in giving credits by the banks. Summarizing the last year, it should be noted that the answers of the respondents to most questions included in the questionnaire do not fill with excessive optimism. The forecasts for the next quarters indicate maintenance of pessimistic trends in expectations relating to the situations of surveyed enterprises. The value of the economic trend index in the motor truck transport in the 1st quarter of 2012 was negative (-26,2). While it is true that the situation improved to a certain extent in relation to the previous quarter but a comparison to an analogous period of the previous year when the index value came to -16.2 prejudges general worsening of the economic trend in the transport. One forecast for successive quarters of 2012 is enough optimistic according to the respondents’ opinion: fewer companies than so far foresee a further de crease of the size of transports and more companies a ssume that the size of transports will increase. Apart from the economic trend index, the economic con dition index and transport capacity index are also important measures related to the survey of functioning conditions of transport enterprises. The economic condition index is calculated on the basis of the respondents’ answers on a general and financial situation in the enterprises. In the 1st

Outsourcing & More | Main Topic

As to the purchases of truck fleet, in the 1st quarter of 2012, 51 percent of made no purchases at all, 33 percent of res pondents confirmed maintenance of purchase size at the same level as in the previous quarter, 9 percent of respondents stated an improvement and 7 percent of com panies noted a decrease of the level of truck fleet purchases The forecasts for the next quarters allow to express an optimistic opinion that this situation will change advantageously.

quarter of 2012 the value of this index at the level of -32.9 was less advantageous than in the previous quarter what means that more transport companies noticed worsening of general and financial situation in the 1st quarter of 2012. The transport capacity index that reflects the changes in the number of trucks engaged in the load transports and the size of purchases of trucks reached +0.10 in the 1st quarter of 2012, i.e. it was slightly more advantageous than in the p revious quarter when it came to -0.6. It means that in the 1st quarter of 2012 in comparison to the previous quarter a proportion of companies that noticed a growth in the number of trucks utilized for the load transports and a growth of purchases of trucks increased. The respondents asked about debts showed a real state of debt burden in the 1st quarter of 2012 at the level less advantageous as in the previous quarter. In the debt burden forecasts for the next quarter, i.e. the 2nd quarter of 2012 the respondents foresee that their debt burden will decrease. The carriers asked about delays in the payments made by the clients for the transports showed an increase of these delays. The forecasts for the next quarter foresee an im provement in relation to this issue. As much as 53 percent of surveyed transport companies declared that they undertook no investment in the 1st quarter of 2012 and 36 percent of companies stated that they c arried out the investments at the same level as in the previous quarter. Only 5 percent of companies reported an increase of investments and the rest of 6 percent of com panies declared a decrease of investments. The forecasts for the 2nd quarter of 2012 are fairly optimistic.

For many quarters the high costs of the conduct of transport activity have been the most often mentioned barrier hampering development and efficient function of the transport enterprises. In the 1st quarter of 2012 this issue was signalled by as much as 77 percent of respondents. As to the other barriers, the companies most often mentioned an inadequate demand for transport services (48 percent of respondents) as well as difficulties in getting credits for fleet purchase and current activity (11 percent of respondents) and problems connected with recruiting and employing staff for the load transport, including drivers (11 percent of respondents The respondents paid also attention to untimely payments made by the clients for provided transport services and u nfair competition, including lowering the rates for the transport services. The economic trend in the motor truck transport is a result of existence and interaction of many factors that form a situation on the transport market. The economic trend depends among other things on: demand and supply, costs of the conduct of transport activity, prices of fuels, situation on the employment market, competition of domestic and foreign carriers, fiscal situation and others. Just as it is difficult to develop precise forecasts for the entire economy it is not easy to assess at present what economic trend for the road transport of goods will be borne by the coincidence of afore-mentioned factors in the last months of 2012 and further in 2013. One thing is certain – the entrepreneurs themselves are wary in their opinions. ▄▀

Author: Artur Łeszczyński Project Manager Fracht FWO Polska

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Interview with Bartłomiej Dębski, Chief Executive Officer of Cartrack Polska In recent years many companies offering GPS Vehicle Tracking and Fleet Management Systems have emerged on the Polish market. However, most of them only pro vide the basic localization service with only a few able to offer professional and reliable support systems for ve hicle tracking and fleet management processes. These solutions can be applied not only in administration, but they also enhance the operation of companies in such areas, as customer service, sales and logistics. A thoug htful and conscious choice of the GPS tracking system supplier is a guarantee of the clients’ fleet s afety and signi ficant reduction of its maintenance costs. Acc ording to market research, companies which introduced the system managed to reduce the overall fleet operation costs by up to 40%. In order to familiarise the readers of Outsourcing & More magazine even better with the benefits of implementation of such systems, I have conducted an interview with Bartłomiej Dębski – Chief Executive Officer of Cartrack Polska – one of the leading companies p roviding solu tions for fleet management on Polish and international market. O&M: Mr Dębski, can I ask you to introduce the Cartrack company? Bartłomiej Dębski: Cartrack is part of an international holding which has been operating for over 10 years in 14 countries. The company has over 2000 employees and it will be launched soon on the Stock Market Exchange in Johannesburg with an estimated market value of 200 million euro. Every day, we track over 400 thousand vehicles all over the world, offering our clients the highest quality service and safety. The amount attests to our experience and makes us one of the biggest and most experienced companies in the world in terms of fleet management systems and protection and recovery of stolen vehicles. O&M: What makes you stand out and how your clients can benefit from it?

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BD: One of the principal aims of the founders of the C artrack holding company was to deliver a comprehensive and reliable solution based on our own manufacturing of software and appliances. This makes us one of the few companies which can deliver a service based solely on our own products. We also have a mobile team of service technicians available 24/7 who install devices across the whole country. This means that our clients can use a solution adapted to their needs and expectations. I would also like to stress that we offer an outstanding after-sales service based on our experts’ profe ssional advice starting from the implementation and through further stages of cooperation with the client.

Outsourcing & More | Interview

O&M: What is the demand for such services in Poland? BD: There is a huge demand. Frankly speaking, every serious manager wants to be able to ensure that he is “in control” of as many work processes as possible. “Always in control” is the motto of our company. Our mother company is using the slogan „Putting you back in control” which is perhaps even a better reflection of the benefits of using our system, visible just after a couple of weeks. Managers are often surprised by this first impression. All persons who manage work processes, by signing r eceipts for fuel or repair of operating parts of vehicles need to ask themselves if they use their budget sensibly and if the out goings are on an appropriate level. Our system helps you find the answer to these questions. To sum up, we can ask who does not want to make savings today? Who wants to earn less? I think my answer to the question is quite exhaustive. O&M: How do your services relate to outsourcing? BD: The connection is quite strong and simple: outsourcing consists in improving certain areas of operation by dele gating specific tasks to external specialist firms. This should lead to the improvement of the quality of services, the redu ction of costs and increasing your control. We have the tool which allows you to achieve the set goal. We offer solutions to outsourcing companies and sometimes also directly to their clients. As a result, people in charge of the costs of company vehicles, those who supervise the sales, distri bution or s ervice, save time and reduce costs, which even

tually has a direct impact on the value of their offer. I also wanted to say a few words about quality assurance and safety. Companies which outsource certain services often wish to verify how their suppliers operate. And those con tractors which put quality first, willingly present the results of their work to their employers, by granting access to visual insight or management reports, containing for example the details of the timeliness of deliveries, the number of service calls, the number of visited clients. By selling a promise to deliver a particular service, outsourcing companies can enhance their credibility by allowing the client to monitor the progress made. This offer is very appreciated, especially when it c omes to finding new partners in business. O&M: You mentioned the safety aspect, could you give us some examples? BD: We have a proven record of recovering vehicles which contained high value stolen goods, such as electronics or tobacco. Our system also notifies you about such instances, as unauthorised access to the cargo space or battery voltage drops. There is also one more important aspect, rarely dis cussed though: the recovered vehicle is always the vehicle its user has known from the beginning of its exploitation. The user knows its history, repairs, strong sides and poor sides. Unfortunately, the history cannot be compensated for by the funds provided by an insurance company after the loss of a stolen vehicle; especially if the value of the vehicle dec reases substantially every year. O&M: So everything seems to suggest that the only obstacle is the number of vehicles on the market?

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BD: Of course, but there are other deterrents too. For exam ple – our society still thinks that GPS vehicle tracking is a form of invigilation which has a destructive effect on the organi zation and positive relations within it. Fortunately, company vehicles in Polish companies are dealt by specialists, fleet managers, whose knowledge and experience correspond to our vision. I always ask my clients how we want to build our business – on quality and professionalism or on lack of knowledge?

dards of work. I think this gives us a lot to think about. Trying to analyse the situation described above, I think that every management or every company owner will be willing to accept that the GPS vehicle tracking system is not a form of invigilation, but a useful tool which helps reduce the ope rating costs of a company, which many of our clients have already learned. Please note that the GPS vehicle tracking system is one of the few services, next to a mobile phone and internet access, which can be offered at a very comparable price? Without such services, modern companies will find it harder to cope. Those who decided to implement the system, cannot ima gine working without it at later stages. The saving of 30% on petrol and general maintenance costs, noted in almost every single instance, is an undeniable argument. In reality, it means the return on the investment in Cartrack system is instantaneous. O&M: Are you saying that every company, regardless of the size of its fleet, can reduce the costs of its maintenance? BD: Of course! Our system allows every user to measure and report all the factors specific to certain business or industry very exhaustively and precisely. I would like to mention that the preventive aspect and users’ awareness of the imple mentation of the system in the vehicles are hugely important. This usually results in either a decrease in mileage or more “ethical” behaviour on the road, right from the start. O&M: What would you like to say to companies which do not use the CARTRACK system yet?

Let me use the trivial example of a driving centre which pro vides services in another country and decided to implement our system in a fleet consisting of over 50 vehicles. When the results of the implementation were presented, it turned out that the number of hours performed in accordance with the schedule was 2.5 times lower than the number of hours performed by driving instructors who carried out the work on their own and using company vehicles. Hoping to improve the situation in the following months, the anonymous results were presented to all employees, with no intention to take any appropriate measures. However, the final result was quite surprising, as 35 of 50 driving instructors employed handed in their notices. They could not accept the new stan

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BD: First and foremost, I would like to encourage company owners, people driving company vehicles, fleet managers and sales managers to contact us in order to book an app ointment with our specialist adviser at your convenience. During the appointment you will be able to identify the areas in which Cartrack system could help you reduce your costs and improve your effectiveness. O&M: Thank you for the interview. BD: My pleasure. ▄▀

HOTLINE: 666 202 000 www.cartrack.pl info@cartrack.pl

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