BPO needs space

Business Process Offshoring (BPO) "involves a company hiving off and transferring non-core functions to other countries", in the McKinsey & Company report's words, mainly to reduce costs via the lower salary expectations that exist in non-Western countries. Originally an American practice, it happens commonly enough these days in European countries such as the UK, that firms move their call centres, to take one example, to locations such as India, where there are large numbers of fluent English speaking workers, who are paid far less than their British counterparts. McKinsey & Company claim that soon that Poland could be next to benefit, though other services given to offshore processing, such as accounting or bank transaction processing, are more likely to be attracted here. Poland's "similarity to Western Europe," according to the report, "makes it well positioned to become a BPO centre for Europe". If that is the case, then a lot of firms are going to be on the look out for office space to accommodate these services. Office space: not warehouses, not factories, it's clear enough why.

Why Poland is special

Richard Mbewe of the Warsaw Investment Group is also upbeat on Poland's prospects for attracting BPO and gives three reasons for being so: "the first is its location in the heart of Europe, the second, the very highly-qualified manpower that it can offer, who are also very ambitious, in that they strive to learn other languages for example, (and not just English: German and French as well) and the third is that when Poland joins the EU, it will need a special product to offer its fellow members, as Ireland, for example, has with IT technology and London has, as the EU's financial centre, and this sub-sector for Poland could be services." Need we add as well, that labour costs this end of Europe are also comparatively low, apart from its having finely-tuned skills. "An accountant in Poland is as good as any in the UK," adds Mbewe.

The tenant of tomorrow

For those companies coming to Poland to 'business process offshore', Warsaw's CBD is not the most likely destination. Where high-tech communication with the world as a whole, rather than just the commercial hub of one country, is of vital importance, there is little reason to work from expensive, downtown office space. Both current, (though modest) trends and the predictions of the experts, suggest that the regions and the outer-lying districts of the capital, might be the ones to benefit from any influx of FDI, in the form of BPO. "It's not rocket science," says Maciej Gołebiowski of CB Richard Ellis, "where there are lower wages and rents but university-educated English speakers, there is a lot of interest." He cites the example of electronics firm Philips' move to Łódz, to set up its accounting and finance centre for Europe, (which CBRE were involved in) and others such as Citybank's outsourcing to Olsztyn. These companies have been operating in Poland for some time. There are, however, a number of tangible rumblings which suggest that others will be setting up BPO operations here in the near future for the first time. The German airline Lufthansa made a groundbreaking move in March this year, by opening its Airline Accounting Centre (AAC) in Kraków, as a separate company. The reason for moving to Kraków, was that AAC were "delighted with the high level of candidates". The move was also part of a cost-cutting exercise, involving the wholesale centralization of Lufthansa's administrative sector. The relocation also involved AAC taking up 1,000 sqm at the 10,000 sqm office building on Aleje Pokoju, (developed and owned by the Polish firm Azbud), where it will eventually employ one hundred and fifty people. No leasing agent was involved in the deal. Another German company, Bayer Business Services, part of the Bayer Group, is also pondering a BPO move to Poland. "Bayer Business Services is looking for possibilities to set up regional service centres for business process outsourcing in Europe," acknowledges the Head of Communications Dietmar Bochert, and, "one of these options could be a service centre for finance and accounting services in Poland."