Kraków is the first Eastern European city to appear in report "Top 100 Outsourcing Destinations", prepared annually by Tholons. The only locations higher up in the ranking are Indian and Philippine cities, and Dublin.
In Specialists' Hands
The term "outsourcing" is the abbreviated version of the expression "outside-resource-using". This is not a new term, as it has been functioning from the 1970s onwards, initially as a part of the vocabulary used by the directors of production plants. Later on, this mode of working spread to other sectors, so that nowadays it functions in virtually every industry.
Outsourcing is based on the simple principle that if we are not able to perform a given task better than the competition, it is more efficient and profitable to commission it to an outside company which specialises in this particular service. There are two main domains of business where outsourcing is used the most frequently, i.e. supply and services for particular sections of an enterprise. The latter has brought about the development of modern business services.
Higher than Shanghai
Tholons is an international counselling company active in the outsourcing and investment sectors. The annual report "Top 100 Outsourcing Destinations" indicates the most attractive locations for the outsourcing sector. Scoring a high position in the report is a distinction for the cities, considering the growing importance of this sector.
In the latest report, Kraków scores the 10th position, which means that the city is ahead of Shanghai. It is also the first Eastern European city to reach such a high position. Tholons's ranking lists two other Polish cities, Warszawa and Wrocław, which are on the 36th and 75th position respectively.
The report divides cities into several groups: the emerged, emerging and the next emerging outsourcing locations. The analyses are based on a variety of factors, such as the quality and quantity of human capital, investment risks, the quality of life, and the costs of running an enterprise
Over the recent years, the number of employees in the shared services centres and outsourcing sectors in Kraków has been steadily growing – presently, it amounts to ca. 18-20.000 people, which is a lot compared to 2.000 in 2003. Kraków owes its high position on the international SSC/BPO market to its base of very well educated and prepared specialists, good infrastructure and relatively high living standards of the citizens – says Kinga Kurpiel, Advisory Consulting Senior Associate at PwC.
The Tholons report highlighted the so-called "Big Three": South-East Asia, Southern America and Eastern Europe (including Poland), which hold the potential to continue further development in the outsourcing sector. Therefore, in the future Kraków may continue to strengthen its position of the local leader in the modern business services sector, and work it way up the Tholons ranking.
Outsourcing in Kraków
The main asset of Kraków-based centres is a wide range of business services, from transactional to comprehensive counselling services. Combined with a large amount of graduates, good command of foreign languages and relatively low costs, they constitute Kraków's great potential and make it an investor-friendly city – adds Kinga Kurpiel.
How does the development of the BPO/SSC sector influence Kraków? First and foremost, it creates new jobs, thanks the which the citizens' quality of life and the amount of income are rising. Moreover, it is of great importance for the commercial real estate sector. New outsourcing companies need modern office space. The investors, recognizing this potential, commence more and more projects to meet the BPO/SSC companies' needs. Finally, the development of the sector strengthens Kraków's position as an investment location, enhancing progress and attracting foreign capital.