The Advanced Business Services & Technology Sector

The Advanced Business Services & Technology Sector

Overview Romek Lubaczewski PwC

KRAKÓW is a Maturing Market BUSINESS BENEFITS Quality Strategic Benefits The ability to implement and control change. Management team focus on strategy and not daily operational issues. Cost Elimination of duplicated crosscountry effort. Reduction in operating cost by re-locating to a lower cost country. The ability to implement best practice standard processes. Specialisation to increasing efficiency and improve service levels. Better service through unified processes and technology. Improved control. Enable bolt-on capabilities for potential, future acquisitions. Easier and cheaper to roll out ERP. Source: PwC SSC Advisory, 2014

Shared services, outsourcing & IT centres in Poland 3k SZCZECIN Arvato Services Coloplast Genpact Stream Global Services Metro Group Tieto UniCredit Unizeto Technologies POZNAŃ Amazon Arvato Services Carlsberg 6k Dalkia Duni Franklin Templeton Jeronimo-Martins Carl Zeiss GSK WROCŁAW IKEA ACP MAN Alstom Roche CAN Credit Suisse Diehl Controls Fagor Geoban Google SSC HP 12k IBM Irevna KPIT Cummins Luxoft McKinsey Microsoft Mphasis Nokia Siemens Networks Opera Software PNC (PFPC) QAD Remy International Ruukki Siemens Tieto UPS Volvo Wabco Whirlpool GLIWICE Ista Pregis Saint-Gobain GDAŃSK Acxiom Arla Foods Bank BPH/GE Capital Bayer Fineos First Data Geoban Kemira Metsa Sii Sony Pictures Thomson Reuters WNS KATOWICE Capgemini Grant Thornton HireRight IBM ING PwC SSC Rockwell Automation Steria 7k CZĘSTOCHOWA TRW BYDGOSZCZ Alcatel-Lucent Atos Origin BIELSKO BIAŁA Fiat SSC Żywiec Source: ASPIRE, January 2014 LUBLIN Genpact Orange 6k DĄBROWA Alba Arcelor Mittal Wipro 9k 12k ŁÓDŹ Accenture Atos Origin BSH CERI Citi Financial Fujitsu Services General Electric HP Indesit Infosys Nordea PCT SouthWestern WARSAW Accenture Aviva Avon CBRE Outsourcing Citibank Colgate Palmolive Elavon Esselte Euronet GE GSK Goldman Sachs Itella Information Jones Lang LaSalle Lionbridge Oriflame Procter&Gamble Roche RBS RS Components Schneider Electric Sitel Stanley Symantec Tchibo Wipro Wincor-Nixdorf ABB Accenture AMS Amer Sports Amway Antenna Aon Hewitt Apriso Arvato Finance Assa Abloy BNP Paribas Brown Brothers Harriman Capita Capgemini CBB KRAKÓW 35k CH2M Hill Chatham Financial Cisco Clifford Thames Comarch Connect2Media Delphi Deutsche Telecom EDF Electrolux EPAM Estimot Ericpol Euroclear Euroscript Farnell element14 FMC Technologies FQS Fujitsu GE Healthcare Genpact Google R&D Hays HCL HEINEKEN Herbalife Hitachi HSBC IBM International Paper Kenexa Lastminute Lufthansa Lumesse Lundbeck Luxoft Making Waves Mota-Engil Motorola Nokia Ocado Technology Oracle Perkin Elmer Philip Morris Rolls Royce RWE Sabre Samsung Sappi Serco Shell Sii State Street Services Stefanini Tesco UBS UPM Valeo Vesuvius Xerox

Leading BRANDS

Top 50 Global Outsourcing Cities 2007-2014 - Top Cities in Central & Eastern Europe Source: Tholons Top 100 Cities for Global Outsourcing 10 Kraków 20 Prague 30 Budapest Brno Warsaw 40 Bucharest 50 Bratislava Sofia 2007 2008 2009 2010 2012 2013 2014

Top 50 Global Outsourcing Cities 2007-2014 - Europe s Top 2 Source: Tholons Top 100 Cities for Global Outsourcing 5 Dublin 4 5 6 7 8 9 Kraków 9 10 11 11 10 Dublin 10 15 Kraków 16 15 14 2007 2008 2009 2010 2012 2013 2014

Evolution of the Business Services Sector... The Old: Basic Accounting Call Centres Payroll Data Processing 20% 2015 Forecast The New: Analytics Audit & Compliance Software Development Marketing Investment Fund Servicing

Kraków 2013 Headlines New entrants 11 Companies that added 200-500 jobs 12 Accenture Arvato Finance Herbalife GE Healthcare Lundbeck Ocado Technology Sappi RR Donnelley Technology RWE Samsung Stefanini Brown Brothers Harriman Capgemini Cisco Systems Comarch Euroclear HEINEKEN HSBC Lufthansa Global Services Sabre Holdings Shell Business Services State Street Services UBS 35,000 jobs Tholons Ranking 1st Kraków has replaced Dublin as the top ranking location in Europe.

OUR BUSINESS CREATES JOBS New jobs in advanced business services and technology, 2000-2015 38 000 Today 50 000 20% 2015 Forecast 37 500 New jobs created every year in each of the last 5 years 32 000 38 000 27 000 25 000 14 000 16 000 19 000 22 500 Headcount 12 500 11 000 1 000 1 500 2 000 2 500 3 000 4 000 6 000 8 000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: ASPIRE Headcount Tracker and AG Test

Our Business supports the development of modern OFFICE SPACE Companies in the advanced business & technology services sector are driving the development of class A office space in Kraków 2015 Forecast 37% 63% Centres lease approx. 330,000 square metres of class A office space out of a total stock of 530,000 square metres An additional 115,000 square metres of office space is being delivered in 2014 Advanced business & technology services Other

Transport Strategy As the sector grows so too does the need for a transport strategy to accommodate the sector s commuting needs 9 200 Ols zanicka Księcia Józefa 10 000 Orla R zepichy Mirowska Topolowa Balicka C hełmska LEGENDA Podłużna Tyniecka Krakowska Skotnicka Balicka Królowej Jadwigi Liczba pracowników LICZBA KURSÓW TRAMWAJÓW 19-39/godz. 10-18/godz 1-9/godz Pasternik 10 000 Księcia Józefa Księcia Józefa Karola Bunscha Armii Krajowej Józefa Babińskiego Jasnogórska Królowej Jadwigi 6 200 Bronowicka 20% Aleja Kijowska Królewska Armii Krajowej Nawojki Czarnowiejska Tyniecka Piastowska Kobierzyńska Zawiła Władysława Reymonta Aleja 3 Maja Opolska Aleja Marszałka Ferdynanda Focha Księcia Józefa Tadeusza Kościuszki Karmelicka Zwierzyniecka Marii Konopnickiej Straszewskiego Dunajewskiego Gen. Bohdana Zielińskie go Monte Cassino Józefa Di e tla Kobierzyń s ka Wrocławska Józefa Wybickiego Mickiewicza Kapelanka Krasińskiego Zakopiańska Wadowicka J ugowicka Słowackiego Prą dnicka Prądnicka Długa Basztowa św. Gertrudy Stradomska Opolska Westerplatte Pawia Warszawska Krakowska Kalwaryjska Księdza Józefa Tischnera Podmokła Jerzego Turowicza Zbigniewa Herberta Grzegórzecka Starowiślna Aleja 29 Listopada 8 600 Stare Miasto Wita Stwosza Lubicz Bronis Rakowicka Podgórska ława Limanowskiego 12 100 Aleja 29 Listopada Kotlarska Aleja Powstańców Śląskich Henryka Kamińskiego Wincentego Witosa Stanisława Stojałowskiego A4 9 200 al. Beliny-Prażmowskiego Wielicka Powstańców Lublańska Aleja Generała Bora-Komorowskiego Grochowska Józefa Brodowicza Olszyny Aleja Pokoju Pilotów Hen ryka-grudzińskiego Nowosądecka Młyńska Janusza Meissnera M ogilska 8 200 Cechowa Nowohucka R. K uklińskiego Lipska Aleja Jana Pawła II Aleja Pokoju Bieżanowska Wielicka Izy d ora Stella-Sawickiego Nowohucka Wiślic k a Koso c Aleja Generała Władysława Andersa Mieczysława Medweckiego A4 icka Generała Leopolda Okulickiego Marii Dąbrowskiej Aleja Jana Pawła II Aleja Pokoju Leon ida Teligi Mikołajczyka Broniewskiego 5 800 Bieńczycka Jana Surzyckiego Rybitwy Mała Góra Półłanki Karola Łowińskiego Półłanki Kocmyrzowska Aleja Solidarności Aleja Jana Pawła II Tadeusza Ptaszyckiego A4 Podpięty Tadeusza Śliwiaka Ujastek Mogilski Ujastek Igołomska Jerze go Giedroycia Igołomska Source: Knight Frank, 2014

Our Business has significant COMMUTING NEEDS 12,600 people 36% 22,400 people 20% 2015 Forecast 64% Public transport Private transport 35,000 people commute to work on a daily basis. This puts a strain on the transport system, especially between 8-9 a.m. and 5-6 p.m. Bicycle paths 4% travel to work by bicycle Parking 30% travel to work by car

Our Success Story is being written by Kraków s YOUNG PEOPLE The quality and the value of our services stems directly from the potential of our staff pool The multicultural skills, abilities, the sensitivity to diversity all these are the characteristics of our people which are not widespread in other global locations 20% The industry offers unique opportunities for learning and development 29 Average age of people working in Kraków centres 70% 83% % of staff with a university degree 7.9 Kraków centres provide career opportunities to Kraków graduates, keeping the best talent in the city Our centres - like universities - aspire to be centres of learning and excellence We also attract young talent from across Poland and other parts of the world % of staff that are graduates of Kraków universities Average Training days per year per employee

Our Business is dependent on LANGUAGE and CULTURE Top 10 Languages 1% equals approx. 300 people 86% 15% 14% 94 Countries served from Kraków centres 36 Languages utilised in Kraków centres 11% 2015 Forecast % of foreign nationals working in centres 11% 5% 4% 3% 2% 2% 1%

Our Business develops MANAGERS & EXPERTS 14% of staff are in management positions 5,000 2015 Forecast General Management 1% Operational Managers 3% Team Leaders 10% Operational Staff 86% Managers ASPIRE Market Survey 2014

Our Business delivers ECONOMIC VALUE 133k PLN Annual value to the local economy of each job created in the advanced business services and technology sector ASPIRE Market Survey 2014 4 655m PLN Total value of the sector annually to the economy of Kraków ASPIRE Market Survey 2014 2015 Forecast 6 116 PLN 3 878 PLN 57% Average gross monthly salary per employee within SSC/BPO/IT/ITO sector ASPIRE Market Survey 2014 Average gross monthly salary in enterprises employing more than 9 employees. Polish Statistical Office, 2012

Shared Service Centres (SSC) Magdalena Włodek Philip Morris International (PMI)

Companies ASPIRE members representing Shared Services sector are some of the world s biggest global brands: Philip Morris, Shell, Heineken, Amway, ArcelorMittal Definition SSC is a separate organisational entity providing services (i.e. accounting, IT, payroll, HR, logistics etc.) for internal clients within a geographically scattered corporation or capital group Range Apart from transactional processes, the centres provide more and more complex added value functions (eg. tax or legal advisory), to improve the levels of expert knowledge and offer their employees more development opportunities People SSC in Kraków attract not only talented Polish graduates using many foreign languages, but also young people from across Europe offering them jobs in multicultural environment, access to professional training and attractive career paths

Business Process Outsourcing (BPO) " Wojciech Popławski Accenture

Companies ASPIRE members representing BPO are among others: Accenture, IBM, Capita, AON Hewitt, AMS, Genpact Competence BPO providers are the global corporations operating accross all continents and typically combine mutliple capabilties from bussiness process management for the exteral Clients, strategic advisory and technology solutions. Range BPO providers deliver services to the largest international companies and brands across all industries in the fields of Finance & Accounting, Human Resources, Supply Chain, Procurement, Marketing and more.

Graduates Companies in this market segment are the largest single employers of the entry level profiles creating the first time job opportunities for the university graduates. The comprehensive global and local training programs help developing the broad range of competences and Languages BPO sector in Central Europe primarily attracts the multilingual candidates (including foreigners) and develop highly educated workforce working for the largest global brands who gain the international experience without a need of leaving Krakow very often being the best City advocates who bring more work to Poland. Impact BPO providers contribute to attracting a number of new foreign investors to Krakow, who initially got to know the location and talent potential thru the cooperation with BPO companies from Krakow.

Financial Services " Scott Newmann State Street

Companies ASPIRE companies representing Financial sector: HSBC, Goldman Sachs, State Street, Euroclear i Brown Brothers Harriman Range Wide range of services being provided incl. Investment Fund Servicing, Hedge Fund Administration, Derivatives, Portfolio Analytics, Private Banking and Asset Sector creates high value, advanced products, services and technologies Growth Substantial future development plans Impact Added value and benefits for the city Career The sector attracts industry professionals to Krakow from all over the world People Our investment in Training & Development is core to the sector

Technology " Wojciech Burkot Google

Companies ASPIRE member companies representing advanced technology sector are some of the biggest global brands such as: Sabre, Motorola, GE Health, HCL, EPAM, Ocado, Akamai, Cisco, Google Innovation Technology centres enable the establishment of new innovative start-ups using open access technologies (API, open source ). These technologies are also available for universities through opening of labs, funding research scholarships as well as providing lectures Range Technology centres main business area is software development but they also provide services complex systems traffic maintenance as well as training activities People Approx. 6000 employees are solving problems on global scale mainly. During recruitment process we need to compete with all the attractive global locations such as Berlin or London in Europe or the Silicon Valley

Vision for Kraków

Our aims " We aim to benefit from the out-shoring trend " BPOs, SSC, Financial Services & IT Centers bring organizational and technological solutions which drive progress and innovation. " We need to attract skilled students and employees to Krakow so we can climb the value ladder of our parent companies by attracting more complex work.

Cooperation triangle Universities the City Municipality role: " influencing curricula, promoting climbing up the value ladder for new centres; " funding diversity programs Companies Innovators

Cooperation triangle A key for the future city s development is cooperation within the triangle - moderated by the City Council. " Kraków s development history clearly shows that cooperation between potential competitors helps to grow the cake (and benefits) for all parties

Cooperation

Transport Innovation Promotion Potential areas of cooperation Education Non-Polish nationals Consultation

1 Transport & Infrastructure " Bicycle Paths connecting central transport hubs and housing areas to major office developments e.g. Bonarka, Krakow Business Park, Kazimierz, Bronowice Development of a Central Business District (CBD) to better compete with other cities, rationalize infrastructure development and enable effective management of zoning with developers Transport from the airport to the city centre e.g. Metro Increased availability of parking near to major office locations Road repairs and working together to identify and optimized schedule to avoid significant disruption to roads and the transport network

2 3 Promotion of the sector Work together with ASPIRE to promote the sector and member organizations and their career opportunities Promote the sector outside Krakow in other Polish cities to attract skilled workers to come and work in Krakow, e.g. develop a relocation incentive " " Support for Foreigners & People from outside Krakow Work together to help provide assistance to foreigners to navigate through local bureaucracy, e.g. registration at the Department for Foreign Affairs Assist foreigners with integration into the local community e.g. where to go for help and information, documentation in multiple languages, Web-site for foreigners in Krakow

4 5 Consultation with the Sector Actively collaborate with the sector to consult on policy decisions which may directly impact the sector and the workforce e.g. childcare " " " " University collaboration Collaborate to develop curriculums which help students to better prepare for a career in a multi-national organization, e.g. More internships, public speaking, project skills, business language classes

6 Innovation Stimulating the development of local firms which target their products and services at the sector (solving communication or parking issues) One common list covering the needs of both the city and sector, that would define the city s Demand for Innovation

Projects Challenge Market saturation create impact location competitiveness vs. other cities in Poland or CE Aim Continued employment growth should be synchronised with the relevant increase of talent supply (nominal increase of the graduates or the structural change of the profiles / educational steams fitting the jobs offered by the sector) Actions Joined analytics program that aims analysing the students/graduates migrations (in/out) and the alignment of the competences of graduates to the jobs offered by the sector. The outcomes / insights should aid the city and universities authorities in decision making around the new sources of talent outside of the near region and modification of the educational streams / programs including the hands-on languages skills beyond the typical western languages. ASPIRE members are interested in participating on the educational programs and more structured internship projects.

Projects Challenge Adapting the transportation infrastructure to the sector requirements Aim Optimizing the transportation network taking into account the business service sector requirements improve the workforce mobility and work life balance what is in the center of core values of business services organisations. Actions Joined analytics program to create the interactive comuting routes of the sector employees (office, schools) to optimizethe public transportation network in the city, working ours flexibility and reduction of the cars traffic.

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