Industry news

In between Europe and The Americas, Portugal stands to capture the new wave of tech innovation investments. After being hard hit by the 2008's global financial crisis, the country is showing promising growth signs. At the forefront of the recovery is the Portuguese IT industry, which is gathering the attention of tech companies, multinationals and VC firms.

Portugal is in the same time zone as London, with world-class telecommunications infrastructure and a high-quality education system that makes it 15th out of 72 countries in English proficiency, this sunny country has opportunities until recently left undiscovered by tech firms. Its mature legal and fiscal environment, government incentives to investment, and political stability, among the other characteristics presented above, led Gartner to place it in 5th best country for captive or outsourced IT and business process services in 2015.

Culture is another reason why the country has been gathering such buzz, besides the well-known climate and cuisine, Portugal has a high educational quality with several thousand new IT graduates entering the job market a year with western standards of performance. Indeed, one of the major worries of companies experimenting with outsourcing is the level of culture compatibility between the head office and the team overseas; a challenge that is greatly diminished by the similar business culture between Portugal and the rest of the Western world.

To get ahead, companies need to cut costs while still being able to improve the quality of their end product. This was the conundrum of the 20th century, however, with globalization and the disruption of international markets due to technological innovation, the 21st century's answer to it has but one name: nearshore - the establishment of a dedicated team of developers in a foreign country. Portugal's labour costs are about 50% of the EU average and there are several government financial and tax incentives should you decide to set up a business here; which is also increasingly easy to do so due to bureaucratic reforms in recent years, you can now create a business in 2.5 days (4th fastest country in the world).

Lisbon, Portugal's crown jewel, is increasingly talked about as one of Europe's leading innovation hubs. The capital was the first one to be awarded with the European Entrepreneurial Region of the Year in 2015 by the EU's Committee of Regions and is rated by an Allianz 2016 study as the 5th best performing startup community in Europe. Adding to it, the city also boasts a high quality of life, low cost of living and is listed as one of Europe's safest cities.

At Lisbon Nearshore, we are keen to provide the very best nearshore and staffing services to help your business reach its goals. We are proud to have in our ranks some of the best developers around, a talent which has been recognized by our clients. To work with us is akin to have an extension of your in-house team, a perfect combination of onshore and nearshore teams, but less costly and more flexible. An authentic connection, in the same time zone, you can expect a pragmatic, iterative agile approach to your projects without experiencing global time zone or cultural challenges, with high quality outcomes. Our Nearshore team will be dedicated to your Project for an agreed timeframe alongside your specific requirements, and can be blended to include Technical Coordination, Solution Architecture and Project Management. We provide world-class development capabilities that can be employed at half (or lower) of central Europe costs, high level of English proficiency, modern telecommunications infrastructure, tax incentives and a favourable business environment.

By Lisbon Nearshore, visit their website here and find out more about Portugal as an attractive business destination.

The Government yesterday confirmed that with the support of Harvard University it intends to restructure the Board of Investment (BOI) within the next month. Speaking at the Sri Lanka Economic Summit 2017 organised by the Ceylon Chamber of Commerce, International Trade State Minister Sujeewa Senasinghe said they were in the process of revamping the BOI with an investment of $ 6 million in collaboration with a team from Harvard University in the UK. Agreeing with Justice Minister Dr. Wijeyadasa Rajapakshe, he insisted that the BOI has now become more of a regulator than a facilitator. “I think the attitude has changed from the top to the bottom. With Harvard University we are restructuring the BOI. Thus, it can be a friendly facilitator for investments in the future,” Senasinghe stressed.

Related news: Sri Lanka & Bangladesh Agree on Free Trade, Sri Lanka – The Next Asian Economic Miracle

Lloyds bank has set aside another £1 billion for the repayment of mis-sold PPI and mortgage insurance in what has become one of the most costly actions in banking history. Apparently, despite years of terrible adverts advising people claim money for mis-sold financial products, some are still unaware that they are entitled to claim. Lloyds recently announced a half-year pre-tax profits of £2.5bn, 4% higher than last year. Lloyds alone has now set aside £18bn. In total, UK lenders have been forced to set aside more than £30bn to cover PPI compensation costs.

A new immigration system will be in place by March 2019 when the UK will officially leave the EU and therefore will begin devoting vast resources on stopping people from making the UK a vibrant economy. Immigration Minister Brandon Lewis was speaking as the government commissioned a "detailed assessment" of the costs and benefits of EU migrants. The CBI said businesses "urgently" needed to know what EU migration would look like, both in any "transitional" period after March 2019 and beyond. It's another fantastic leap into the dark which has become all too common since the UK decided to leave the Union which constitutes its biggest trading partner. Speaking on BBC Radio 4's Today programme, Mr Lewis would not confirm details of how the government plans to manage migration after Brexit, saying these would be revealed in a white paper later this year.

Full story here.

Car production in the UK has fallen for the third month in a row as the market continues to cool. Once again, underlying trends in the UK economy are looking sluggish as the effects of Brexit slowly cut the productive ability of the UK economy. The fall in production mirrored a decline in UK car sales. Foreign demand for UK cars has remained steady, falling by only 0.9% in the past six months.

Business process outsourcing provider Arvato has strengthened its Customer Services and Public Sector business with the appointment of Fraser Tusler as Business Development Director. Reporting directly into Arvato’s board member and Sales and Solutions Director David Morton, Fraser will be driving new business opportunities across retail, automotive, high-tech and the public sector. Fraser brings more than 15 years’ experience in sales and business development to the role. Prior to joining Arvato, Fraser was Sales Director for Computer Sciences Corporation’s (CSC) big data and analytics offering. Previous roles include IT and data analytics focussed sales and leadership positions at IBM, Salesforce and Teradata. The move follows Debbie Nolan’s appointment as commercial director of the company’s financial solutions business in the UK & Ireland.

Debra Maxwell, CEO of CRM Solutions UK & Ireland, Arvato said: “Our clients and prospects across retail, automotive and the public sector are facing disruptive changes in their sectors, so they’re looking to outsourcing partners to help them with implementing new technology and ways of working to transform their services.”

New research by eProcurement provider Wax Digital reveals that procurement is just as vital for SMEs at it is for large organisations, with formal procurement processes serving an equally critical role in helping them reduce costs, keep control of spend and eradicate labour intensive processes. The research conducted with both procurement professionals and other management in 260 UK businesses asked what the tipping point was for introducing procurement into their organisations. The results were as follows:-

• 75% said procurement was needed once a company reaches a £50M turnover

• 77% claim to need procurement by the time it has 100 supplier contracts

• 72% said once 500 invoices per month are being processed, procurement was necessary.

Rising costs was the most common reason for first introducing procurement, cited by 68%, followed by inefficient and labour intensive processes for 45%, and increasing business risk for 30%. 48% of businesses said they ended up implementing procurement reactively in response to a negative situation compared to 31% who said that it was a positive and proactive step forward.

The Wazoku ideas platform, installed last year at Shared Services Connected Limited (SSCL), has already engaged 67% of the company’s workforce. It has created 400 ideas with over 50 of these progressed, such as a texting reminder scheme for its customers that has had a significant impact on payroll efficiency. It has also led to a new employee engagement programme for all employees, due to roll out in the autumn. The ideas platform has been so successful that SSCL, which provides business support services to the public sector, saw a rapid return on investment as well as an increase in employee engagement relating to service improvements and innovation. SSCL was established in 2013, bringing together people from different government departments and the Wazoku platform offered a common innovation portal covering all SSCL locations.

A rise in the number of traditional sourcing contracts fuelled overall market growth in the Europe, Middle East and Africa (EMEA) region in the second quarter, according to the findings of the 2Q17 EMEA ISG Index™ released by Information Services Group (ISG) (NASDAQ: III), a leading global technology research and advisory firm. The EMEA ISG Index™, which measures commercial outsourcing contracts with an annual contract value (ACV) of €4 million or more, shows ACV for the combined EMEA market (including both as-a-service and traditional sourcing) reached €2.8 billion in the second quarter, up 13 percent. Traditional sourcing grew 5 percent, to €2 billion, on the strength of 188 contract awards, the second most ever for a quarter. ACV in the as-a-service (Infrastructure-as-a-Service and Software-as-a-Service) segment grew 40 percent, although the region continues to remain more dependent on traditional sourcing than other parts of the world.

Poland is a very important country for many reasons. Its growing $500bn economy is one of the world’s biggest growth countries, and its $1.114 trillion GDP is significantly larger than that of the Netherlands, Switzerland, Sweden, while roughly half of the UK’s. As a member of the EU, it has also been proven to have one of the most resilient economies, escaping the latest economic downturn with little pain.

Poland has taken advantage of the negative market conditions affecting greater Europe and built a stronghold in technology. This has resulted in the country now being touted by many, including Gartner, AT Kearney and KPMG, as one of the hottest outsourcing destination in the world.

The results of a government strategy implemented after the fall of communism more than 25 years ago, Poland build up a sound infrastructure for growth, with a strong focus on education. So much so that Poland now boasts the highest number of graduates per capital in the world, producing more than 400,000 university graduates annually. The Polish proposition is also about quality and practicality; graduates are high-performing, coming far ahead of its global competitors in everything from reading to ITC skills. Graduates are emerging with strong and highly employable fields such as computer science and engineering, and as such people with science, mathematics and computing degrees are plentiful. A string of governments have invested in a network of 20 information and telecommunication academic centres, modelled on the highly successful Indian model, which have been very successful in developing the skillsets of more than 150,000 IT, computer science and telecommunication potential employees. They make up around 10% ICT specialists of all university graduates in the European Union.

However its not just IT and technical skills that set Poland’s rich talent pool apart. Linguistics skills are of the highest standards, with many Polish citizens showing proficiency not just in their second language, English, but most Western and Eastern European languages as well. This has very much helped Poland become a bridge from East to West, and as there are many cultural similarities, it makes Poland one of the easiest places in the EU to do business.

During this time, the Polish economy went from strength to strength during a period where others were faltering. This was driven by and increased domestic demand and supported by increases in exports as well. The economy also benefited when millions of Polish workers migrated throughout Europe, driving unemployment down and increasing the flow of capital back into the country. With workers returning to the country, armed with capital and experience, it has contributed to Poland being a force in the CEE outsourcing market, and a serious challenger to the powerhouses such as India too.

There are also macroeconomic factors that have contributed to Poland’s attractiveness as an IT and outsourcing hub. Without doubt, membership to the EU offers businesses both stability and security, especially when it comes to data protection. Adhering to strict EU data protection laws, of which are becoming even stricter next year with the introduction of GDPR, Poland is required to offer the highest possible customer security requirements in the world, and when compared to the offshore model utilising offshoring destinations, few businesses can afford to sacrifice cost for compliance.

Economic stability also comes in the form of the fastest GDP growth in the OECD region, however worth noting that average wages have remained the same for years. This means that Poland will remain a destination to achieve strong ROI. Also worth mentioning that Poland has achieved a unique trade balance between UK and Germany; no other CEE country has achieved such a feat.

Outsourcing puts countries on the map, and Poland has wedged its place among the usual “nearshoring” destinations of the CEE region, typically defined by the Czech Republic, Slovakia and Bulgaria. AT Kearney’s latest report on outsourcing listed Poland as the number one most attractive outsourcing destination in Europe (and 10th globally). This was based on three key criteria: financial attractiveness, people skills and business environment. Two years ago it was ranked at 24.

The business market has recognised this, and acted accordingly. The likes of Credit Suisse, UBS and BNY Mellon have already moved IT work out of London into Poland, and IBM has outsourced more than 7,500 jobs there, joining Cap Gemini (6,000) and HP (4,600). Since the Brexit vote, Poland has been tipped to be the big winner to attract UK banking jobs, with more than 30,000 jobs predicted to move from Britain in just this year alone. Even German and Italian companies are moving to Poland now to take advantage of Poland’s rich environment of skills, business culture and location, with so many skilled employees, and highly competitive costs, too.

Poland is doing a lot of things right, and it is making inroads into becoming Europe’s IT hub.

Visit Soitron's website here and learn more.