Poland Rules 2016’s IT reports!
For several years now, our country has been one of the most attractive markets for foreign direct investment and a leader in terms of the number of new jobs created. According to Ernst & Young analysts, this year Poland is 5th in Europe in this respect, after economic powerhouses such as Germany, the UK, France, and the Netherlands. What are the reasons behind the level of investor interest in Poland? The high competence of Polish specialists is probably the driving force.
Polish developers are slowly becoming the Polish economy’s most valuable brand. HackerRank compared the programming competences of specialists from 50 countries around the world and ranked the Poles as high as 3rd place, after only the Chinese and the Russians, but leaving the Germans, Britons and even Americans far behind. Moreover, when competences in terms of particular specializations were compared, Polish Java programmers took 1st place!
Small wonder, then, that international business service centers are popping up like mushrooms in Poland – in the A.T. Kearney Global Services Location Index ranking, Poland is the most popular location for such centers in Europe. Due to its low cost, high professional competences and the favorable business environment, Poland is also an IT services outsourcing power, and has been recognized as the most attractive location for nearshore outsourcing in Europe according to the Raconteur report.
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Outsourcing – the Answer to Labor Market Issues in The UK’s IT Industry
An employee worth his weight in gold
As many as 75% percent of the nearly 60,000 IT companies in the UK are located outside London. Not surprisingly, both salaries and costs are highest in the capital – smaller companies must therefore look for cheaper alternatives. Yet London is one of the most attractive places for employees, in terms of both earnings and prestige, as well as the presence of international companies whose headquarters are based there. It is the outflow of the most talented IT professionals to the largest players in the IT market which is the main concern of local businesses, which cannot compete in the race to attract employees.
Recent years have seen an explosion not only in the wages of IT specialists, but also in the range and value of perks offered by desperate employers. Cars, gym memberships, healthcare, pension schemes, nurseries, attractive training courses – these are just some of the extra benefits offered to tempt specialists to join. Major corporations compete directly with one another in inventing ever more extravagant incentives, from health insurance for cats and dogs, to massages, and everything in between.
Costs just keep growing
Even if a company provides its employees with all of these benefits, as well as a fully-furnished office with a climbing wall and space for afternoon naps, the costs don’t stop there. The recruitment process is getting longer and requires ever more creative activities. Regardless of whether you hire an outside recruitment firm or whether recruiting stays in-house, the cost of actually getting the employee will be many times his or her monthly salary. At the same time, there is no way to be sure that the employee will not leave after a mere few months, tempted by a seemingly better proposition.
Of course, the largest single expense in the context of employment remains the salary itself. The exact amount naturally depends on the location, as I mentioned earlier, but salaries in the IT industry are much higher than the average, irrespective of whereabouts. In the largest cities in the UK, the average annual salaries as cited in job offers range from £36,000 in Belfast to nearly £59,000 in London. It is also worth remembering that the final figure, as negotiated by the employee, may be even higher. But that’s not all – because according to cost calculator estimates, after adding the cost of taxes, equipment, training, licensing, and leave of absence, it turns out that the full cost of an employee in London may even exceed £97,000 per year. Or about £47 per hour!
Even higher sums are associated with the hiring of contract workers, whose wages don’t contain so many hidden costs, but nonetheless are much higher than workers employed on a standard employment contract – and may be as high as £120,000 a year.
Not all programmers are created equal
With such high demand for IT specialists nowadays, companies are often forced to compromise, resulting in the hiring of workers who subsequently fail to meet expectations. This situation unfortunately also spoils the labor market, as large numbers of employees have low skill levels and minimal motivation to do anything about it because work will come to them. One such programmer working in the UK, who has extensive experience working on international IT projects, honestly lays out for us the cons of hiring this kind of worker:
- lack of basic programming skills,
- superficial knowledge of programming languages,
- lack of independence and problem-solving skills,
- low productivity, and the creation of low-quality software,
- lack of documented experience in that worker’s CV,
- excessively high expectations in relation to skill level.
Unfortunately, employers often assume that they simply have no alternative, due to the difficult situation on the labor market. So they agree to the lesser of two evils, which unfortunately affects the quality of the services they offer, or the applied IT infrastructure. Instead of investing in new technologies and moving with the times, they waste ever more money on old solutions, which consequently leads to technological debt.
Outsourcing – the scalability of resources
And now we get to the point. In the current heyday of cloud services that allow you to customize resources to suit the needs and capabilities of the company, outsourcing IT services and hiring employees from external service providers is truly a sign of the times. Outsourcing allows you to choose the best specialists in the field, without burdening the company with all the costs of hiring the employee full-time. It provides great opportunities in terms of scalability: highly qualified staff with experience in various projects in many countries are available within a short period of time, for a reasonable price. For example, in terms of Polish IT specialists, acclaimed by HackerRank as some of the best in the world, if we take into account the actual costs of employment and the hourly rate, the wage of a programmer may be only half as much as in London. Moreover, all obligations in terms of hiring workers which may be borne by the employer, are now the responsibility of the outsourcing services provider, and workers are hired for a predetermined period equivalent to the duration of the project. After completion, their employment may be extended for additional maintenance services, or they are simply transferred to another project, or to another customer.
Most importantly, it is the outsourcing company which is responsible for the quality of services provided, and which must satisfy its obligations according to the contract which regulates all aspects of co-operation, from the project deadline, to the budget, and finally to objective indicators of the quality of the services provided.
Such a model of cooperation may, however, benefit all parties – the customer may utilize the service itself, the service provider earns remuneration, and employees get secure and attractive employment, as well as the opportunity to work on interesting and diverse projects.
Poland – the most attractive European country for outsourcing
Year after year Poland is named the best location for outsourcing! In 2015 KPMG provided a report that showed Poland on the first place in Europe. In 2016 position is sustained what shows A.T. Kearney report.
A.T. Kearney a leading global management consulting firm and trusted advisors to the world’s foremost organizations, published a 2016 Global Services Location Index where Poland is indicated as the best European country for outsourcing.
The 55 countries in the 2016 Global Services Location Index were selected on the basis of corporate input, current remote services activity, and government initiatives to promote the sector. They were evaluated against 38 measurements across three major categories: financial attractiveness, people skills and availability, and business environment.
Poland is on the first place in Europe and ten in the World. Many of the largest offshoring operations are based in Polish cities – Warsaw, Kraków, Wroclaw, Katowice, and Lodz. The presence of multiple canters for the industry gives Poland a considerable edge over smaller competitors in Central and Eastern Europe. Without a doubts through advantages of Poland we can mention: cultural similarities, high education level, tax incentives, stable economic situation, and very good language skills.
A.T.Kearney report – 2016 Global Services Location Index
IT Managed Services – Effective Operation of the Maintenance Process of IT Systems
What are Managed Services?
The Managed Services model is already used in many industries, including HR, manufacturing and IT, and is becoming one of the most important and fastest-growing segments of services. Another important issue here is security – often an external, specialized company can provide not only the appropriate conditions for achieving better results, but can also better ensure the security of access to data.
Due to growing interest from managers in this model of cooperation, the topic is becoming increasingly popular on European market. Based on the experience which I have gained at JCommerce, I would therefore like to introduce readers to the concept of Managed Services.
Managed Services as support for IT governance within a company
The Managed Services model has a wide range of potential applications. The simplest indicator of the moment at which it is worth considering the introduction of Managed Services is the implementation phase of the new system. After building the IT infrastructure and the commencement of system operations, it is necessary to conduct maintenance on the new system. It is precisely at this point that Managed Services start to be used, the aim of which is to take care of the area indicated by the customer, e.g. to ensure the continuity of the company’s ERP system or to ensure the smooth functioning of business intelligence systems.
Managed Services, in terms of support for business, cover a wide range of services and can encompass every part of the company’s IT system. The main tasks are to manage and maintain servers, infrastructure, applications (ERP, CRM), and data processing systems and to cover the crucial area of daily management of technical support services. In addition, the range of services can be extended to the Help Desk and Service Desk. Additionally, the variants of service provision by the service provider, offered by the market, are also beneficial to the customer. Support services can be carried out on the customer’s own technological background or in the form of a model in which the supplier is fully responsible for the supply and maintenance of solutions, as well as for providing the environment and infrastructure.
Why are Managed Services worthwhile?
As I previously mentioned, the range of services is very wide, but it is worth mentioning the benefits to the customer. It is worth looking at them through the prism of the challenges facing today’s IT departments in Europe. As indicated by the C-Level report “Managed Services – A new trend on the outsourcing services market”, increased operational efficiency, optimizing IT processes, reducing operating costs of IT infrastructure, access to new technologies and skills, and higher service levels are all still among the most important IT department tasks. This goes to confirm the apparent trend for many companies to move away from the physical ownership and management of their resources, towards the transition to using an external partner to maintain the environment or IT system, either in part or in its entirety. Such decisions in particular are facilitated by the growing popularity and understanding of cloud services – where the issue of physical possession does not arise, and the technology is fully prepared to manage applications in a secure and efficient manner from any location.
Regardless of the area of IT, or the degree to which the company decides to embrace Managed Services and what type they choose, we can identify some common benefits for companies which opt for this solution.
Again, I will refer to the experience of JCommerce, which offers support to its clients through the management of various IT platforms. Using the Qlik application (which is a Business Intelligence tool supporting reports and analysis) as an example, we can illustrate the complexity of the operation and maintenance in the smooth operation of the given IT solution. How? Well, Qlik gives users the ability to scale and to create a wide variety of reports for all the company’s departments and facilitates the customization of the tool to the individual needs of users. Any large-scale expansion of the functionality of the Qlik platform therefore requires constant monitoring and development. By opting for Managed Services supporting this type of application, we can gain the following benefits:
- Increased efficiency of the system, applications, and the IT department itself, which has the possibility of concentration, e.g. on the development of innovation in the company, or better support for the launch of a new product,
- High level of flexibility and scalability of resources, which the organization does not possess, with the possibility of expanding solutions in step with changing business needs,
- The possibility of accurate cost planning and accounting for a tangible effect based on the SLA (Service Level Agreement) conditions agreed with the supplier.
Based on the experience of our customers, the decision to cooperate with the Managed Services provider is influenced by several criteria, the most important of which is the particular area of specialization of the supplier, for example Managed Services for data centers, services pertaining to the management of ERP applications, Business Intelligence, website maintenance and technical support services in a diversified IT environment within the company.
The growing popularity of Managed Services in Europe
The Managed Services model is relatively young and just starting to gain the confidence of entrepreneurs. There is nothing surprising in this, because it results from the evolution of the use of outsourcing services. After the phase of outsourcing technical resources to support the implementation of IT, business is becoming increasingly ready for the next, more advanced forms of cooperation with external partners. The European entrepreneurs takes an ever bolder approach to the possibility of transferring control over a given area of their business to an external provider, despite the objections and doubts related to this process. In this case, a few key questions may help in the decision-making process:
- Do you control the increase in IT costs in your company?
- Do you engage an excessive amount of internal IT resources in tasks which can be classed as maintenance, rather than development?
- Do you observe a seasonal increase in your use of IT professionals, or can you not predict the need for their involvement?
- Does your IT system require development, frequent repair or performance monitoring?
- Are unusual competencies, not readily available on the market, required in the maintenance of your IT system?
If reading this article has already raised similar questions, it may be worth taking a closer interest in Managed Services. It is worth remembering that the model of cooperation which we have described transfers the risks and costs of managing IT systems to an external supplier. In order to improve efficiency it also assumes the responsibility of IT system management, freeing up the customer’s internal IT resources. Another advantage is the fact that it is the customer that specifies the expected effects of cooperation together with the supplier, and indicates the critical parameters.
In summary, Managed Services are not a new tool as such, but in some countries it is visible that significantly growing number of companies have started opting for this form of IT maintenance solution. As with anything new, it involves some uncertainty and risk; however enterprises looking for new solutions and optimizing management costs are increasingly turning to the outsourcing model. Of its many advantages it is especially worth mentioning that this is a bespoke solution, and the enterprise has the ability to assign the most problematic issues in the area of IT infrastructure maintenance to external specialists.