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BPO Innovations Conference - The Czech Success Story

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Success Factors, Case Studies, Incentives, Statistics

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BPO Innovations Conference - The Czech Success Story

  1. 1. BPO Innovations Conference A Czech Success Story Jan Fried | Director of East Coast Operations, USA New York, November 13th 2013
  2. 2. Agenda 1. Success Factors 2. Case Studies 3. Incentives and Statistics
  3. 3. Success Factors Source: CzechInvest / Gartner's Leading Locations for Offshore Services in EMEA, 2012
  4. 4. Czech Republic Population 10.5 million Labor force 5.3 million Unemployment 7.6 % GDP growth (2012) -1.0 % GDP growth (*2013) -1.0 % Annual inflation 1.8 % Outsourcing and Innovation Hub in the Heart of Europe Source: CzechInvest, 2013; Czech Statistical Office, May 2013, Czech Ministry of Finance, July 2013
  5. 5. BSS Case Studies Source: CzechInvest, 2013
  6. 6. Complex expense management and outsourcing services Ariba Prague offers its services for the companies in EMEA region using 15 European languages 2004 – Establishment of Ariba in the Czech Republic 2007 – Establishment of Prague BPO office with only 25 employees 2012 – Ariba Inc. became a part of SAP family – Ariba and SAP Company 2013 – Ariba employs 160 employees Source: CzechInvest, 2013
  7. 7. BPO Center of Excellence in Prague since 2001 Services: Finance & Accounting, HR, Insurance, Supply Chain, Procurement, Business Services, Infrastructure Outsourcing, Application Outsourcing Banking, Communications, Financial Services, Products, FMCG The capital and the largest city of the Czech Republic,  Prague, is easily accessible to major cities in Europe A key business hub and cost-effective market of top technology talent;  25% of the university population are science and technology graduates Multilingual workforce (23 languages) Source: CzechInvest, 2013
  8. 8. BPO – invoice management, customer support, data management Established in 2004 in Brno Number of employees: 550 In 2013 one of the founding members of ABSL in the CR The Association of Business Service Leaders in the Czech Republic (ABSL) has formed to give the business services industry a common voice to help shape its environment and destiny.  ACCA, Accenture, DHL, Edwards Services, Gardner Denver, Infosys, JNJ, MANN + HUMMEL, Monster, Motorola Solutions, PPG INDUSTRIES CZECH REPUBLIC, Pilsner Urquel, PricewaterhouseCoopers, Process Solutions, Siemens Source: CzechInvest, 2013
  9. 9. Why? Geographic Location in the Centre of Europe Attractive Business Climate R&D and Innovation Capabilities Source: CzechInvest, 2013 Well Educated and Skilled Labor Force Favorable Labor Costs
  10. 10. State Incentives (BSS/BPO) ╌ Corporate Tax (19%) Relief for up to 10 Years ╌ Transfer of a Land at Discount ╌ Job-creation Grants (up to USD 2,500 per employee) ╌ Training and Re-Training Grants ╌ Condition: 100+ new jobs ╌ State Aid Maximum 40 % of Eligible Costs: ╌ Assets (>1/2 New Machinery) ╌ 2-years Gross Wages (New Positions) Source: CzechInvest, 2013 Source: CzechInvest, 2012
  11. 11. EU Funds ╌ Operational Program Enterprise and Innovation (OPEI) ╌ 15 Grant Programs for the period 2007-2013 ╌ ICT and Business Support Services ╌ Shared-Services and Data Centres ╌ Allocation: app. USD 50 mil. ╌ Individual Subsidy: up to USD 7.5 mil. (40 – 60 % of Eligible Costs) ╌ Application Registration: Nov 6 – Dec 17, 2013 ╌ Full Application: Nov 6, 2013 – Feb 7, 2014 Source: CzechInvest, 2013 Source: CzechInvest, 2012
  12. 12. ICT and Business Support Services ╌ Conditions: ╌ Minimum investment: USD 150k (50k for SMEs) ╌ Creation of minimum jobs: 10/20/40 (size) ╌ Eligible costs: ╌ 1) 2 yr Gross Wages + Social-security and Health Insurance ╌ 2) HW/SW ╌ Real Estate Rental + Services of Experts and Consultants Source: CzechInvest, 2013 Source: CzechInvest, 2012
  13. 13. Source: CzechInvest, 2013
  14. 14. Change in the Structure of Investments Year 1993 Year 2013 Technology Centers 39% Manufacturing 16% Manufacturing 100% Business Support Services 45% Source: CzechInvest, 2013
  15. 15. Ministry of Industry and Trade CzechInvest Agency Foreign Offices – USA Jan Fried USA – East Coast – New York Roman Horacek USA – West Coast – California Mobile phone: +1 (347) 216 9355 Mobile phone: + 1 (415) 794 0665 E-mail: newyork@czechinvest.org E-mail: california@czechinvest.org Source: CzechInvest, 2013
  16. 16. Thank you for your attention. www.czechinvest.org Jan Fried | Director of East Coast Operations, USA jan.fried@czechinvest.org @jan_fried
  17. 17. Incentives STRATEGIC $$ USD 2.5mil USD 25mil + 500 jobs USD 500k + 40 jobs USD 10mil + 120 jobs $$ 40 jobs IT 100 jobs BSS
  18. 18. Sector Statistics 1993 - 2013 other 14,02% strategic services center 5,52% paper, wood processing 1,78% electronics, electrotechnics 10,92% manufacture of motor vehicles 16,40% plastics, rubber 6,25% engineering 13,73% Food Processing 0,59% Source: CzechInvest, 2013 biotechnology, medical equipment 0,68% metal products 4,04% aircrafts 0,21% chemistry, pharmacy 6,33% IT and software development 19,51%
  19. 19. 1999 - Establishment of business entity: AT&T Global Network Services Czech Republic s.r.o. in Prague 2008 - Establishment of Brno Network Operations Centre 2009 - Launch of new AT&T Brno premises in Campus Science Park 2010 - Large Transition Project Bloom (consolidation of Global Customer Service Centres from various locations in Europe to Brno, CZ) 2013 – AT & T in Brno employs more than 1000 people Source: CzechInvest, 2013
  20. 20. 2001 – Establishment of Brno branch with dozens of employees 2004 – Brno branch became a part of strategic locations IBM Delivery Centers – DC 2005 and 2006 – Significant growth – IBM DC employed more than 2000 people 2009, 2010, 2011 – New projects were launched 2013 – IBM DC employs more than 3300 employees Source: CzechInvest, 2013
  21. 21. Investors of the Year 2012 ╌ BSS / Call Centrum (Italy) ╌ Ostrava, Chrudim (app. 400 jobs) ╌ IT / SW Development (USA) ╌ Brno (app. 200 jobs) ╌ BSS / IT (USA) ╌ Brno (app. 200 jobs) Source: CzechInvest, 2013 Source: CzechInvest, 2012

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