AMS sets up software development center in Kraków
The center, which currently employs 40 people, more than 80 percent of whom are software engineers, is looking to increase its payroll to 200 by the end of the year. It will update the company's existing products in risk-management and collections software for financial institutions, as well as its telecommunication products, such as billing systems. The center will handle product development and maintenance, as well as support the company's other projects. It is currently working on three active projects and its workload is expected to increase along with its expanding staff. The company says that the center is to be one of its largest research and development locations worldwide, behind the company's Washington DC headquarters and its operations in Duesseldorf, Germany. The firm has been present in this country since 1997 and its Warsaw office has been the fastest growing office in Europe.
"Ultimately, this country will account for a significant proportion of our global R&D budget," says Walter Howell, AMS vice-president for the commercial sector. "We will be moving most of our development in the commercial sector to Kraków." The company cited Kraków's relative proximity to Europe's chief business destinations as a reason for the center's location. The company is currently present in 11 European countries, with Poland the only one in the Central and Eastern European region.
The climate for offshore outsourcing in this country has not been favorable lately, as the government is contemplating the introduction of VAT on such services in a move that would deviate sharply from standard European practice. Such plans, and the recent media rumors of the 'tiger squads' of tax police aimed at cracking down on transfer pricing within corporations, have led some firms to abandon plans to set up similar centers here.
Howell says, however, that while institutional risks are a consideration, the firm is not focused on the ruthless cost-cutting that drives many outsourcing contracts to India. He stresses the importance of the country as a 'nearshore' destination for Europe's largest countries, citing both geographical and cultural proximity to Germany as incentives to locate outsourcing activities here.
William Gavenas, the AMS senior executive in charge of the center, says that the company has already established links with the city's universities with a view to setting up internship programs and R&D sharing. The cooperation between universities and the commercial sector is one of the areas in which the country is lagging behind the rest of Europe, and even the region. As a recent McKinsey report on outsourcing points out, just 17 percent of the country's scientists are employed in the private sector. However, Kraków is the one bright spot on an otherwise bleak picture.
The city is home to several R&D centers including Motorola's software development facility. ABB, Delphi, IBM and Cap Gemini Ernst&Young have also set up outsourcing facilities in the city. Demonstrating the strength of the local academic community's entrepreneurial spirit, Kraków is home to what is probably the only spectacular success story of a university spin-off.
ComArch, the country's fourth-largest systems integrator, was founded in 1993 by Janusz Filipiak, an academic at the Kraków University of Mining and Metallurgy (AGH). The company's first office was in a room rented from the university and it has maintained its strong links with the academic community to this day, with ComArch employing more than 1,000 people. The firm builds its image with prospective employees through supporting research projects, among other activities. It is also working on the first advanced technologies center in cooperation with AGH and the University of Warsaw.
Grzegorz Błażewicz, ComArch spokesman, is keen to point out that the city's three large universities do not exhaust the supply of skilled labor in Kraków. The nearby region of Silesia with its strong industrial tradition, and a number of technical universities, also provides a steady supply of engineers.
Kraków, historically a strong cultural and artistic center, has not been known as a particularly business friendly destination in recent years. But the city's bright young things are, perhaps, changing all that.
"Ultimately, this country will account for a significant proportion of our global R&D budget," says Walter Howell, AMS vice-president for the commercial sector. "We will be moving most of our development in the commercial sector to Kraków." The company cited Kraków's relative proximity to Europe's chief business destinations as a reason for the center's location. The company is currently present in 11 European countries, with Poland the only one in the Central and Eastern European region.
The climate for offshore outsourcing in this country has not been favorable lately, as the government is contemplating the introduction of VAT on such services in a move that would deviate sharply from standard European practice. Such plans, and the recent media rumors of the 'tiger squads' of tax police aimed at cracking down on transfer pricing within corporations, have led some firms to abandon plans to set up similar centers here.
Howell says, however, that while institutional risks are a consideration, the firm is not focused on the ruthless cost-cutting that drives many outsourcing contracts to India. He stresses the importance of the country as a 'nearshore' destination for Europe's largest countries, citing both geographical and cultural proximity to Germany as incentives to locate outsourcing activities here.
William Gavenas, the AMS senior executive in charge of the center, says that the company has already established links with the city's universities with a view to setting up internship programs and R&D sharing. The cooperation between universities and the commercial sector is one of the areas in which the country is lagging behind the rest of Europe, and even the region. As a recent McKinsey report on outsourcing points out, just 17 percent of the country's scientists are employed in the private sector. However, Kraków is the one bright spot on an otherwise bleak picture.
The city is home to several R&D centers including Motorola's software development facility. ABB, Delphi, IBM and Cap Gemini Ernst&Young have also set up outsourcing facilities in the city. Demonstrating the strength of the local academic community's entrepreneurial spirit, Kraków is home to what is probably the only spectacular success story of a university spin-off.
ComArch, the country's fourth-largest systems integrator, was founded in 1993 by Janusz Filipiak, an academic at the Kraków University of Mining and Metallurgy (AGH). The company's first office was in a room rented from the university and it has maintained its strong links with the academic community to this day, with ComArch employing more than 1,000 people. The firm builds its image with prospective employees through supporting research projects, among other activities. It is also working on the first advanced technologies center in cooperation with AGH and the University of Warsaw.
Grzegorz Błażewicz, ComArch spokesman, is keen to point out that the city's three large universities do not exhaust the supply of skilled labor in Kraków. The nearby region of Silesia with its strong industrial tradition, and a number of technical universities, also provides a steady supply of engineers.
Kraków, historically a strong cultural and artistic center, has not been known as a particularly business friendly destination in recent years. But the city's bright young things are, perhaps, changing all that.
