CCP: Sprechen Sie Deutsch?

By Aleksander Nowacki

Call Center Poland (CCP) is stepping up its efforts to become a major player on the offshore outsourcing market for German businesses. Having lost its dominant position on the local market, CCP is looking abroad for alternative sources of revenue. The project, initiated at the beginning of the year, has only gained a few clients across the western border so far, and CCP does not expect to break even on it for perhaps two more years. Experts agree, however, that the company is tapping into a potentially lucrative market.

Last week, McKinsey released a report on this country's potential as "the European center for backoffice services." While the report refers mainly to "business process offshoring," Jan Motz, Call Center Poland CEO, is convinced that the same could be said of the customer care market. While the topic of Germany "nosebleeding of jobs" in labour-intensive industries to cheaper countries has long dominated the debate on foreign direct investment in manufacturing, Motz feels the country has an even greater potential in the services market.

"Lower labour cost is one thing, but the quality of the workforce here is also higher," he says. While call center employees in the current EU member states tend to be less educated, the majority of CCP's workforce is made up of students or university graduates. "Neither in India nor in the Czech Republic can I find 200 economics graduates ... who speak fluent German and are ready to start work in two weeks," said an international offshoring center executive, quoted in McKinsey's report. McKinsey's self-styled conservative estimates state that capturing a seven percent share in the European offshoring market would allow for the creation of 200,000 new jobs in Poland by 2008. An additional advantage is that high unemployment makes for lower levels of worker rotation, which in turn leads to lower costs of training.

CCP is looking to capture the market now dominated by firms based in eastern Germany, where labor costs are some 25 percent lower than in the western lands. Motz says the main obstacle the company faces is the German clients' conservatism and their anxiety about this country as a reliable business destination. He is also outspoken about the lack of government support for those companies that create jobs.

"Telecoms infrastructure is cheaper in Warsaw than the rest of the country, so we should really set up shop here," Motz says. "That is just absurd." He is also happy to discuss what he sees as inactivity of the Polish Agency for Information and Foreign Investment (PAIIZ). But Motz is much less candid when it comes to discussing the details of his company's plans of expansion on the German market.

"We have competition and I'm not going to make it any easier for them," he says. "Let them find out about our plans by themselves." He says that a major reason for CCP's plans of expansion abroad is that TPI, controlled by the dominant telecoms operator, has bitten into CCP's domestic market share "through means and methods that have nothing to do with the free market."

As a consequence, he declines to disclose the size of investment necessary to enter the German market, saying merely that it is "considerable," despite the company already having the required infrastructure. The expenditure, he says, goes on training employees and marketing, such as costs of participation in international trade fairs. Neither would he say how many new jobs the company is creating.

"Our goal is for the German clients to account for 10-15 percent of our revenues in about two years' time," he says. "But so far we only have a few clients in the FMCG sector." Call Center Poland's annual revenues stand at about zł.30 million.