Success Factors, Case Studies, Incentives, Statistics

1. BPO Innovations Conference
A Czech Success Story
Jan Fried | Director of East Coast Operations, USA
New York, November 13th 2013

2. Agenda
1. Success Factors
2. Case Studies
3. Incentives and Statistics

3. Success Factors
Source: CzechInvest / Gartner's Leading Locations for Offshore Services in EMEA, 2012

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. BSS Case Studies
Source: CzechInvest, 2013

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. 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. 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. 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. 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. 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. 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. Source: CzechInvest, 2013

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. 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. Thank you for your attention.
www.czechinvest.org
Jan Fried | Director of East Coast Operations, USA
jan.fried@czechinvest.org
@jan_fried

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. 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. 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. 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. 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