Ciprian Dan, ABSL President: The next step taken by the companies will be to develop specific business services with higher business added value and better customer experience

In order to take the pulse of business shared services industry, Outsourcing Today spoke recently with Ciprian Dan, President of the association representing companies in this field – ABSL.

Ciprian Dan has been elected President of ABSL in July 2020. His mandate’s main operational directions are related to promoting Romania and the business opportunities offered by the industry, collaboration with local and central authorities for the development of the sector, development of educational programs for young people who are choosing a career in the business services industry

 Read the interview below:

 What are the priorities of ABSL and yours, as ABSL’s president, for supporting the businesses and enabling the synergies of companies operating in the business shares services industry for 2021?

 The main operational directions of my tenure are related to promoting Romania together with the business opportunities generated by our industry, while collaborating with the local and central authorities for the development of this sector, as well as the educational programs for young people choosing a career in the business services industry.

My first priority in this mandate is to promote Romania for the investors interested in this sector. The talented and skilled workforce and the added-value services make Romania an attractive destination, along with a competitive level of costs.

In addition, the current context may be favorable for us. Companies are rethinking globally their cost structure and rebuilding their outsourcing strategies. Our speed of response, together with the ability to adapt to the new conditions (given by Covid 19) and the fact that we have continued to deliver high quality services, unlike other geographic areas, put us in the top of the relocation options. Following Poland example, the close cooperation with central and local authorities is also important in order to ensure the necessary facilities and to attract more investors.

My second objective is related to the development of this sector in smaller cities with good potential in terms of labor, local high education structures and business infrastructure. In Timisoara, for example, our industry has 11,000 employees, which means 4% of the total employees in the county.

My third priority is education. The key factor in the development of our industry is the properly trained workforce, in a sufficiently large number and at a competitive cost compared to the other countries in Central and Eastern Europe.

How would you define the dialogue with Romanian authorities and what is the business shared services industry’s expectations in this respect?

Before the pandemic, the biggest challenge of our industry was the skilled workforce. All our discussions were focused at that time on recruiting and retaining talents. Companies in the industry made partnerships with state universities, thus students being able to join extracurricular courses in order to improve personal skills (soft skills) or attend internship programs. In addition, all employees of this sector benefit from career and training programs.

Companies, no matter how well-intentioned and eager to benefit from a highly trained workforce are, cannot radically influence the education system. They may offer occasional support, for example in a certain industry or a certain city, especially when we speak about the higher education. But it is impossible for the private sector to be involved in the national primary and secondary education system. This is the attribute of the state, which can use the experience and the help offered by the business environment.

In the case of our industry, the Government could help us by supporting the training initiatives of the workforce, in accordance with the requirements of this sector. Improving an education system takes time and this should be a priority for any government. Private initiatives to support education cannot achieve great results without a partnership with the authorities.

Which are the main challenges of this year, in the context of the pandemic and how can it be overcome?

The role of the Central and Eastern Europe in the business services sector is growing in a post-pandemic world. The business services sector continues to grow with the help of companies in the market and of the new projects. The most recent study of the industry in EMEA, before this second Covid-19 wave, shows that this year the industry will register a slight increase of 1 – 5%; on medium term it will register an increase of up to 10 or even 15%, a situation that can be also considered for the Romanian business industry services. In this new reality of Covid cases growing again alarmingly across Europe and US we should nevertheless de-tone this optimism. We might experience a stagnation if not a slight decrease.

After a short period of stagnation, during the first months of the pandemic, when all companies tried to better control their costs and manage the affected areas, the employment was resumed by summer, but did not reach the last year’s level.

The Romanian business services industry generated last year revenues of over 4.5 billion euros, thus reaching approximately 2% of Romania’s GDP.

 Which are the conclusions of this year, regarding the business evolution of this sector, from the perspective of ABSL?

For the short term most of the services might stagnate around the current level (financial and accounting services, HR or certain back-office services). Other services, such as customer service and logistics services dedicated to e-commerce can increase. IT services, automation and the development of the artificial intelligence solutions, as well as integration solutions are accelerated by the context of the current crisis. While costs / employee in Romania still remains attractive, compared to Western Europe and America, companies could choose to reduce budgets in their home territories and provide activities in alternative locations.

What should be boosted or enhanced in this industry so that the companies better cope with the current economic challenges of the sector and of the entire economy?

Benefits such as low costs or language-skilled workforce will be eroded in the coming years.

Therefore, it is essential for our industry to move from the transactional services (repetitive services, such as billing, order recording) to the high value-added services (analysis, planning, improving the end-customer experience, and the full development of an automation project). etc.).

Companies are turning to high value-added services, especially in the context of industry automation.

The next step taken by the companies present on the Romanian market will be to develop specific business services with higher business added value and better customer experience.

What are the main figures defining the business shared services industry in Romana in terms of hiring this year? Which are the most active and promising sectors of business shared services?

The companies in our sector are still looking for IT specialists, speakers of foreign languages ​​(German is one of the most requested languages ​​in our industry), specialists in the field of financial accounting, procurement, etc. and combinations thereof. A special category of skills that is gaining more and more interest in Romania, is the one related to the automation (robots, artificial intelligence) of business services – a combination between the knowledge of the business processes and IT.

For the near future, I believe that those who are able to combine language skills and IT knowledge or advanced knowledge in the fields of business services will be in great request.

 How do you see the future of business shared services development in Tier 2 and Tier 3 cities in the future? Which are the main triggers that smaller cities should bring on the table to boost investments in these cities?

Approximately 85,000 employees work in Bucharest (about 8% of the total employees in the capital), 15,000 in Cluj (6% of the number of employees in the district), 11,000 in Iasi (6.5% of the available labor force in the district ), and in Timișoara 11,000 (about 4% of the number of employees in the district), the rest of the employees in the industry coming from other cities such as Brașov, Sibiu, Galați or Craiova.

The attractiveness of each city depends on the local labor force and their skills (foreign languages, specific knowledge) and on the collaboration with the local authorities.

 From ABSL’s perspective, what is the sentiment of investors looking to open a business in Romania? Which are the local benefits and challenges currently? Which are the main sectors which seem to be more appealing for investments?

 Compared to Poland and other EMEA countries, Romania has great labor force advantages. We have the competitive cost advantage, the fact that our employees speak Latin languages and German, the fact that our market is not yet as saturated as in Poland. These are the reasons why investors in the industry put Romanian on the short list. One of the main objectives of ABSL is to promote cities in the tiers 2 or 3.

Many companies are rethinking their cost structure by opting to consolidate services to attractive destinations in terms of cost and quality of the human resources and in this context Romania can attract new projects.