“We are continuing to expand in Budapest, especially because certain skills are only available in the capital. Despite high personnel costs, in many areas there is no alternative in Hungary to Budapest. However, Budapest is not our main focus. We want to expand outside Budapest in particular. “
IT Services Hungary Kft.’s two major sites in Budapest and Debrecen were joined in June by the expansion in Pécs. The Budapest Times spoke to Jürgen Grunert, Chief Financial Officer of the Hungarian subsidiary of T-Systems International about the reasons for the step and the positive effects it will have.
What prompted you to increase the third site?
The main reason was our order situation, which continues to be good. The high quality services that we provide convinces our customers – that we are very proud of. They trust our IT services, that is proven continuously by the new big orders we receive.
Presumably you could have also dealt with the additional orders by expanding further your two sites in Budapest and Debrecen.
Yes, we are also doing that in parallel. However, there are limits to greater expansion in terms of recruiting staff and office space, especially in Debrecen. In our building complex in Debrecen we have the spatial capacity with the more than 1,200 workplaces almost exploited. Besides, the recruitment of suitable personnel in this region is increasingly difficult. The candidates often do not have the required level of language skills. However the proper workforce supply is bigger, the personnel costs are around 25 to 30 per cent higher than in Debrecen or Pécs.
Why did you opt for Pécs in particular?
When we looked for a site in a city beyond Budapest a few years ago and carried out a precise analysis of the various alternatives, Pécs finished in second place after Debrecen. It was important for us that with Pécs we have found a city that is located significantly far from Debrecen. In Pécs we can draw on a completely different workforce supply. A convincing argument in favour of Pécs is also the historically close ties to Germany of its residents. For us, given that we have a lot of German-speaking customers, that is a great advantage. With Mayor Zsolt Páva and Rector of the University of Pécs Dr. József Bódis we work closely together and we are planning a similar education model as with the University of Debrecen. We are confident regarding the professional qualifications of the Pécs workforce.
Will you move into a building used solely by your company like in Debrecen?
Currently we are moving into a building that was previously used fully by Magyar Telekom. We have rented one floor.
How many employees do you currently have in Pécs?
In April we started with 21 employees. A further 38 colleagues have signed the contracts and have just started working. By the end of the year we plan to have 100 employees in Pécs.
Is the workforce supply living up to your expectations?
Yes, absolutely. Both in terms of ICT affinity and German language skills. We are very satisfied. The hiring process is fully on schedule.
Will there be a division of tasks between the three sites?
There will certainly be a degree of division, but that has not yet been finalised. Currently orders are assigned to the site where free capacity is available. A next step will then be to adjust the activities and to optimise the division of tasks between the sites.
What changes will the existence of the new site mean for your group?
We can further improve our service reliability. We have what is called the business continuity plan, or BCP for short, which involves ensuring that our major customers receive fast service of the appropriate quality. If we have a technical problem at one site, such as a power cut or our employees not being able to get to work for whatever reason like bad weather conditions, another site must be ready to jump in as quickly as possible. The addition of a third site increases our availability and thereby the reliability for our customers that we can fulfil the service level agreement. Even now there are detailed plans in case of emergency: who does what when one site goes down, which employees can work from home, etc. With the involvement of Pécs in our system we increase the IT-Security and service quality for our customers.
A new site also offers the opportunity to do some things entirely differently…
We will take advantage of that. For example in Pécs many of our colleagues will work with a so-called virtual desktop infrastructure from the Cloud. That means those colleagues won’t have PCs and laptops but only will work with screens, keyboards and headsets. The applications are not located on the individual computer any more but on the servers that are located in the fail-safe and monitored data centers of T-Systems. That enables us both to increase security and to reduce costs.
That requires good transmission quality.
That is already available, as is the required buffer capacity of the main memories, which are the real bottlenecks. Those are important to ensure the virtually realtime data flow from and to the customer and to allow volumes to be processed at high speed.
How did you get the go-ahead for Pécs from Germany?
Hungary stands out due to its well trained employees and their German skills. The cultural, time and geographical proximity to Germany also speak for Hungary, though we are always compared to locations in other European countries. In outsourcing business in the case of new projects, individual location factors are carefully weighed up. T-Systems pays particulary attention to factors such as personnel costs, project times, employee qualifications, project transition and cultural differences. In general it is advantageous to expand existing sites than opening entirely new ones.
How will things continue at your Budapest site?
We are continuing to expand in Budapest, especially because certain skills are only available in the capital. Despite high personnel costs, in many areas there is no alternative in Hungary to Budapest. However, Budapest is not our main focus. We want to expand outside Budapest in particular. Budapest takes over tasks that cannot be covered elsewhere.
We have just extended our contract with IVG Hungary for office space in the Infopark for an additional five years. In the new lease contract, we have agreed on additional office space of 2,000 sqm in total in Buildings B and C. We also explored thoroughly other options in terms of office space in Budapest. Finally, however, we decided for various reasons to stay at Infopark.
How are things in terms of fluctuation?
That is unfortunately a recurring topic, especially when it comes to call-centre work. For young people it is often simply a job that they are quite ready to switch for a better offer. We try to counteract that by offering attractive training opportunities, free language courses, loyalty bonuses, career plans, etc. That definitely works. In the current climate especially, employees value the security that a job with us provides. The positive image that Deutsche Telekom enjoys in Hungary helps considerably. Soft factors such as the atmosphere in the company and relations between employees and their managers are also very important. Young people are very active on all kinds of online forums. If we were not described in such positive terms there, we would definitely notice that when it comes to human resources. Taking all factors into consideration, I can say that we are well positioned in Hungary and do not need to have any great concerns about the supply of qualified, well motivated employees in the future either.
