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35 (130) 2018
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Interviews

It's all about efficiency and scalability

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Piotr Ciski, country manager of Sage in Poland, talks to Michael Dembinski about the accelerating pace of IT-driven innovation is changing the business environment.

We begin by discussing the huge steps taken by the Polish state in terms of the digitising tax. Now that the Single Audit File – Tax (SAF-T, or JPK) has been fully implemented, and split payment of VAT is being introduced (from 1 July, voluntarily at first), we can see how the Polish tax authorities are using digital tools to improve the process of collecting (and checking) tax payments. This is one global digital trend in which Poland is ahead of the curve; in others, it has some catching up to do.

“What we're seeing now is an acceleration of digitisation to achieve efficiency and scalability”, says Mr Ciski. “Digitisation of tax reflects this trend, as tax authorities begin to migrate from traditional tax inspections to digital verification. It's more efficient – for the tax payer and for the tax authority. Expensive human resources and travel can be replaced by scaleable technology; the effectiveness of tax collection is no longer dependent on the number of people who are doing the collecting.”

“With new digital tools available, the tax authorities are becoming much better at making a tax system that is watertight and not open to abuse or fraud from criminals,” he says. But as new solutions are being introduced, there will be a one-off cost that companies will need to pay, mainly for new software and staff training. But once that's done, and the new system is working, it will be a huge improvement over the old ways of paying tax. “In terms of the political and legal changes, there's no dispute as to whether this process is right or wrong – everyone agrees that it needs to be done. There will be a one-off cost of executing this process for the state too – substituting HR cost for IT cost – but it will offer scalability,” says Mr Ciski.

This is part of a general trend – “it's not just about tax systems. Companies need efficiency and scale,” he says. Around the world, in every economy, these are the two watchwords – efficiency and scalability; businesses' insatiable demand for digitally driven innovation means that “the market for the people who can do this for them is becoming more demanding.” A growing economy and finite human capital means that employers are looking for IT systems that can do the jobs once done by people. It means a dislocation in the labour market.

If handled right, the demographic dip that Poland is experiencing can be evened out by labour force automation. If handled badly, the miss-match between the skills that employers need and the lack of people with those skills in a shrinking population will exacerbate the problem. “Some people won't be able to find jobs, while on the other hand, obsolete jobs will remain on the market, making the economy less competitive,” says Mr Ciski. “This is evolution. We can't stop it.”

So what is the role of the state? There are two issues to consider. One is investment in R&D. The other is education and training. Governments and private investors around the world are investing heavily in AI; the UK, the EU, China all have programmes intended to support its development – the AI sector has the potential to add hundreds of billions of dollars to the global economy by 2030.

Poland is way behind in many areas of digitisation; according to Eurostat's Digital Economy & Society Index for 2017, Poland is in 23rd place out of 28 EU member states when it comes to the digital maturity of its economy. Polish private-sector businesses are ahead of only Romania when it comes to their uptake of ERP (Enterprise Resource Planning) software that integrates core business functions within a firm. And research conducted by the Polish statistical office (GUS) between 2013-17, shows that Polish firms are sill scared of IT. Only 10% of businesses use cloud computing; one-third of all Polish businesses don't have a website while one in ten doesn't even have internet access. “Polish companies are behind – they have some catching up to do. EU funds help to accelerate this change for our SMEs,” says Mr Ciski.

“It is crucial that if Poland is to avoid a situation whereby employers can't find people with the skills they need, and employees can't find work because they don't have those skill, there needs to be closer cooperation between the authorities, business and academia,” says Mr Ciski.

“If Poland is to be a global challenger, it needs to be ready. The change has to happen at secondary schools. IT is a really important subject at secondary level! Teachers need to be prepared to teach IT in the right numbers. At the university level, it's already too late. The number of students willing to pursue IT studies at tertiary level is determined by the quality of teaching at secondary schools,” he says. There are signs that something is changing – the government has increased the number of hours of IT teaching for pupils aged 11-18 from 210 hours to 280 hours. And teaching IT to the very youngest primary school children is also cominHowever, this raises the question of whether there are enough IT teachers on the market – and whether they'll be good enough.

“If we look at the number of IT graduates leaving Polish universities each year, we can see a there's shortage of tech people. A further problem is this - not all programmers at all universities are really aligned with today's labour market. Fresh graduates need half a year before they can execute their jobs properly. Employers are forced to take on the costs of ramping them up. Some graduates can adapt in two to three months before they get working productively. Some take more than a year,” admits Mr Ciski.

But these are short-term needs. “We need an ongoing discussion with universities to structure their IT programmes for the next five to ten years. And this means the need for a dialogue between secondary schools and the university professors.”

I ask whether every person employed in IT needs to have a Master's degree in IT science. “Not all jobs in IT require graduate-level education. The labour market has changing needs. And if we look at the balance between graduates with a Masters' degree versus those with a Bachelors' degree... A programme can be done in three years at universities. Those extra two years to gain a Master's degree don't really bring too much benefit to employers. A four-year university course would be totally sufficient to prepare graduates for work. But more importantly, whatever their length, the programmes at universities shouldn't focus on today's needs on the labour market, but the skills that employers will be looking for in the future,” he says. “Sage in Warsaw has people from eight different nationalities working here. More and more diversity is also a part of the solution.”

“We need to consider also re-educating older IT workers, those with over ten years' experience in the sector, to retrain them mid-career; generally we need to learn how to teach adults new skills.” I ask Mr Ciski how those skills needs will change in the near future. “Language – interface,” he replies. “Programmers will be able to write code using voice interface, rather than a keyboard, using natural language commands. And we are changing the way we consume IT – across many platforms and channels; the user interface will become infinitely adjustable to suit individual preferences. Security will also be an increasingly important issue across the industry – technology creates different threats to society, but I believe that they will be tackled,” said Mr Ciski.

He mentions AI's rising star – everyone seems to be talking about AI. “It existed ten years ago, 30 years ago, it's had its ups and its downs, it's been through autumn now it spring again, its on the cover of magazines. It is introducing new technologies, it will lower barriers, AI-driven voice recognition means you can talk to your software – our Sage Chatbot allows you to talk to your data. At the moment, AI is doing only a fraction of what it can do, it is not yet used on an important scale,” he says.

But what about jobs? What will happen when AI does become commonplace, when the machine has learnt far more than it knows today? “AI will steal jobs – but – the sheer increases in productivity it offers will be of huge benefit to society. Look at the banking sector, for example. It is still a large employer of people, despite the technological advances that have occurred over the decades since the advent of the ATMs and online banking. The use of electricity on a broad scale didn't destroy jobs. It's just the nature of the jobs that has changed. Different types of skills are needed, different types of skills will be hired, following the same pattern. Jobs involving data entry will disappear as will many other repetitive forms of work that do not involve analysis and decision-taking. Even so there will be resistance – people don't want to be substituted by robots or AI. But such has always been the nature of technological evolution – it's normal. As some jobs and technologies become obsolete, new ones will spring up to take their place,” says Mr Ciski.

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