The Covid-19 pandemic has accelerated many trends that have been taking shape in the business world, such as nearshoring, home-office working, e-commerce – but above all the process of digitalisation. The increased reliance of business on digital solutions has placed a strain on the IT sector, with an increased demand for the skills of analysts, programmers and web developers. How has Sage’s IT hub in Poland been affected?
The situation in which we have all found ourselves has demonstrated how closely the economy is linked to technologies these days. Companies that were falling behind with digitalisation have suffered from the lockdown effects to the greatest extent. Take sales as an example: a company that did not have an online sales channel and whose business was based on traditional points of sale, has been physically separated from its customer base, and this has, in effect, precluded its ability to operate.
Home-based work and simple activities, such as the exchange of documents among employees, or remote project management have turned out to be big challenges. At Sage we have been practising remote work for many years, so we only needed three days to switch our business to a new model. Even services such as the implementation of solutions at customers’ premises are now being rendered online, with great success. Still, many of our customers, plenty of whom are SMEs, were not ready to embrace this way of working. In the past they believed that remote work was not an option for them. Today they need to reconsider as, to my mind, we are heading towards a permanent change in the way work is organised, and this will become the new normal.
The Polish government’s Anti-Covid Shield, which has been amended several times, shows the vital importance of software in the interface between the tax authorities and business. Many complaints from entrepreneurs about unnecessarily complex procedures suggest that the government’s digitalisation programme needs accelerating. How do you see the announcement that the government will create a ‘national cloud’ with Microsoft and PKO BP? Do you see any opportunities for Sage within this billion-dollar project?
Polish entrepreneurs clearly need support because only a few of them were prepared for such a long downtime or for the restrictions in conducting economic activity. The Anti-Covid Shield in its current form is more like a painkiller to alleviate the symptoms right here, right now than a sustainable treatment to cure the patient.
The main aim of the Shield is to enhance the liquidity of companies, to help them survive the upcoming weeks. In no way is it a strategic and long-term means of assistance; nor does it suggest how to prepare business for successive months of work under the new circumstances or how to boost competitiveness. So, the demand for investment in digitalisation in Poland is now at a higher level than ever before.
As for the national cloud: this is great news! We have an immense technological deficit; consequently, all investment in this area is crucial. And yet again, this is not enough to guarantee rapid development for Polish companies. To that end, strategic and consistent state aid is necessary.
How has Sage Polska responded operationally to the lockdown? What measures did you take to ensure the health and safety of your staff, as well as business continuity? How have your clients coped, and what effect do you think Covid-19 will have on Poland’s economy this year?
Ensuring the safety of our employees is our priority. For this reason, at Sage, we quickly decided to close our offices – not just in Poland but all over the world. The same goes for customer service and the implementation of solutions I mentioned earlier: we made the complete switch to online communications. Current technology means we can conduct such tasks in a fully remote mode. Still, for many SMEs, remote work has proved to be extremely challenging; the reason being not only poor preparedness in terms of technology but also the lack of readiness to manage a scattered team and the lack of a proper work culture. Even though the lockdown proved that business can be continued remotely, many companies have been struggling with a mental barrier. In fact, the same applies to digitalisation in general.
As our organisation was pretty well prepared to work remotely, we were able to concentrate on providing help to our customers and SMEs. For instance, we shared our know-how and experience of home-based work and we provided access to several applications to improve remote work free of charge. Unfortunately, the economic blockade has been the most damaging to the smallest companies and we are bound to observe the repercussions of this fact at the end of the year.
How is the implementation of initiatives such as the Single Audit File (Tax), split payment of VAT, real-time reporting and Employee’s Capital Plans among Sage’s clients in Poland, especially the SMEs? Is Sage still having to do much of the educational activities surrounding the roll-out of these government initiatives?
The lockdown has redefined many social and business concerns. Without technological support, online communication and electronic processing of documents, many legal obligations cannot be fulfilled. Digitalisation had been mostly visible in the area of taxation; these days, however, we are discussing the digitalisation of the whole business and of many legal areas. The process of digitalisation is bound to accelerate even more.
Hence, at Sage, we devote a lot of attention to educating SMEs and presenting the practical aspects of digital transformation, as well as the competitive advantages that digitalisation provides. We closely follow the legislation process and cooperate with professional organisations; also, we are members of the Digital Poland Foundation, whose mission is precisely the education and promotion of widespread digitalisation. Technological development will bring benefits to us all.
Looking at Sage Polska’s position within the Sage Group plc, in particular the Warsaw IT hub, how is Poland perceived by headquarters, and what are your plans for future expansion?
Digitalisation is a considerable challenge faced by Polish companies. According to Eurostat, the digital maturity level of the Polish economy is almost the lowest in the whole of the European Union. We have a huge gap to bridge in order to match Western Europe, or even some countries in our region, for that matter. So, from the perspective of the Sage Group, Poland is a very promising market that offers many opportunities.
In the immediate future we will focus more on so-called hybrid solutions – software that combines traditional solutions with the cloud. This is the most appealing and the quickest digitalisation path from the viewpoint of the SME sector in Poland. We will continue to develop the Polish hub towards the SaaS model in which the whole Sage Group operates. As we speak, over 80% of our solutions are available in the form of subscriptions, which is not a common way to use IT solutions in Poland. However, this model will become ever more popular as it gives flexibility, reduces investment costs and ensures better service.
Speaking personally, how do you see the global economy changing in the long term in response to the pandemic? Will we ever return to the ‘old normal’?
These days we are facing a shift in the work paradigm. Many entrepreneurs have concluded that remote work is feasible; if not fully, then at least to some extent. The need to rely more on digital communication has made people realise that many activities can be performed cheaper, quicker and better. So – we should get used to working remotely. The role of the office as the main centre of work will evolve and the demand for digital services and technologies will rise. Even small local businesses will need to embrace digital transformation to safeguard their operations. To that end, long-term and well-thought-through investments will be necessarily accompanied by a change in mindset.