Survey finds multi-vendor outsourcing on the rise
CAMBRIDGE, Mass., Sept. 28, 2006 -- Patni Computer Systems (BSE: PATNI COMPUT, NSE: PATNI, NYSE: PTI) today announced the results of a recent CIO survey conducted at its annual customer conference, 'PatniConnect'. According to the survey, 45% of the respondents prefer leveraging multiple vendors for specific project requirements with work competitively distributed, as opposed to 17% favoring global deals with a single service provider.
Patni conducted the survey with more than 100 Global CIOs and business leaders from the company's customer base across the US, Europe and Asia. The survey also revealed the Global CIO's vision on IT Strategy & Outsourcing, Investments & Initiatives, and Customer-Vendor Relationship. Key findings include:
* IT Strategy & Outsourcing:
- With multi-sourcing gaining traction within the industry, vendor selection is moving away from a country-specific to a more global, talent-based destination mix. The survey saw 32% still depending largely on India for offshore requirements, but a close 29% selected sourcing requirements from multiple locations. Twenty-three (23%) of the respondents mix a large local sourcing component with an offshoring component.
- Although cost savings is still an important factor in selecting an outsourcing partner, 33% of the respondents indicated that quality of services was the primary concern. Cultural fit, the top choice in last year's survey, slipped to third place at 15%, while lowest cost was tied with flexibility for fourth in importance at 10%.
- While the number of those employing IT-based captives was up slightly from last year, an overwhelming 67% of the respondents indicated that they do not have captive offshore facilities and have no plans to set them up. Customers see captive facilities as a substantial obligation and as long as they are getting measurable results from their service providers, they do not see any reason to run their own centers offshore.
* Investments & Initiatives:
- Technologies such as Web Services, SOA and Business Service Management (BSM) were rated high investment areas over the next two years. Increasing emphasis on Web services and SOA indicates that CIOs want technologies that allow more flexibility.
- Ninety-four percent (94%) of the respondents cited an increase in their outsourcing budgets overall, with nearly two-thirds (65%) indicating increases ranging from 5-35%.
* Customer-Vendor Relationship
- The risk/reward framework (fixed price contracts with pre-defined SLA commitments) is the most preferred mode of commercial engagement allowing for a more globally competitive environment (29%), followed closely by fixed price contracts (26%) where customers are cushioned against industry inflation in specific economies.
PatniConnect provides a platform for Patni clients, IT & business leaders, and academic professionals to interact with Patni senior management and debate future trends in IT and outsourcing. This year, PatniConnect celebrated its third anniversary, featuring keynotes by Tom Stewart, Editor-in-Chief of the Harvard Business Review and David Tapper, Research Director IT Outsourcing, Utility Services and Global Offshore Services, IDC.
The three-day event in Austin, Texas was attended by key executives from across the technology, product engineering, insurance, financial services, telecommunications and manufacturing segments.
Patni Computer Systems Limited (BSE: PATNI COMPUT, NSE: PATNI, NYSE: PTI) is a global IT Services provider servicing Global 2000 clients. Patni caters to its clients through its industry-focused practices, including insurance, manufacturing, financial services, telecommunications, and its technology-focused practices.
With employee strength of over 12,000 and multiple offshore development facilities across eight cities; Patni has 23 international offices across the Americas, Europe and Asia-Pacific. Patni has registered revenues of US$ 450 million for the year 2005.
Patni's service offerings include application development, application maintenance and support, packaged software implementation, infrastructure management services, product engineering services, business process outsourcing and quality assurance services.
Committed to quality, Patni adds value to its client's businesses through well-established and structured methodologies, tools and techniques. Patni is an ISO 9001: 2000 certified and SEI-CMMi Level 5 organization, assessed enterprise wide at P-CMM Level 3. In keeping with its focus on continuous process improvements, Patni adopts Six Sigma practices as an integral part of its quality and process frameworks.
For more information on Patni, visit http://www.patni.com.
Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, liability for damages on our service contracts, the success of the companies in which Patni has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.
For further editorial information contact: For USA Tony Viola Patni Computer Systems 617.354.7424 firstname.lastname@example.org For India Heena Kanal Patni Computer Systems 98219 39992 email@example.com
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