Patni Computer Systems survey finds Multi-Vendor Outsourcing on the Rise

Patni Computer Systems Ltd on September 28, 2006 has 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.

The Company 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:

1. IT Strategy & Outsourcing:
a. 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.

b. 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%.

c. 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.

2. Investments & Initiatives:
a. 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.

b. 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%.

3. Customer-Vendor Relationship:
a. 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. The Company provides a platform for Patni clients, IT & business leaders, and academic professionals to interact with the Company senior management and debate future trends in IT and outsourcing. This year, The Company 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.

Source : Equity Bulls

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