89% to increase outsourcing budgets for corporate technology - Patni Computer Systems

Source: Patni Computer Systems

Patni Computer Systems (NYSE:PTI) today announced that in a recent survey of top decision-makers on corporate technology and spending, 89 percent plan to increase their outsourcing budget over the next 12 months.

Specifically, 39 percent responded that they expect to increase budgets by up to 20 percent over their current spending, while 11 percent plan a 50 percent or more increase.

The survey was conducted at Patni's annual user conference, PatniConnect, which brought together more than 100 Global CIOs and business leaders from the company's customer base in the USA, UK and Asia Pacific regions, along with pre-eminent industry analysts and professionals.

The survey uncovered several other revealing tendencies about how customers are incorporating outsourcing strategies into their business plans:

  • Pricing is not the most important factor in selecting an outsourcing partner. Cultural fit (24%) and quality of service (24%) tied as the number one factor, followed by domain expertise (19%). Only 14% of respondents selected price as their single most important factor in selecting an outsourcer.

  • Cultural fit, tied for the top factor in selecting an outsourcing vendor (24%) in this year's survey, was cited by only 10% of last year's respondents. This increase comes as internal/external team integration deepens in many outsourcing arrangements.

  • When making the transition to outsourcing, 34% reported not having any formal change management process in place to manage the transition, the same figure reported from last year's survey. Forty-one percent have an in-house change management team while 12% rely on their service vendor and another 12% utilize outside consultants.

  • Only 8% of respondents predict that their overall IT Services budgets will be reduced this year, an indication of the health of the overall market.

  • When asked what their top expectation is from an outsourcing relationship, 61% said they expected better quality resources and enhanced services at a lower cost; 28% cited better insight and manageability of costs.

  • Building Service Oriented Architectures (SOA) is top of mind in regards to future investments. Twenty-seven percent selected SOA as their biggest IT investment over the next two years, followed by Business Intelligence (18%).

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