Customer retention is key driver for IT outsourcing in Europe: Patni IDC
12 Jul 2006
Mumbai: Patni Computer Systems today announced that a recent survey of top decision-makers in Europe has found 'customer retention' to be one of the most important drivers for companies to outsource.
Reflecting the views of CIOs, CTOs and business leaders of financial services and insurance (FSI) companies based in Europe, the survey outlines outsourcing strategies being adopted by companies in these verticals. The survey by Patni in conjunction with IDC at its FSI conference in London also revealed that apart from India, Western Europe was a preferred outsourcing destination for companies in Europe.
According to the IDC-Patni FSI survey, European FSI companies believe that their outsourcing strategy needs to be in tandem with the IT priorities of the organisation. 64 per cent of those polled mentioned 'customer satisfaction and retention' as their top IT priority followed by 'business continuity' (74 per cent) and 'security' (55 per cent). 73 per cent of the respondents suggested that their investments in IT had increased over the last 12 months.
European FSI companies directly correlate outsourcing efficiencies to customer satisfaction and hence view outsourcing from a broader perspective. 64 per cent of the respondents mentioned that a vendor's flexibility in adapting to the changing client requirements was one of the most important criteria in vendor selection. 45 per cent of the respondents believed that outsourcing would help them free internal resources to focus on their core functions.
The survey uncovered some other trends in the European market on how outsourcing strategies are integrated into business plans:
- Financial Services organizations in Europe are slowly but surely catching onto the outsourcing wave. 27 per cent of the respondents suggested that they would look to increase the amount of work that they outsource over the next 12 months. 63 per cent of the respondents suggested that they would maintain the amount of work outsourced in the following year.
- Industry expertise, vendor reputation, flexibility in partnership and resource skills were amongst the key criteria, apart from cost, that European FSI organizations look at while selecting a partner.
- A significant percentage of respondents (63 per cent) were keen to adopt new technologies and believed that these could be an integral part of their IT strategy.
- India was the country of choice for a significant portion of the respondents (45 per cent) followed by Western Europe (36 per cent). China, other Asian countries and Eastern Europe did not find much favour as outsourcing destinations amongst European companies.
Commenting on the survey, Peter Farley, MD, EMEA, Financial Insights, said, "The survey results are a clear indication that banks and insurers recognize the need to focus on their core competencies if they are to deliver customer satisfaction. The fact that more financial services firms are outsourcing non-core activities (or considering such a move) bears testimony to the fact that many of these businesses now understand that delivering better products and services to existing customers is more important than winning new ones."
Sukumar Namjoshi, Managing Director, Patni UK said, "This survey gives us a directional insight of the European market. It clearly underlines the fact that technology requirements across the FSI segment is growing at a steady rate. Cost is no longer the key outsourcing criteria for the European FSI industry. Flexibility in partnership, domain expertise and reputation of the vendor are the drivers of the industry."
Financial Insights is the specialist end-user research and consulting subsidiary of IDC that focuses on challenges facing financial organizations and how technology can provide solutions. It has a team of over 30 analysts based in the main global financial centers. Parent company IDC is one of the foremost technology research and consulting groups in the world with over 850 analysts located in all the main global business locations.