Outsourcing budgets expected to rise over next year: Patni survey

Mumbai: A recent survey of top decision-makers on corporate technology and spending, conducted by Patni Computer Systems (BSE: PATNI COMPUT, NSE: PATNI, NYSE: PTI) in Georgia, USA, 89 per cent plan to increase their outsourcing budget over the next 12 months.

Specifically, 39 per cent responded that they expect to increase budgets by up to 20 per cent over their current spending, while 11 per cent plan a 50 per cent 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 per cent) and quality of service (24 per cent) tied as the number one factor, followed by domain expertise (19 per cent). Only 14 per cent 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 per cent ) in this year's survey, was cited by only 10 per cent of last year's respondents. This increase comes as internal / external team integration When making the transition to outsourcing, 34 per cent 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 per cent have an in-house change management team while 12 per cent rely on their service vendor and another 12 per cent utilise outside consultants.
• Only 8 per cent 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 per cent said they expected better quality resources and enhanced services at a lower cost; 28 per cent cited better insight and manageability of costs.
• Building Service Oriented Architectures (SOA) is top of mind in regards to future investments. Twenty-seven per cent selected SOA as their biggest IT investment over the next two years, followed by Business Intelligence (18 per cent).