Customer retention key driver for outsourcing in Europe

MUMBAI: Top decision-makers in Europe consider customer retention to be one

of the most important drivers for companies to outsource, according to a survey.








Taking views from 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, done by Patni Computer Systems 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

organization. Sixty-four per cent of those polled mentioned 'Customer

Satisfaction and Retention' as their top IT priority followed by 'Business

Continuity' (74%) and 'Security' (55%). Seventy-three per cent of the

respondents suggested that their investments in IT had increased over the last

one year.






European FSI companies directly correlate outsourcing efficiencies to customer
satisfaction and hence view outsourcing from a broader perspective. Sixty-four

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. Forty-five per cent of the respondents believed that

outsourcing would help them free internal resources to focus on their core

functions.






The survey also found that financial services organizations in Europe are slowly
catching onto the outsourcing wave. Twenty-seven per cent of the respondents

suggested that they would look to increase the amount of work that they

outsource over the next 12 months. Sixty-three 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%) were keen to adopt new
technologies and believed that these could be an integral part of their IT

strategy.






The survey also added that India was the country of choice for a significant
portion of the respondents (45%) followed by Western Europe (36%).






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.”






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