CBS

PATNI COMPUTER
CASE STUDY WRITEUP

Patni Computer Systems

Patni Computer Systems Ltd incorporated by Narendra Patni in 1978 is one of the leading
global providers of Information Technology services and business solutions. Over 16,000
professionals service clients across diverse industries, from 30 international offices across the
Americas, Europe and Asia-Pacific, and 22 Global Delivery Centers in strategic locations across
the world. They have serviced more than 400 FORTUNE 1000 companies, for over two
decades.It is also the oldest IT company in INDIA.
Patni Computer Systems (Patni) is a provider of information technology (IT) services and
solutions. The companys service lines include application development, application maintenance
and support, packaged software implementation, infrastructure management services, product
engineering services, business process outsourcing and quality assurance services.
Patni offers services through industry-focused practices, including insurance; manufacturing,
retail and distribution; financial services; and communications, media and utilities.
The company primarily operates in the US and India. It is headquartered in Mumbai, India and
employs about 14,000 people. The company recorded revenues of $655.9 million during the
financial year ended December 2009 (FY2009), a decrease of 8.8% over FY2008.
The operating profit of the company was $100.6 million in FY2009, an increase of 31.4% over
FY2008. Its net profit was $119.8 million in FY2009, an increase of 18.1% over the previous
year.
The strategies adopted by Patni computer:
Project scoping-Here solutions depend on different verticals.Then it is time to go to the market to
find matching.It requires across the board solutions.Solution selling is a difficult task only we
can know what departments to target like IT department in an organization.But IT people may
ask many searching questions.Multiple respondent systems is a big issues here since it takes a lot
to convince more than one respondent in an organization.Patni computers brought in Mc Kinsey
to give advice on restructuring the organization.To focus on verticals we need to have deep
knowledge on that verticals.

Sometimes we need to target micro-verticals like back office of retails,in phamateuticals

development of molecules .
Initially some broad solutions based on skills of human resource are requied(embedded
solutions,e-commerce).Then the next step is to customize the solution like Finnacle developed
by Infosys.Then it is necessary to back up those verticals with horizontal support by
solutions(like solution bank).Therefore suitable manpower i.e brains.So attracting talent is a big
challenge.Vision re-engineering.The sales people can convince the clients that they have better
knowledge of client future business like Accenture.

Main points:
Product selling is different from solutuion selling
Solution selling is a special approach to sales. Rather than just promoting an existing product, the
salesperson focuses on the customer's problems and addresses the issue with his or her offerings
(product and services). The resolution of the pain is what constitutes a true "solution".
Solution will be created in the bank then we need to find suitably fit with customer
requirement.For these things to happen lot of back and forth consultation with customers for
need specifications are required.Therefore we can conclude project scoping preceeds
selling.Long selling cycle-:No termination point:regular consultation:After marketing
activities:Relationship building:Service level aggrement.
Some unforeseen problem may arise which are mentioned in the manual which can
eventually lead to stoppage of processes.(Enterprise solution background.Since large number of
manpower is deployed throughout the entire process there exists tremendous scope of
conflict.Nurturing visits are very essential to build up relationship through providing rich
knowledge in the form of value addition.Ability to quickly respond (near shoring,offshoring and
onshoring.In case of Patni computers the selling strategy can be typified as consultative
marketing.
Consultative Marketing emphasizes the exchange of information between the company and customers.
This type of marketing is value based; it begins to segment customers based on needs and provide
information that is valuable to individuals. Consultative marketing is performed on a smaller scale and
requires significantly less financial resources, but requires a substantial time investment for each
transaction. In this model the cost per sale may be high, but the sales conversion rate is high as well.The
aim of consultative marketing is to target key decision makers and influencers and promote the supplier to
them as a value-added solution provider. Consultative marketing also supports the creation and

communication of thought leadership and value-added content through which the relationship is sustained
and developed

In a country facing an actuary crunch, Patni Computer Systems Ltd is relying on many kinds of
people to do the work of one.
A few years ago, when the software company wanted to get into the outsourcing business, it
turned to someone with a proven track record in BPO: Sanjay Kapur, who had helped HCL
Technologies Ltd set up its unit.
Patni told him that it wanted to do complicated finance and insurance work, the kind of stuff
clients dont even think of outsourcing. Actuaries assess financial risk, calculate insurance
premiums and value pension funds, all of which require specialized training in math, statistics,
accounting and insurance probabilities.

DIVISION OF WORK
If I went to a client and said I want to do your actuarial evaluations, Kapur recalls himself
worrying, he would have thrown me out of his office.
So, instead of waiting for clients, Kapur, who now heads Patnis BPO arm, thought of different
routes.
If Patni was going to handle something like actuarial workmeaning evaluating whether or not
a pension fund has enough assets to pay off promised benefits, and calculating prices and
payouts for insurance policiesit would have to break it down into a process.
Its strategy is significant because it represents how BPO firms are moving into the more lucrative
knowledge process outsourcing, or KPOeven amid rising salaries and a talent crunch. It also
reflects a new role for clients, often based in the US and Europe, as mentors to industries that are
new and skill-intensive for Indians.
When Patni looked into the practice last year, the prospective numbers looked good. Similar
kinds of so-called KPO services generated $3 billion (around Rs12,000 crore) in revenue and
were on track to quadruple by the end of the decade. Actuarial departments were running up big
bills for Patnis US clients since actuaries were both expensive and difficult to find in that
country. Insurance analysis also seemed like a field well suited to India, with its mathematicsheavy education system.
The only hitch was that India shared the US problem when it came to actuaries. First, they were
hard to find. The Indian insurance industry had historically been a small one, and there were only
about 225 certified actuaries in the country. Then, they were also expensive.

I would have to pay the earth and the moon for them, Kapur says. More specifically, he would
have spent anywhere from Rs18 lakh to Rs35 lakh per year to hire each one. To become certified,
students have to pass 14 papers administered by the Actuarial Society of India, and the course
often takes 10 years to complete.
After considering, then discarding, the idea of hiring as many actuaries as the company could
afford, Kapur considered hiring actuarial students, a potential recruitment pool of around 6,000.
When that also seemed unfeasible, Patni applied to actuarial work what BPO firms have already
done to other fieldsbreak it down into a process.
Patni brought in a couple of senior actuaries as consultants to divide the work flow into simple,
mid-level and complex tasks. They estimated that 50-60% of the work fell into the easiest
category, with responsibilities such as cleaning up data and crunching numbers. To staff that
section, Patni scoured the country for the colleges with the best mathematics and statistics
departments, and headed out to places such as Cotton College in Guwahati, Bishop Heber
College in Trichy, and St Aloscious College in Mangalore to recruit.
For mid-level tasks such as actually analyzing the data, they took actuarial students who had
completed between four and eight of the necessary papers. For the top-end work of preparing the
final evaluation and report, which would be less than 5% of the total process, they hired two
certified actuaries.
To convince his first client that it could even be done, Kapur ran a six-month pilot where the
client continued to do its work, and Patni set up a parallel run, charged at cost. Once the trial was
successful, Patni scaled the process up to 125 people, who are now spread over three clients.
Patni runs a two-month training programme for its new hires, but relies on a split staff to manage
the work. In company lingo, there are the doers and the checkers. While the mid-to-senior
level employees create and test out financial models, they also double-check the work of their
junior counterparts.
The pay scale within the actuarial process is a sliding one and depends on how many papers an
employee has cleared. The salary starts at Rs3 lakh at the entry level, moves to between Rs5.5
lakh and Rs7 lakh with five papers cleared, and doubles again with experience.
The field is still a relatively small one, and for those further along in their course work, even
finding it was often a fluke. Siddhartha Kalita, a manager in Patnis actuarial process who has
finished 11 out of 14 papers, only came across the possibility when he was finishing a degree in
statistics at the University of Delhi, and interviewed with an insurance company. He didnt get
the gig, which would have included a stint in the UK to study actuarial science, but it piqued his
interest. After finishing nine papers in the UK, he put in a few years at an Indian insurance
company and with an Indian insurance consulting firm before joining Patni via a newspaper ad.
Kriti Kalra, a more recent recruit to the actuarial profession, had a more clear-cut route to Patni.
She was finishing a degree in mathematics at Miranda House in Delhi University, and heard

about the companys actuarial department from senior classmates in the postgraduate
programme. Her resume made it to Patni through a consultant, and she got the job.
Other BPO firms that have actuarial departments pursued a slightly different tactic. Genpact Ltd,
which started its group in 2003 at the behest of several clients, hired both statisticians and
actuarial students in its first run with 20 staffers. The company then set up an in-house
programme to cultivate talent, focused on guiding students through the exam process. The
programme provides study leave and relies on actuarial mentors from their clients to advise the
student-cum-employees, who now number 75, and make sure they are getting the right kind of
experience.
Could we have done this on our own? No, says Mohit Thukral, a senior vice-president at
Genpact who leads the companys insurance business. Only because we were able to partner
with a customer was it possible, he says.
The market for actuarial outsourcers isnt a huge one. Its a niche area, says Thukral, the
numbers are not in the thousands; they are more in the hundreds. But its growing. Genpact
plans to double its practice in the next two years, and Kapur expects Patnis business to grow by
70- 80% this year.
For the market to grow substantially, says Thukral, its up to Indias colleges to invest in building
an actuarial talent pool so that BPO firms arent poaching for recruits. He adds: We need to
build a programme where were not pinching each other.