Having remained long under the shadows of the big 5, Patni set upon 2004-05
with a clear set of action plans-put a verticalization strategy in place,
reduce GE dependence, have a more proportional revenue distribution across
geographies, rationalize the onsite-offshore mix, and enhance the scope of
client relationship by means of new offerings like BPO and IT consulting. A
report card on its performance during the year shows, starts were made in all
areas identified, though results obtained indicated success in varying measures.
The most important success was, without doubt, achieved in verticalization-though
late in the game, this strategy helped Patni successfully tackle a few other
pain areas too. The acquisition of the US-based Cymbal Corporation for $68 mn in
an all-cash deal gave Patni a foothold into the growing telecom sector; it
brought 14 new telecom clients including blue-chips like SDC, Virgin Mobile,
Yahoo, Sprint Canada, 3, Cable & Wireless, AT&T, and Avaya into its
fold. With most of these deals already generating more than $1 mn in revenues,
Patni managed to add 20 mn-dollar customers to its kitty during the year. Not to
mention, the cross-selling opportunities offered by these new additions.
Verticalization also helped Patni reduce its GE dependence-though this
13-year old relation grew to more than $100 mn, the dependence had come down to
31% only. In fact, the contribution of the Top 10 clients came down by 12 points
to 64% during the year, even as the business from those outside Top 10 grew by
69%–last year the top 2, GE and State Farm Insurance, by themselves, had
accounted for more than 60%. Businesses from Europe and Japan contributed 42% of
the total revenues. It expanded its European operations into Amsterdam,
Stuttgart, Munich and Scandinavia.
Patni increased its service offerings too-BPO, IT consulting, and
infrastructure management were identified as new service lines, especially for
the insurance and telecom verticals. The earlier acquisition of Reference helped
Patni beef up its insurance expertise. As Patni built up its competency across
end-to-end solutions, it also identified key strategic moves necessary to grow
individual service lines: some of these included more nearshore operations for
telecom, moving into more IT consulting at nearshore centers and create a
front-end for embedded systems business in Japan.