The use of Vendor Management System has seen a dramatic increase in the past couple of years. Going by the results of a latest study, about 63 % of the companies surveyed already had a Vendor Management System in place. We expect that number to go higher - about 80 % - which is an astonishing fact considering that the outsourcing industry as a whole is not a lot more than a decade old.

There are various benefits of using a Vendor Management system, but overall we can classify them into 4 broad areas or perspectives:

(a) Transparency or Visibility
(b) Regulatory Compliance towards set Organizational rules
(c) Control of Costs Incurred on Managed Services
(d) Overall improvement in Efficiency of the Outsourcing Engagement

By having a 100% transparency within the specified workforce, the data that is shared is dynamic and correct – thus enabling companies to determine problem areas and mark out changes or improvements that are required. Various metrics that measure time, cost, compliance, quality, and quantity metrics are more meaningful when they are applied company-wide. Of the companies surveyed, one large retailer reported that through their use of their Vendor Management Tool, they were able to reduce resource lead times by 75% and Managed Services Cost by approximately 20%.

Achieving Regulatory Compliance via a Vendor Management Tool is another important advantage. With a VMS, companies can incorporate financial oversight and enforce corporate and governmental policies as it relates to the acquisition and management of contingent workers and outside services.

The biggest Return on Investment, especially in this particular economic environment, is provided by the later 2 benefits.

Companies can enforce strict budgets and, calculate hourly rates, claim volume discounts, regulate markups and overtime, and eliminate off-contract spending to cut costs immediately. Some cost savings are immediate - a large-scale retail customer of a VMS tool expects to realize $2 million in savings during the first year itself.

Lastly but very importantly, with a VMS solution deployed, companies can take quick decisions to help them automate and streamline the requisition process, enhance Vendor Connectivity and Collaboration – thereby reducing resource lead times and improve overall process standardization. The sum of these parts allows the companies to achieve greater efficiency while reducing overall costs.  

FINANCIAL HIGHLIGHTS

• Diluted earnings per share of $1.97, up 16 percent;
• Revenue of $22.9 billion, up 5 percent, flat adjusting for currency;
• Net income of $2.6 billion, up 13 percent;
• Pre-tax income of $3.5 billion, up 13 percent;
• Pre-tax margin of 15.4 percent, up 1 point;
• Gross profit margin of 43.6 percent, up 0.2 point;
• Free cash flow of $1.4 billion, up approximately $400 million;
• Software revenue up 11 percent;
• Systems and Technology revenue up 5 percent;
• Services revenue up 4 percent;
• Services signings of $12.3 billion, down 2 percent;
• Consulting services signings up 18 percent;
• Strategic Outsourcing signings up 6 percent;
• Services backlog of $134 billion, up $8 billion year to year;
• Full-year 2010 earnings-per-share expectations raised to at least $11.20.

http://www-03.ibm.com/press/us/en/pressrelease/29942.wss

Outsourcing activities continue to grow but what are customers really looking for in their outsourcing relationships? Some areas of importance in vendor customer discussions in the outsourcing industry in the coming months will be:

Vertical Domain expertise: Vendors who can create efficiency through consolidation and alignment will be winners in the upcoming months as companies seek to reduce operational costs and streamline processes.

Cost Plus Performance Metrics: Who has heard of SLA's or Service Level Agreements? Larger companies and their vendor partners live and breathe SLA's. Well, more and more focus on performance metrics will require outsourced vendors to provide not just competitive pricing based on a full-time equivalent (FTE) resource but also SLA metrics. That means that the vendors who can offer pricing based on outcome will be the most popular.

Vendor Management Offices: I continue to believe that vendor management offices will be key to the next generation procurement practices. And why wouldn't any company not want to have a centralized vendor management team to conduct better negotiations? Vendors offering Vendor Management Office setup services may find a good audience too.

LifeCycle Pricing: This technique goes hand-in-hand with a robust vendor management team but even individually it may be of importance.  Vendors and customers will focus more on pricing strategies that are competitive and mutually beneficial over the entire lifecycle of the contract and not just in year one or year five of the contractual term. Lifecycle pricing may allow vendors and customers to review and adjust prices based on volume change, demand, and other criteria which in the past were not quite an area of focus.

There are other interesting areas such as cloud computing, contracts coming up for renegotiation, etc.  that will also drive some behavior changes in the outsourcing industry. We'll keep an eye out and our ears to the ground to report on new trends in outsourcing....

GTL (NSE:GTL), a Global Group Enterprise, is a leading Network Services company, offering services and solutions to address the Network Life Cycle requirements of Telecom Carriers and Technology providers (OEMs). Global Holding Corporation Pvt. Ltd. is the holding company of “Global Group” that has 7 operating companies, two of which are listed on Indian Stock Exchanges. The Group has Operations across 46 countries, employs people of 22 nationalities and supports 18 social causes.

Key Highlights

• Annual Revenue growth of 15%
• Net Profit grows by 50%

Highlights – Full Year ending March 31, 2010

• Consolidated Revenue from Global Operations was Rs. 2,236.94 Crores for the year ended March 31, 2010 as against Rs. 1,941.15 Crores in the previous year, recording a growth of 15%
• Operating Profit before depreciation, Interest & Tax for the year ended March 31, 2010 was Rs. 340.36 Crores as against Rs. 285.97 Crores in the previous year, recording a growth of 19%
• Net Profit before extra-ordinary items for the year ended March 31, 2010 was Rs. 206.08 Crores as against Rs. 137.22 Crores in the previous year, recording a growth of 50%

Highlights – Quarter ending March 31, 2010

• Consolidated Revenue from Global Operations was Rs. 624.77 Crores for the quarter ended March 31, 2010 as against Rs. 565.92 Crores for the corresponding quarter in the previous year, recording a Y-o-Y growth of 10%
• Operating Profit before depreciation, Interest & Tax for the quarter ended March 31, 2010 was Rs. 89.86 Crores as against Rs. 78.70 Crores for the corresponding quarter in the previous year, recording a Y-o-Y growth of 14%
• Net Profit before extra-ordinary items for the quarter ended March 31, 2010 was Rs. 43.79 Crores as against Rs. 34.60 Crores for the corresponding quarter in the previous year, recording a Y-o-Y growth of 27%

Awards

• ‘Certificate for strong Commitment’ from CII-ITC Center of Excellence for Sustainable Development
• ‘No.1 Telecom Turnkey of the Year Award’ for FY 2008-09 for its leadership in offering Network Services by Voice & Data
• ‘Outstanding Achievement Trophy’ in the service category from Ramkrishna Bajaj National Quality Award Trust
• Global Engineering Partner Award from Huawei Technologies Co Ltd, for consistently delivering high performance and quality Network Services
• ‘Greentech Environment Excellence Award 2009’ for its efforts in environment management

Business Outlook

• Post the Aircel transaction, Global Group is expected to cross revenues of US$ 1.5 Billion, total Asset size of over US$ 5 Billion and more than 35,000 professionals (FY 2011E)

Polaris Software Lab (POLS.BO) is a leading Financial Technology company, with its comprehensive portfolio of products, services and consulting. Polaris has a talent strength of 9,000 solution architects, domain and technology experts. The company owns the largest set of Intellectual Properties in the form of a comprehensive product suite, Intellect Global Universal Banking (GUB) 10.0. IntellectTM is the first pure play SOA based application suite for Retail, Corporate, Investment banking and Insurance.

Polaris is headquartered in Chennai and has offices in all global financial hubs including Tokyo, Sydney, Hong Kong, Singapore, India, Dubai, Bahrain, Riyadh, London, Belfast, Zurich, Frankfurt, Toronto, New York, Chicago, Fremont, Pittsburgh and Chile.

Business Highlights

Quarter ending 31 March 2010 

1. Profit after tax (PAT) grew by 42% to Rs. 45.74 crore from Rs. 32.11 crore
2. Operating profit (EBITDA) grew by 6% to Rs. 58.14 crore from Rs. 54.78 crore on a sequential quarter on quarter basis
3. Revenues grew by 4% to Rs. 351.04 crore from Rs. 337.25 crore

• PAT rose by 17% to Rs. 152.84 crore from Rs. 130.71 crore
• Revenues were at Rs. 1353.76 crore
• EBITDA at Rs. 222.02 crore

Financial and Operating Highlights

· Profit after tax (PAT) margins moved to 13.03% from 9.52%, an increase of 351 bps over the same quarter last year

· Cash and cash equivalents totaled Rs. 504 crore, as against Rs. 340 crore in the previous year

·  During the quarter, the company incurred a foreign exchange loss of Rs. 33 lakh and recorded other income of Rs. 5.78 crore

·  For the fiscal 2010, the company recorded an EPS of Rs. 15.48 as against Rs. 13.25 in FY09

·  The company continued to record a balanced distribution of revenues from the major geographies with Americas contributing 44.5%, Europe contributing 24.5%, Asia Pacific & Japan contributing 21% and India 10% of the quarter revenues

Business Outlook

The Company is providing the following guidance in FY2010-11:

• EPS likely to grow between 31% – 33%

Zensar Technologies is among the top 25 software services providers from India. Zensar is the world's first enterprise-wide SEI CMM Level 5 Company and is certified as a CMMI Level 5 Company with industry expertise that spans Retail, Manufacturing, Banking, Insurance and Utilities. Zensar has more than 4700 employees with sales and operations presence across US, UK, Germany, Sweden, Finland, Middle East, South Africa, Hong Kong, Singapore, Australia and Japan. The Company supports Fortune 500 clients by delivering comprehensive services in mission-critical applications, enterprise applications, e-business, BPO and Knowledge Services. The Company has developed tools and methodologies, including the proprietary Solution BluePrint (SBP), which enables its clients with innovative business solutions and a rapid ‘go-to-market’ capability.

Financial Highlights

Consolidated Results for the quarter ended 31st March, 2010 vis-à-vis last year

• Revenue was up from Rs 908.08 Cr to Rs 952.76 Cr showing a 5 % growth y-o-y
• Net Income grew from Rs 86.56 Cr to Rs 127.56 Cr showing a 47 % growth y-o-y
• EPS up from Rs 36.12 to Rs 54.23 a growth of 50% y-o-y growth
  

Highlights for Fourth Quarter 2009-10

• Revenue was up from Rs. 214.76 Cr to Rs 232.65 Cr as against same quarter last year, showing 8% growth
• Net income was Rs 27.42 crores against Rs 23.03 crores for the same quarter last year, showing 19% growth
  

http://www.zensar.com/media/system/pdf/Investors/InvestorUpdates/Zensar_Investor%20_FY_2009-10_Final.pdf

Syntel (Nasdaq:SYNT) is a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) solutions spanning the entire lifecycle of business and information systems and processes. Syntel leverages dedicated Centers of Excellence, a flexible Global Delivery Model, and a strong track record of building collaborative client partnerships to create sustainable business advantage for Global 2000 organizations. Recently named one of the "50 Best Managed Global Outsourcing Vendors" by The Black Book of Outsourcing, Syntel is assessed at SEI CMMi Level 5, and is ISO 27001 and ISO 9001:2000 certified.

Business Highlights

• Q1 revenue of $116.0 million, up 20% from year-ago quarter and down one percent sequentially
• Q1 EPS of $0.60 per diluted share, down 8% from year-ago quarter and 30% sequentially
• Q1 cash & short term investments of $213.2 million
• Global Headcount of 13,682 as of March 31, 2010

First Quarter Financial Highlights

• Revenue increased by 20 percent to $116.0 million, compared to $96.4 million in the prior-year period
• Applications Outsourcing accounted for 75 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 16 percent, e-Business contributing six percent and TeamSourcing at three percent
• Gross margin was 42.4 percent in the first quarter, compared to 46.5 percent in the prior-year period and 50.2 percent in the fourth quarter of 2009
• Net income for the first quarter was $25.1 million or $0.60 per diluted share, compared to $27.3 million or $0.66 per diluted share in the prior-year period and net income of $35.8 million or $0.86 per diluted share in the fourth quarter of 2009

Operational Highlights

• Demand for offshore services continued to improve during the first quarter
• Revenue momentum in maintenance services was sustained during the quarter

Business Outlook

The Company is providing the following guidance in FY2010-11:

Based on current visibility levels and an exchange rate assumption of 44.5 rupees to the dollar, the Company expects 2010 revenue of $445 to $470 million, and EPS in the range of $2.20 to $2.50.

Rolta is an Indian multinational organization that has executed projects in over 40 countries by providing innovative solutions in Enterprise Geospatial Information Solutions (EGIS), Defense & Homeland Security; Enterprise Design & Operations Solutions (EDOS); and Enterprise Information Technology Solutions (EITS) and Engineering, Procurement and Construction Management (EPCM) services for power, oil, gas and petrochemical sectors. Rolta employs over 4500 professionals with international subsidiaries across the globe. Rolta is accredited with the prestigious BSI ISO/IEC 27001:2005 certification; the BSI ISO/IEC 20000-1:2005 IT Service Management Standard; and has been assessed at Maturity Level 5 of the Capability Maturity Model Integrated CMMI SW version 1.1. The Company is listed on the NSE in cash and F&O segment and forms part of CNX IT, NIFTY Midcap 50 and CNX 500 indices.

• Consolidated Revenue for Q3 FY-10 at Rs. 3945.6 Million against Rs.3755.6 Million in Q2 FY-10, registering a Q-o-Q growth of 5.1%
• Consolidated EBITDA for Q3 FY-10 at Rs. 1491.6 Million against Rs. 1422.7 Million in Q2 FY-10, registering a Q-o-Q growth of 4.8%
• Consolidated Net Profit for Q3 FY-10 at Rs.671.0 Million against Rs. 627.9 Million in Q2 FY-10, registering a Q-o-Q growth of 6.9%
• Consolidated Revenue for Q3 FY-10 at Rs. 3945.6 Million against Rs.3320.3 Million in Q3 FY-09, registering a Y-o-Y growth of 18.8%
• Consolidated EBITDA for Q3 FY-10 at Rs. 1491.6 Million against Rs. 1064.8 Million in Q3 FY-09, registering a Y-o-Y growth of 40.1%
• Consolidated Net Profit for Q3 FY-10 at Rs.671.0 Million against Rs. 491.3 Million, before exceptional item of Rs.840.1 Million in the previous year in Q3 FY-09, registering a Y-o-Y growth of 36.6%

HCL is a $5 billion leading global Technology and IT Enterprise that comprises two companies listed in India – HCL Technologies & HCL Infosystems. Its range of offerings spans Product Engineering, Custom & Package Applications, BPO, IT Infrastructure Services, IT Hardware, Systems Integration, and distribution of ICT products across a wide range of industry verticals. The HCL team comprises over 62,000 professionals, who operate from 26 countries including over 500 points of presence in India. HCL has global partnerships with several leading Fortune 1000 firms, including leading IT and Technology firms.

Financial Highlights – Consolidated results for the quarter ended March 31, 2010

• Quarterly Revenue at US$ 685 million; up 21.4% YoY & 5.1% sequentially
• Revenue on constant currency basis, up 16.2% YoY & 6.9% sequentially
• EBIT at US$ 111 million; up 19.9% YoY & 2.6% sequentially
• Net Income at US$ 77 million; up 78.1% YoY & 20.1% sequentially
• Announces dividend of Rs. 1 per share, 29th consecutive quarter of dividend payout
• Gross employee addition of 7,136 taking the headcount to 58,129 

IT Services Highlights for the Quarter

• Revenue at US$ 633.2 million; up 24.6% YoY & 6.6% sequentially
• Revenue on constant currency basis, up 19.4% YoY & 8.2% sequentially
• EBIT at US$ 115.8 million; up 33.8% YoY & 8.8% sequentially
• Margin expansion; 130bps YoY & 40bps sequentially
• Gross & Net employee addition of 5,730 & 3,152 respectively

Business Highlights

• HCL opened its regional headquarters for the Middle East operations in Dubai, UAE. HCL will offer services across a wide range of service lines including Product Engineering and R&D, Custom Applications, Enterprise Application Services, Infrastructure Management Services and BPO.
• HCL has opened a new Centre of Excellence in Chennai, India to provide engineering applications design, development and support for applications that the Boeing Test & Evaluation (BT&E) organization uses on various products.
• HCL has joined the Research in Motion ELITE program as a global systems integrator to offer large enterprise mobile solutions on blackberry platform to their combined user base across the globe.
• HCL has a suite of products under the brand “iGovern” which are focused towards Child Care, Workers’ Compensation, Fraud Investigation, Judicial Court and Vocational Rehabilitation.
• HCL has become an inaugural member of the Cisco Eos Partner Program to help Media and Entertainment companies enhance entertainment experiences built on the Cisco Eos™ social entertainment platform.

Tata Consultancy Services is an IT services, business solutions and outsourcing organization that offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development.

A part of the Tata Group, India’s largest industrial conglomerate, TCS has over 130,300 of the world's best trained IT consultants in 42 countries. The Company generated consolidated revenues of US $6 billion for fiscal year ended 31st March 2010 and is listed on the National Stock Exchange and Bombay Stock Exchange in India.

Business Highlights – Consolidated results for Financial Year 2009-10

• Revenue for the Financial Year 10 was $6.34 billion, up by 5.38% year-on-year
• Net profit surged by 29.01 percent to $1.45 billion. Net margins was up 429 basis points to 22.9%
• Volume growth at 17%
• Operating Profits stood at $1.68 billion, up by 18.02%; Operating margins was up 277 basis points (bps) sequentially at 26.5 %
• Net income after tax was $349 million; QOQ growth was 4.5%; YOY growth was 8.7%
• The net employee addition was 16,668, taking the total employee strength to 160,429

Shareholder Highlights

• FY10 EPS at $0.74

Business Highlights for Fourth Quarter 2009-10

•Q4 Revenues at $ 1,686 million – up 17.61% year-on-year and 3.07% quarter-on-quarter basis
•Volume Growth at 4.02%
•Operating Profits surged by 36.48 % to $ 464 million year-on-year and 3.8% quarter-on-quarter basis
•Net Profit surged by 59.69 % to $ 420 million year-on-year and 9.69% quarter-on-quarter basis
•Gross addition of 16,851 professionals in Q4; Net addition of 10,775 employees
•Attrition rate at 11.8 % on a LTM basis

Key Wins

• A European government agency awarded TCS a $500 M plus contract to be the administrator for their pension scheme. This full services deal leverages TCS portfolio of offerings across Financial Solutions, BPO, Remote Infrastructure Management, and IT Services
• In a multi-year deal worth over USD 100M, a leading global electronics conglomerate has chosen TCS as the strategic partner for end to end infrastructure services including business transformation
• World’s leading cruise operator has selected TCS as the IT partner of choice across the group
• A US based commercial insurance company selected TCS as its IT transformation partner to shift to a Managed Services operating model across all its IT operations
• A European headquartered, financial services company selected TCS as a Tier-1 partner to support its strategic objectives on ITO, Infrastructure, BPO, and KPO across their global locations
• TCS has signed a multi-million, multi-year deal with a global telecommunications provider for its European operations for managing their enterprise products in voice and data for their world-wide customer installed base
• TCS was awarded a multi year IT infrastructure management contract from a leading renewable energy company in Asia Pacific
• A leading global manufacturer of power systems has selected TCS to be their Engineering Services partner for product development and research services
• A leading retailer in North America has awarded TCS a multi-million dollar contract to streamline operations and drive efficiencies across its portfolio of applications