The Hindu Business Line : Patni sees extended deal with Mercer

Patni has tied up with Mercer to set up a global operations centre in India. Mercer says it would invest about $50 million in India but not all of it would come to Patni.

The Executive Vice-President and Global Marketing Head of Patni Computer Systems, Mr Mrinal Sattawala, says the company will deploy 50 employees on the Mercer contract. Further discussing the outsourcing contract, he says, the two-year contract has potential for extension by two more years.

Excerpts from CNBC-TV18's exclusive interview:

Give us the specifics of this outsourcing contract. What kind of work will you do now?

We are going to support Mercer in terms of providing defined benefits, defined contribution operation services. We have already got 50 employees deployed for this and we are expecting this to ramp up quite significantly as Mercer grows its business on a global basis.

The deal has been signed for two years with a potential extension period for two more years. So it is a significant opportunity for us. It is good quality work.

What will the model look like?

At this point, it is a straight outsourcing contract. As I mentioned it is a two-year contract with a potential extension for two more years. We have built in some flexibility in the contract. As Mercer develops its long-term plans for India and sets up core operations of its own, some of the staff that we have deployed for its work can be transferred to Mercer. This is in order to leverage the knowledge base they are creating with us as a part of this relationship.

The long-term expectation is that Mercer will have core captive operations in India, but will continue to work with outsourcing partners and we certainly expect to be part of that portfolio for the long-term.

Give us a size of the deal because Mercer says it plans to invest $50 million over the next three years. How much of that is going to come to Patni?

It is not possible to put a specific figure at this point in time. I can give you an idea about the size and scale... by end May, we will have 50 employees deployed on the Mercer contract. The expectation, as Mr Jeff Miller from Mercer talked about, is that before the end of 2006, the centre will have close to 200 people and potentially next year, this may grow to 700-800 people.

Give us an idea of any other big deals you are expecting as you are in talks with companies.

Business development is a continuous process. So clearly, we have good opportunities both from existing as well as new customers.

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