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COVANSYS COMPLETES THE SALE AND TRANSFER OF
PEOPLESOFT DEVELOPMENT CENTER
Company to Pursue Additional Build-Operate-Transfer
Contracts
FARMINGTON HILLS, MI, November 10, 2005 – Covansys
Corporation
(NASDAQ: CVNS), a global consulting and technology services company,
today confirmed that it has completed the sale and transfer of
its PeopleSoft development center to Oracle Corporation (NASDAQ:
ORCL). As previously announced on May 3, 2005, Oracle exercised
a purchase option to acquire this facility in Bangalore, India.
Raj Vattikuti, Covansys president and chief executive officer,
said, “We are proud to have accomplished what we believe
is one of the first ever transfer of a development center as part
of a build-operate-transfer (BOT) contract. These contracts, like
our agreement with Oracle, offer Covansys a unique opportunity
to gain market share and deepen client relationships. We look forward
to building on the success of our relationship with Oracle to offer
this unique service to both new clients and our existing client
base.”
BOT contracts allow Covansys’ clients to move work offshore
to reduce costs, decrease development time, and increase flexibility.
These types of contracts reduce client risks and upfront investment
requirements associated with setting up their own offshore center,
while providing the dedicated resources needed for mission-critical
work.
Mr. Vattikuti continued, “Many commercial and software businesses
strive to balance the strategic and tactical value of leveraging
a global workforce for technology expertise. The opportunity these
companies have by partnering with an experienced company, such
as Covansys, to open a captive offshore development center through
a BOT contract, offers all the rewards associated with offshore
outsourcing, while alleviating the associated risks.”
Industry analysts agree that BOT contracts represent an accelerating
trend in the offshore outsourcing industry, benefiting both clients
and IT solutions providers like Covansys. Barry Mason Rubenstein,
senior analyst for Application Outsourcing and Offshore services
at IDC stated, “BOT transfers can be a win-win situation
for both client and service provider, with the client acquiring
an operation that meets previously agreed-upon quality and service
levels and the service provider gaining valuable product expertise
that it can later use for other clients. As the use of global sourcing
increasingly becomes a requirement for software companies to remain
competitive, and as examples of successful engagements like Covansys
and Oracle emerge, the BOT model should continue to increase in
popularity as a valuable, lower-risk alternative to opening a captive
offshore center."
About Covansys
Headquartered in Michigan, Covansys Corporation (Nasdaq: CVNS)
is a global consulting and technology services company specializing
in industry-specific solutions, strategic outsourcing and integration
services. Clients gain competitive advantage by leveraging our
unique global delivery capability to achieve rapid deployment,
world-class quality and reduced costs. Covansys is known for strategic
outsourcing and technology solutions in the healthcare, financial
services, retail and distribution, manufacturing, telecommunications
and high-tech industries. Founded in 1985, with 7,000 consultants
and employees worldwide, Covansys was one of the first U.S.-based
IT services companies to establish offshore facilities in India,
and is a pioneer in seamlessly integrating offshore capabilities
into its offerings. Two of the company's three wholly owned development
centers in India are assessed at Level 5 in SEI CMM(R). All three
are ISO 9001:2000 certified and assessed at Level 5 in PCMM(R),
and five global facilities are BS7799-2:2002 certified. Visit our
Web site: www.covansys.com.
AT THE COMPANY:
Investors:
James Trouba
(248) 848-2267
jtrouba@covansys.com
Media:
Michelle Jones
(248)
848-2269
mjones@covansys.com
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