For the second consecutive year of the Global Services 100 study, EPAM Systems, Inc. has emerged the winner in this category. Surprisingly, the first and second runners-up, IBA Group and LUXOFT, have also retained their earlier positions.

The main factor that differentiates EPAM, a software-engineering company, from competing service providers in Central and Eastern Europe is its strong delivery presence in the U.S.A. and EU. While most service providers have their sales and business development teams onshore, their delivery centers are offshore. EPAM, on the other hand, has over 70 people in the U.S.A., and over 200 people spread across U.K., Germany and Hungary to help with complex delivery projects.

The advantage of its onshore presence is that it gives EPAM access to its customers’ domain knowledge — something that is critical for the complex software-engineering projects that EPAM undertakes. For example, to develop British Telecom’s (BT) Global Services Customer Portal, EPAM’s teams in the U.K., Minsk and Budapest worked closely with BT’s staff in Manchester, London, and Virginia, U.S.A. The onshore teams provided the domain and business skills, while those in Budapest and Minsk provided development skills.

Says Andy Pennington, Senior Product Manager, BT Global Services, U.K., “It is comforting to have people onshore. I recommend anyone outsourcing development to have people onshore, particularly if the scope is unknown, or if the requirements are likely to change. Also, you don’t want to be on planes traveling hours.” The London Stock Exchange, another customer of EPAM’s, reflects the same sentiment. Says Marcus Taylor, Head, Business Management for Market Services, London Stock Exchange, “Onshore presence has been absolutely vital. In the U.K. we can speak to EPAM locally.” The three important criteria for the Exchange, while looking for a vendor to build an online portal that would allow U.K.-based companies to satisfy corporate social responsibility requirements were: delivery time, price and domain knowledge.

Says Taylor, “EPAM took some time to establish domain knowledge, but they were able to do so quickly through their local resources.” Reflecting on the Exchange’s satisfaction with EPAM, he says, “We work with a primary IT vendor for core services and with secondary vendors in certain areas. In the area where EPAM has provided services they have replaced the incumbent (secondary) provider. However, we continue to keep our options open.”

Akadiy Dobkin, CEO, EPAM Systems

BT has also experienced EPAM’s ability to respond quickly — in its case, to a change in the scope of the project. Says Pennington, “When the scope changed during the course of the project, we put pressure on EPAM to deliver early, and they did.” BT and the Exchange are just two of EPAM’s many satisfied customers.

EPAM’s success with customers is reflected in its growth. With revenues of $41million in 2005, to expected revenues of $60 million in 2006, it has been growing in the 20%–25% range. Till now EPAM has grown without any external capital, though now it is expecting venture-capital funding.