The CEO and the UK and Ireland vice-president and head of banking and financial services, respectively, of Tata Consultancy Services discuss the company’s global strategy. Neil Tyler reports.
One company that is well positioned to take advantage of the intensely competitive landscape in the outsourcing marketplace is Tata Consultancy Services (TCS). Recently described by Forrester Research Inc, an independent research firm, as a leader in global IT infrastructure outsourcing and as providing “an enticing vision for infrastructure clients that builds on transparency and extends through to true business goals”, it is one of the world’s leading information technology companies.
Established more than 30 years ago it has become a global company with a workforce of over 90,000 professionals in more than 50 delivery centres. It has clients scattered around the world and can list seven of the top ten corporations on the Fortune 500 list as being among its top customers.
In the quarter ended March 31, 2007 total revenues rose by 8% quarter-on-quarter and new profits were up 9%, at $270m. Tata added 43 new clients in the last quarter alone. So to what does it attribute its ongoing success in such a highly competitive market?
According to S Ramadorai, CEO and managing director: “Tata is all about delivering excellence and meeting customer expectations. We have seen enormous progress over the past few years. We’re known for innovation and we have seen our revenues double every two years, and that success can be attributed to a robust business model. We have used our full-services play and Global Network Delivery Model to capitalise on strong global demand.”
In 2006/07, high-growth lines such as infrastructure, consulting, business intelligence and assurance services grew by more than 100% and now account for 18% of revenues. “Overall, our performance has exceeded market expectations,” says Mr Ramadorai. “In 2006, our revenues totalled $4.3bn, and our emerging high-growth services are giving the company a diversified customer base across markets and verticals. We have attracted more than 200 new customers in the past year and increased our global footprint in Latin America, Europe and the US. We’re providing integrated solutions to industries as diverse as banking and financial services, energy and utilities, public sector, manufacturing, healthcare and life sciences.”
Of Tata’s 12 deals of more than $50m that were closed in the last fiscal year, five involved customers using more than one of TCS’s service offerings.
Mr Ramadorai was speaking just before the announcement that TCS would be opening a new software development centre in Guadalajara, Mexico, with plans to hire up to 5000 employees. In what will be a first for an Indian information technology firm in Mexico, the new centre is a major part of the company’s global strategy to improve its Global Network Delivery Model.
The firm has grown its global infrastructure delivery model in recent years, extending its operations to markets as diverse as Russia, Brazil and Uruguay. Mr Ramadorai says: “We are looking to become a top 10 player by 2010. That’s why we are developing and deploying our global delivery model. Our aim is to move up the value chain and to run larger projects for entire organisations that include IT support and maintenance.”
Delivery promise
‘Deliver what you promise and promise what you can deliver’ is at the heart of the company’s strategy, and since it was set up in the 1960s, TCS has invested in technologies, processes and people, keeping clients up to date with technology and business innovations.
“For us, the key differentiator with our clients is our approach,” says Sunil Chopra, the recently appointed vice-president and head, UK and Ireland, banking and financial services at TCS. “It is an approach built on integrity and trust. And, while profits are obviously important, it is vital that we value the needs of our customers, and our customers, especially those in Europe, value that commitment. While it is about using the best technologies, processes and competencies, and helping businesses to put into practice their strategies, it is also about building long-term relationships based on trust and transparency.”
Within the European market, financial services account for more than 40% of TCS business. “Europe and banking are key markets for us,” says Mr Chopra. “The changing regulatory environment will offer banks a great opportunity to differentiate from their competitors and to enhance the customer experience. While we don’t see any appetite for big $500m investments, there will be a period of incremental investment in new technologies.”
Mr Chopra continues: “IT projects and outsourcing are changing. Today it is about providing both the right solutions and helping to deliver the long-term revenue generation support required by all companies.” With repeat business in excess of 90% that approach seems to be paying dividends.
CAREER HISTORY
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S Ramadorai is chief executive officer, Tata Consultancy Services. He has played an integral role in building TCS into India’s first $1bn IT services organisation in annual revenues.He has been designated as IT adviser to Qingdao city and Hangzhou city in the People’s Republic of China. |
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Sunil Chopra is vice-president and head, UK and Ireland, banking and financial services, Tata Consultancy Services. He has responsibility for developing and executing strategic initiatives in alliance with banking industry leaders, regulators and partners. He has more than 20 years’ experience in investment, corporate and retail banking, and prior to joining TCS, was regional head Corporate & Institutional Bank of Standard Chartered in India. |
