TCS diversifying client base, pursuing new biz model

TCS diversifying client base, pursuing new biz model London: India's largest software services exporter Tata Consultancy Services is aiming to move beyond its traditional Western market to serve new transnational companies in the emerging markets to become a truly global company.

"We want to become global not just in terms of sales but from a people perspective," TCS head Natarajan Chandrasekaran told the Financial Times in an interview.

Multinationals in emerging markets now account for about one-fifth of the company's sales. TCS has operations in about 42 countries and about nine per cent of its workforce is foreign. At present it contributes nearly 10 per cent of the revenue of the Tata conglomerate.

Besides diversifying its client base, TCS is pursuing an "integrated full service" business model to garner higher revenue.

Under this model, TCS would design, develop and manage a given client's software as well as maintain its hardware systems and handle its business processes.

After years of double-digit - sometimes even triple-digit - growth, India' outsourcing companies got battered pursuant to the global economic slowdown as their largest clients, the global financial services groups, faltered under the pressure.

Accordingly, TCS' Chandrasekaran told FT that the company has to restore growth first as the past six quarters were challenging as revenue grew just seven per cent for the year ended March, down more than 30 per cent previously.

However, Chandrasekaran was optimistic about a recovery and said that whether the global recovery is "V-shaped, W-shaped or 'square root'-shaped", clients will look to the offshore outsourcing industry to cut costs.

The Indian Information Technology industry including -- TCS and its peers such as Infosys Technologies and Wipro -- played a major part in "the country's transformation from ox-cart economy to fast-growing, sophisticated Asian giant."

The IT industry generated USD 47 billion in exports in the fiscal year ending in March and claims it has created nearly half of India's urban jobs directly and indirectly.

Bureau Report