Posts Tagged ‘TCS’

Infosys, Wipro, TCS caught in outsourcing price war

March 26th, 2015

Top software service exporters are under pressure to drop prices to retain contracts with marquee customers such as American Express and Home Depot that are up for renewal this year, according to executives and experts involved in the contract negotiations.Outsourcing17

Rates have fallen by double digits for some of the biggest customer accounts in the past six months, with companies such as Infosys and Wipro sacrificing profit margins to gain market share and incremental revenue from these key accounts, they said.

Retaining strategic outsourcing contracts — that generate at least $100 million annually — is crucial to top IT firms such as TCS, Infosys and Wipro.

“We’re definitely feeling the heat in some of our key accounts — and there’s no way we can afford to lose a top customer since gaining new logos to make up for the shortfall is not an option,” said a Wipro executive, who requested anonymity.

An executive at another top IT firm, also declining to be identified, said as traditional businesses have become commoditised, no company could afford to charge a premium.

“Top customers are more aware now of the changing dynamics in the market and are taking the opportunity to negotiate multi-million dollar contracts at lower prices,” this person said.

Experts tracking the contract negotiations said prices could drop further over the next 3-4 quarters.

“It’s become a dog-eat-dog business more than ever,” said Phil Fersht, chief executive of outsourcing advisory firm HfS Research. “There is a clear downward pressure on all IT services pricing. We estimate this is a 3% price decrease per FTE (full time equivalent) per deal, on average, over the last 6 months.”

TCS, Cognizant and Infosys declined to comment for the story.

Infosys, TCS and Wipro are increasingly automating commoditized businesses like infrastructure management to improve margins but are forced to pass on a majority of the benefits to key customers such as Bank of America and Citigroup.

“We are seeing big price movement, some of it betting on increased maturity of autonomics. TCS, Wipro and Infosys have all signaled their move away from (automation company) IPSoft and towards internally developed autonomics solutions. I assume that this will give them more pricing flexibility than they were getting with third-party software,” said Bill Huber, a former IBM executive and managing director at outsourcing advisory firm Alsbridge.

For Infosys and Wipro, which have lagged average industry growth rates over the past three to four years, gaining market share at the cost of margins seems to be their best option in the near term to revive double-digit growth rates.

Source:http://timesofindia.indiatimes.com/tech/it-services/Infosys-Wipro-TCS-caught-in-outsourcing-price-war/articleshow/46685546.cms

TCS features as Leader in Life Sciences IT Outsourcing in Europe

February 25th, 2015

Tata Consultancy Services (TCS) has been recognized as a Leader in Life Sciences IT Outsourcing (ITO) in Europe by leading advisory and research firm Everest Group. The Everest Group report ‘IT Outsourcing in European Life Sciences Industry – Service Provider Landscape with PEAK Matrix Assessment 2014’, acknowledged TCS for its engagements across key infrastructure and application towers, substantial revenue, strong growth in the Life Sciences ITO business and a balanced portfolio of deals across geographies.
Outsourcing2
The report also recognized TCS’ significant and ongoing investments in proprietary solutions and research.

TCS is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT, BPO, infrastructure, engineering and assurance services.

Source:http://money.livemint.com/news/sector/news/tcs-features-as-leader-in-life-sciences-it-outsourcing-in-europe-361388.aspx

TCS recognised as a leader in European banking and capital markets application outsourcing services

February 19th, 2015

Tata Consultancy Services (TCS), (BSE: 532540, NSE: TCS), one of the leading global IT services, consulting and business solutions organisations, on February 17 announced that it has been recognised as a leader in banking and capital markets application outsourcing services (AO) in Europe by one of the leading advisory and research firms Everest Group in two reports – Everest Group PEAK Matrix: European Banking IT Outsourcing Service Providers’ Assessment 2014 and Everest Group PEAK Matrix: European Capital Markets IT Outsourcing Service Providers’ Assessment 2014.Outsourcing52

TCS helps businesses operating in capital markets and banking industries optimise investments, enhance operational efficiencies, minimise risk and maintain competitive pricing. In both its banking and capital markets IT outsourcing reports, Everest Group praised TCS’ scale, scope and domain investments, which were recognised as a major contributor to the company’s success, according to Tata.

Jimit Arora, vice president, Everest Group, commented: “The European banking industry has seen a strong return in discretionary spending in areas such as application development for customer centricity, digital technologies, and regulatory compliance. Demand for IT outsourcing grew within capital markets in Europe as firms leveraged technology for regulatory compliance, to cut costs and drive efficiency.TCS’ Leader position reflects its comprehensive offering and ability to deliver effectively for clients.”

Susheel Vasudevan, head banking and financial services, TCS, commented: “It feels special to be once again recognised as a leader in european banking and capital markets application outsourcing services by Everest Group. This recognition highlights the strong market success and continued domain investments we have made in the financial services industry. We work closely with our financial services customers, helping them to drive efficiencies and embrace the changes required in this new digital era.”

The Everest Group evaluated 20 vendors for its banking IT outsourcing report and 18 for its capital markets IT outsourcing report. The vendors were mapped against Everest Group’s Performance, Experience, Ability, Knowledge (PEAK) Matrix, which is a composite index of several distinct metrics related to a provider’s capabilities and market success. Service providers are then split into three categories: Leaders, Major Contenders and Emerging Players. The Everest Group also profiled the capabilities of these leading service providers in detail, giving a comprehensive overview of their service scope, scale of operations, domain investments, delivery footprints and market success.

Source:http://www.finchannel.com/index.php/business/item/40216-tcs-recognised-as-a-leader-in-european-banking-and-capital-markets-application-outsourcing-services

Why IT Honchos are Queuing up to Meet Barack Obama

January 27th, 2015

The US is the biggest market for India’s over $100-billion outsourcing industry and it also contributes to the creation of lakhs of jobs in the IT sector. Unsurprisingly, the delegation of Indian CEOs meeting US President Barack Obama is packed with IT honchos. Infosys founder NR Narayana Murthy, current CEO Vishal Sikka, M&M chief Anand Mahindra, who is also the chairman of Tech Mahindra, and Cyrus Mistry, who as head of Tata Sons is also the chairman of India’s biggest outsourcer TCS, are all representing India Inc at the meeting with President Obama on Monday.Outsourcing57

Here’s why the IT industry is key to Indo-US trade:

1) The IT industry is estimated to contribute nearly 25 per cent to total domestic exports (merchandise plus services).

2) Indian firms get a lot of business from US, while American companies benefit from lower costs in the country; they also gain access to extensive intellectual capital, which enables them to concentrate on their core competencies.

3) Initially, Indian IT firms provided low-cost technical support and fixed software bugs, but now they optimise financial transactions and develop advance technologies. So, companies are moving up the value chain.

4) Indian firms are increasingly expanding their presence in the US by setting up onshore businesses. Most of the leading Indian IT companies have set up their sales and marketing offices and delivery operations in various US cities.

5) Till 2010-11, Indian IT-BPO sector supported 2.80 lakh jobs in the US, according to Nasscom. Over the last few years, the trend has picked up. Infosys hired 2,000 employees in Wisconsin in 2012; TCS hired 1600 in 2013-14 and plans to add another 2,000 in 2014-15.

6) The IT industry leads in total merger and acquisitions with US companies. Between October 2012 and December 2014, the IT sector led the M&A pack with 29 out of 71 total outbound acquisitions in the US, according to a study by EY on behalf of industry body Ficci.

7) US is likely to continue to be the favourite destination for Indian IT-BPO players because of large scale reforms in the healthcare segment (being undertaken by the US government) and Big Data and automation wave is luring tech companies.

8) According to a study by Egon Zehnder, in 2011 S&P 500 companies had more Indian CEOs than of any other nationality except American. Shantanu Narayen (CEO, Adobe Systems) and Satya Nadella (CEO, Microsoft) are some of the leaders heading global US tech firms.

9) People of Indian origin dominate US-based tech-start-ups funded by immigrants. According to an EY-Ficci study, India-born entrepreneurs represented 33 per cent of such companies.

10) A significant number of workforce in tech companies such as Google and Microsoft are of Indian origin. Sundar Pichai is leading Google’s Android, Chrome and Google app divisions; Amit Singhal is heading Google’s core ranking team and Krishna Bharat is leading Google’s news product team.

Source:http://profit.ndtv.com/news/corporates/article-why-us-is-important-for-indias-it-industry-733916

TCS profits rise on US, European demand

January 16th, 2015

India’s biggest outsourcing firm Tata Consultancy Services has reported a 5.1 per cent rise in quarterly net profits, driven by demand in its key markets of the United States and Europe.???????????????????????????????

The firm, commonly known as TCS, inked seven major agreements in the final quarter of 2014 and has ‘a strong pipeline of deals,’ said chief executive N Chandrasekaran.

Net profit for the three months to December 31 rose to 54.44 billion rupees ($A1.07 billion), from 51.80 billion rupees a year earlier, the firm said.

That missed the 54.8 billion-rupee median forecast from 37 analysts surveyed by Bloomberg.

The IT giant’s revenues also rose to 245.01 billion rupees in the October-December quarter, against 212.94 billion rupees a year ago.

Revenues were hit by ‘sharp cross-currency movements,’ according to chief financial officer Rajesh Gopinathan, who added that margins were maintained through ‘discipline and rigour’.

India has become a back office to the world as companies have sought to cut costs by outsourcing some functions to its industrious, English-speaking population.

But the sector has been hit by hard times as some US and Britain-based clients were reluctant to fix new budgets for IT-related services in the face of weaker growth.

That trend now seems to be reversing, with TCS’s main rival Infosys last week reporting a better-than-expected 13 per cent jump in third-quarter net profit.

TCS’s Chandrasekaran on Thursday also dismissed speculation the company is planning large-scale layoffs.

‘TCS is in high growth mode and there is no truth in the rumours of layoffs,’ he said.

In fact, the company ‘was likely to hire more’ than the 55,000 people it had announced earlier, he added.

In the just-ended quarter, the IT giant added 16,561 people to its workforce, taking its employee base to 318,625.

Source:http://www.skynews.com.au/business/business/world/2015/01/16/tcs-profits-rise-on-us–european-demand.html

Indian IT staff could unionise, putting offshore model into question

January 8th, 2015

Trade union organisations in India are calling on millions of Indian IT workers to unionise as fears over mass redundancies spread across the country’s IT services industry.Outsourcing39

Talk of Tata Consultancy Services (TCS), India’s biggest IT services provider, reducing its workforce of more than 300,000 by 10% has fueled fears in India’s IT sector.

It’s also been speculated IBM is planning to cut its workforce in the country by 50,000. According to a report from India, the IT giant has already reduced its India-based workforce from about 165,000 in 2011 to 113,000 in 2014.

According to the International Business Times, the All India Trade Union Congress and the Centre of Indian Trade Unions has asked software engineers to plan a strategy to resist the alleged workforce cut planned by India’s largest software services firm. This collective activity would amount to unionisation.

Unionisation a major shift in Indian IT

Unionisation would be a major shift in the industry as Indian IT workers are not actually allowed to unionise. It would also make offshore services delivered from the country less competitive as staff demand higher pay and better working conditions.

Staff cuts in India are inevitable as the outsourcing sector goes through a period of major change. The traditional offshore model, where businesses paid for full-time equivalents, is less relevant today with the advent of modern technology, such as automation software and cloud services.

IT services firms traditionally grew in a linear way – typically, they win more business, then add more staff to support it. In many cases this has involved building large offshore workforces.

But service providers are now trying to reach the holy grail of non-linear growth. This means adding business without needing to add to the workforce to support it – reducing the proportional increase in the cost of providing an additional service.

At the same time, increased use of cloud-based IT is forcing IT services firms to add more higher-level support services, while the move to platform-based services in the cloud means there is less need for businesses to develop their own software.

The lack of labour rights in India also benefits businesses that want a flexible workforce that can be scaled up and down easily.

Massive consquences for offshore IT services
One IT outsourcing industry source said unionisation will have massive ramifications on offshore IT services.

“This will mean less flexibility,” he said. “Offshore IT operations will no longer be able to be ramped up and scaled down easily because it will no longer be easy to lay people off.”

He added if talk of TCS laying off 30,000 people in India is true, it will be evidence of the company’s move towards non-linear business models.

“Because TCS is a bellwether this could spread across the Indian IT industry,” he said.

Indian companies need to change if they are to continue to grow. According to ISG, between 2005 and 2008, Indian suppliers’ revenues grew at a combined annual growth rate of 32%.

But the recession, which began in 2008, has been a shot across the bows. In the years since, Indian firms have experienced half the growth rate, at 16%.

Source:http://www.computerweekly.com/news/2240237667/Millions-of-Indian-IT-staff-could-unionise-putting-low-cost-offshore-model-in-question

Wipro spending $200 million on building next generation platforms

December 16th, 2014

Wipro is spending more than $200 million annually on building next generation platforms that focus on disruptive technologies including cognitive technologies, automation and machine-to-machine learning as the country’s third-largest software firm seeks to edge out competition in winning large deals. Outsourcing10

Over the past two years, the company has ploughed $400 million in developing about ten intelligent solutions, some of which it has started using internally and a few it is using for customers, said a senior executive. “Wipro has significantly stepped up its funding of the R&D projects in the last couple of years,” said chief technology officer RK Sanjiv.

“This is to not just ensure that we become the next generation services firm of future, but also to be future-ready for our customers,” said Sanjiv, declining to put a number. But he said the company invests more than the industry average in these initiatives.

This focus on building intelligent platforms coincides with the stint of Rishad Premji, son of chairman Azim Premji, as head of strategy, making some believe the younger Premji could be potentially driving this change at the Bengaluru based company.

Incidentally, it was Azim Premji who brought Tata Consultancy Services veteran Satishchandra Doreswamy, now chief business operations officer at Wipro, in 2011 to help transform the company by putting together a team of engineers to focus on these technological platforms. Wipro’s thrust on building internal intellectual property-led platforms comes at a time when cross-town rival Infosys, under new chief executive Vishal Sikka, too is aggressively talking about building platforms.

Homegrown technology companies invest on an average 2-3% of revenue on building platforms. Wipro’s revenue for the fiscal through March 2014 was $6.7 billion, and if it invests more than the industry average, it is putting in $200 million every year in new solutions.

Wipro is now a team of “hundreds of engineers and research scien tists”, according to Sanjiv. His mandate is to focus on three key themes: cognitive technology, machine-to-machine learning and in building smart devices.

According to some experts, information technology companies are investing internally in building these solutions because of the desire to win large outsourcing deals as every customer is looking to its IT vendor to bring in more valuegeneration business rather than merely maintaining the back-end technology infrastructure.

Doreswamy last month told ET that Wipro’s energy and utilities vertical managed to bag its $1.2 billion, 10-year outsourcing deal with Canadian utilities firm ATCO on account of the “transformational benefits” it could help offer.

“(Two other) examples of Wipro’s solutions are Base and Fixomatic suite of tools,” said Tom Reuner of London-based IT research firm Ovum. “The direction of this journey is to protect margins by automating low-level tasks while hiring and retaining talent for value-creating activities.”

Reuner and other experts said the focus of software exporters on intelligent solutions is also driven by their desire to increase revenue without increasing headcount.

In September, ET reported about Wipro’s plans to start with its most ambitious reorganization exercise, under which it aims to become a leaner 1,00,000-strong company from the current levels of 1,52,000 in three years.

The company plans to do this without resorting to mass layoffs but by “selectively filling” in roles of executives who leave.

As Wipro seeks to embrace automation and artificial intelligence, the company can do away with engineers who are currently doing basic-level repetitive work. Already, Wipro has started using, internally, a cognitive platform for its help desk system, thereby simplifying work process for employees. One other intelligent technology platform which the company has started work on for its retail clients is “Wipro Sight.”

Source:http://timesofindia.indiatimes.com/tech/tech-news/Wipro-spending-200-million-on-building-next-generation-platforms/articleshow/45523422.cms

Protected by تهنئة
Get Adobe Flash player