Tech Mahindra plans to boost revenue from digital technologies

Tech Mahindra expects to generate up to half of total revenue from technologies such as data analytics and automation by 2020

Tech Mahindra chief strategy and marketing officer Jagdish Mitra. Photo: Ramesh Pathania/Mint
Tech Mahindra chief strategy and marketing officer Jagdish Mitra. Photo: Ramesh Pathania/Mint

Tech Mahindra Ltd expects to generate 40-50% of total revenue from digital technologies such as data analytics, automation and the Internet of Things by 2020, said chief strategy and marketing officer Jagdish Mitra.

Tech Mahindra reported a 0.9% sequential rise in dollar revenue in the April-June period, which beat analysts’ estimates but was nonetheless the slowest start by India’s fifth largest software services exporter.

Technology companies in India have been investing in digital technologies such as cloud computing and mobility platforms and also reskilling workforces, but the earnings performances reflect the fact that the revenue from these businesses has not been able to make up for the slowdown in traditional IT businesses.

Digital technologies such as Internet of Things-based market is set to grow to $15 billion by 2020 from the current $5.6 billion, according to a report by the National Association of Software and Services Companies, or Nasscom, released on 5 October.

Tech Mahindra is also moving towards automation or robotics technology and expects 15-20% of its workforce to be impacted by automation in 2017.

“I am expecting between 15-20% impact on those processes that can be applied with automation,” said Mitra.

“In certain place for example a lot of work that we do in our BSG (business services group), which is basically for us our BPO and business process group, will have a larger impact of automation. There is a lot of repetitive tasks that you follow here and with artificial intelligence as well as cognitive skills, you can bring in a significant amount of automation,” he added.

India’s IT services industry will lose 640,000 “low-skilled” jobs to automation in the next five years, US-based research firm HfS Research said in a report released on 5 July.

Though “low-skilled” jobs will fall by 30%, “medium-skilled” jobs will increase by 8% and high-skilled jobs will rise by 56%, the report said.

“As life goes on, it will not stop at the 15-20%, every year there will be more incremental advantages,” Mitra added.

While automation will affect the processes, none of the jobs will go out of the company, he said.

“We will need them for other features of work that will come into play, which is more about analysing, analytics and cognitive type of work,” he said.