TCS wins $690 million outsourcing contract from M&G Prudential
Tata Consultancy Services (TCS) will use its insurance platform, BaNCS and Diligenta to largely do away with human interventions in completing many of the back-end claims processes of M&G Prudential
Bengaluru: At Tata Consultancy Services Ltd (TCS), it is raining deals. India’s largest information technology outsourcing company said on Tuesday that it had won a $690-million, 10-year contract from a unit of British insurer Prudential.
The latest order is the third large outsourcing contract won by TCS in less than a month. It won two more than $2 billion, multi-year outsourcing contracts from television ratings measurement firm Nielsen and Transamerica Life Insurance Co., a unit of Dutch insurer Aegon NV, in December and earlier this month, respectively.
TCS will use its insurance platform, BaNCS and Diligenta, the UK-based subsidiary of the company, to largely do away with human interventions in completing many of the back-end claims processes of M&G Prudential, the European savings and investments business of Prudential.
TCS won the outsourcing contract from Prudential over British IT outsourcing firm Capita Plc, which was earlier hired by the British insurance giant.
TCS does not outline any quarterly or yearly growth outlook but 1% sequential growth in the March quarter will help it end the current year with $18.95 billion in revenue, a 7.8% dollar revenue increase in 2017-18.
This means TCS will need to improve on its current year’s growth by 220 basis points to achieve at least 10% dollar revenue growth in 2018-19. One basis point is one-hundredth of a percentage point.
The latest deal brings $69 million in new business, or 37 basis points incremental growth, for TCS.
The company stands to make over $200 million in new business or more than 110 basis points in incremental growth from the contract with Transamerica.
Additional deal wins from a unit of Lloyds Banking Group, Rolls Royce Group, and Marks and Spencer is expected to bring more than $100 million in new business or over 60 basis points incremental growth in the next fiscal, according to Mint’s calculations, together bringing over 200 basis points in incremental growth.
Understandably, TCS’s management is confident of a double-digit growth in the next fiscal.
“I believe we should have double digit growth in FY19,” TCS’s chief operating officer N. Ganapathy Subramaniam had said in an interview last week, adding that this should not be interpreted as the company’s guidance as TCS does not give any quarterly or yearly growth outlook.
“This partnership with TCS is an essential element of our strategy to create a digitally enabled business. Our customers will receive a better service—day in, day out—as a result and our colleagues will be better equipped to provide that service more efficiently,” John Foley, chief executive of M&G Prudential, said in a statement.
“TCS is delighted to be the digital transformation partner for M&G Prudential to enhance service for its UK savings and retirement customers and drive sustainable growth. We will propel this digital transformation through TCS’s continuous investments in digital and technology services,” Rajesh Gopinathan, chief executive of TCS, said in the statement.