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Business News/ Companies / Digital space an opportunity to gain $3-5 billion revenue: TCS
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Digital space an opportunity to gain $3-5 billion revenue: TCS

The IT company plans to invest more in automation technology to drive more efficiencies across businesses

TCS CEO N. Chandrasekaran said uncertainty in Indian market due to upcoming general elections would slow revenue growth from the country for TCS. Photo: Abhijit Bhatlekar/MintPremium
TCS CEO N. Chandrasekaran said uncertainty in Indian market due to upcoming general elections would slow revenue growth from the country for TCS. Photo: Abhijit Bhatlekar/Mint

Mumbai: Tata Consultancy Services Ltd said on Wednesday that the digital space would give it an opportunity to gain $3-5 billion of revenues over the next few years and that the company plans to invest more in automation technology to drive more efficiencies across businesses.

TCS chief executive N. Chandrasekaran reiterated that the company would perform even better during the 2014-15 fiscal year, but said that uncertainty in the Indian market due to upcoming general elections would slow revenue growth from the country for TCS.

“It’s an election year, there will be delays in decision making, so it’s only prudent that you don’t expect too much growth. So we’ve said we expected muted growth from India," said Chandrasekaran.

TCS sees the digital space as a multi-billion dollar opportunity, Chandrasekaran said in an interview on the sidelines of the Nasscom India Leadership Forum 2014.

“Customers across the board are ramping up digital. We are seeing adoption of digital by every company, across every industry, in every market. The size of deals
is increasing from a few hundred thousand dollars to about a million dollars," said Chandrasekaran.

For the 2014-15 fiscal year, Nasscom has forecast a 13-15% revenue growth for software exports, its highest forecast in three years, as discretionary spending from top clients is expected to increase. For the domestic market, however, Nasscom predicted slower than expected growth due to uncertainty in decision-making in government projects because of the national election that’s due by May.

“On automation, we have invested in building software, tools and technology that can automate many of the areas that we are looking at. And we need to pilot that, we need to work with customers, so we will play in that space as well," said Chandrasekaran.

Automation is being widely regarded as one of the biggest disruptive forces in India’s $118-billion IT industry, which follows a pyramid model where revenue growth is linked to manpower addition and where traditional IT services are getting increasingly commoditized.

TCS, which employs well over 250,000 people and is fast marching towards the half-a-million employee mark, will continue with its strategy of focusing on the core bread-and-butter outsourcing business, where revenue growth is linked to manpower addition. TCS plans to recruit at least 55,000 employees in the 2014-15 fiscal year.

“There will be no artificial attempt to not do the current model. The current model has very strong traction and we need people and we need a lot of talent, but the skill sets will be different. So how do we invest in training, how do we recruit the right people—all those things have become very important. On the other hand we will be ready for the future," Chandrasekaran said.

Over the past five years, TCS has dominated the Indian IT services landscape, rapidly outpacing and grabbing market share from rivals such as Infosys Ltd and Wipro Ltd. The company has consistently outpaced average industry expectations over the years and is now increasingly being benchmarked by experts alongside global rivals such as International Business Machines Corp. (IBM) and Accenture Plc.

“I think TCS now is competing more with the global counterparts, but even the other Indian players have done well against global peers," said Partha Iyengar, research head for technology researcher Gartner Inc. in India.

“In the case of TCS, what they’ve done is that now there’s daylight between them and the other Indian players. In that sense, they are closer to the global players
than other Indian peers."

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Published: 13 Feb 2014, 12:01 AM IST
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