TCS looks to replicate UK success in the US
After seeing success for its products and platforms, especially for universal financial platform BANCS, Tata Consultancy Services (TCS) is working towards replicating the same in the US, its biggest market so far.
The Mumbai-based IT services major has won an anchor client for BANCS in the US, and is working towards pitching with the new clients once the project goes live. “We took a very successful platform from the UK and launched it in the US, closing a very large deal around it. The product needs to be localised before being rolled out and we are on target of doing that with some big milestones coming around January,” said Rajesh Gopinathan, CEO and MD of TCS. “We have done the journey in the UK and we know the path.”
In 2018, TCS had signed a multi-year agreement with Transamerica, a US-based insurance company, worth more than $2 billion in revenues. The deal marked its entry into a highly specialised insurance third party administration marketplace in the US to firmly establish BANCS in the geography. There is a series of launches over the next 12-24 months before the full book of about 10 million policies comes on the platform.
Outside of India, BANCS has done well for the company in Europe, particularly in the UK, with customers like Phoenix Group, Community Savings Bank Association (CSBA), and Scottish Windows to mention a few.
“The banking platform in the UK is also doing well for us. It is now in a utility model and is highly mature. We are in a position to on-board 750,000 to a million policies every quarter, which is giving us steady growth and nonlinearity,” said N Ganapathy Subramaniam, COO of TCS.
In Q2, the company’s portfolio of products and platforms performed well. Ignio, a cognitive automation software, had 10 new wins and eight go-lives. It is increasingly viewed as a critical component of any core customer transformation and thereby reduce business risk from outages, said the management.
According to analysts, TCS’ investments around products and platform as well as its aggressive patenting initiatives will be a key differentiator for the company. As of September 30, the company has applied for 4,874 patents, including 192 during Q2FY20. It has been granted with 1,121 patents, with most of it deployed for software products.
“We believe this (patents) forms a critical component of its products and platforms strategy and is visible from its industry leading Ebit margin picture despite its large size,” noted Girish Pai, head of research, Nirmal Bang. “For better visibility of trends in its core markets, the company has recast its vertical break-up of revenues by extracting out volatile, project-centric businesses such as India, West Asia, APAC ex-australia and products and platforms into a separate line item.” However the revenue contribution from these businesses is yet to be substantial.
TCS continues to remain bullish on the opportunities in the public sector space in India, even though the private sector remains a bit challenging, said Gopinathan.
“We have participated in various egovernance and digital India transformation projects which are doing well for us (in India). In the private sector, we all know what’s going on. We are downstream player, and if the investments dry up, then everyone in the food chain suffers,” he said.