TCS re­aligns con­sul­tancy prac­tice, re­vamps en­ergy, tele­com units

The Pak Banker - - COMPANIES/BOSS -

Tata Con­sul­tancy Ser­vices Ltd (TCS) has un­der­taken a man­age­ment change at two of its cus­tomer-fac­ing in­dus­try unit­st­ele­coms and oil and gas-and brought its con­sul­tancy arm to work with the team that im­ple­ments busi­ness soft­ware such as SAP and Or­a­cle for clients.

The changes, the first since the Mum­bai-based firm named new busi­ness divi­sion heads in March 2015, do not al­ter the di­rect re­port­ing struc­ture to chief ex­ec­u­tive of­fi­cer N. Chan­drasekaran. Com­pany ex­ec­u­tives be­lieve that the changes should re­vive growth at the coun­try's largest soft­ware firm, which has grap­pled with slow growth over the last 18 months.

TCS needs to record a 5.25% se­quen­tial rev­enue growth in the cur­rent quar­ter to end the fis­cal year with an 8% growth in dol­lar terms, lower than the 15% growth it recorded last year, and the slow­est an­nual rev­enue growth since 2009, when Chan­drasekaran took charge as chief ex­ec­u­tive. TCS has ap­pointed Carol Wil­son, for­merly a se­nior vice-pres­i­dent at TSys­tems (a sub­sidiary of Ger­many's largest tele­coms group, Deutsche Telekom), to head its tele­coms busi­ness in Europe. Wil­son will re­port to the com­pany's global head of tele­coms busi­ness, Ka­mal Bhadada, who re­ports to Chan­drasekaran.

The com­pany also moved TCS's global head of en­ergy and re­sources busi­ness unit, Jayanta Ban­er­jee, to work in the plan­ning and sales strat­egy divi­sion, and the oil and gas unit will be di­rectly over­seen by Debashis Ghosh, pres­i­dent of man­u­fac­tur­ing, life sci­ences and en­ergy busi­ness. "The tele­coms busi­ness glob­ally is get­ting im­pacted by OTT (over-the-top firms such as Skype and Google). Tele­com firms are cut­ting down spend on tra­di­tional out­sourc­ing. A per­son like Carol helps us to in­crease our busi­ness with tele­com firms by of­fer­ing so­lu­tions in In­ter­net of Things (IoT) and cloud com­put­ing," said an ex­ec­u­tive fa­mil­iar with the de­vel­op­ment.

TCS de­clined to com­ment, with a spokes­woman say­ing: "We do not com­ment on our in­ter­nal struc­ture; hence, do not want to par­tic­i­pate in this story." An email sent to T-Sys­tems and Wil­son on Fri­day seek­ing com­ment went unan­swered. TCS's con­sul­tancy prac­tice, which has close to 3,000 con­sul­tants, has started to work with what the com­pany calls the en­ter­prise so­lu­tions divi­sion, and the Oc­to­ber-De­cem­ber pe­riod saw TCS re­port­ing its per­for­mance in en­ter­prise so­lu­tions along with the con­sul­tancy prac­tice.

TCS's move to re­align its con­sul­tancy prac­tice mir­rors the ap­proach fol­lowed by its two smaller Ben­galuru-based com­pa­nies, In­fosys Ltd and Wipro Ltd, as both com­pa­nies have brought its con­sul­tants to work with en­gi­neers. Home­grown soft­ware firms are look­ing to lev­er­age their con­sult­ing units, some­thing which Nas­daq-listed Cog­nizant Tech­nol­ogy So­lu­tions Corp. claims to have per­fected, in or­der to win big­ger or­ders from clients who want to im­prove the way they have done busi­ness un­til now.

"We are in a mas­sive tran­si­tion," said Ray Wang, founder and chief ex­ec­u­tive of Con­stel­la­tion Re­search, a tech­nol­ogy ad­vi­sory firm. "All the sys­tem in­te­gra­tors are seek­ing growth and are will­ing to shake things up with proven lead­ers from out­side of their firms to do this. We will see a bit more of this. Hav­ing a con­sul­tancy arm in play is key to hav­ing higher value deals and bet­ter en­gage­ment with the C-suite (se­nior ex­ec­u­tives such as chief in­for­ma­tion of­fi­cer or chief mar­ket­ing of­fi­cer)."

To be sure, do­mes­tic soft­ware firms have been hit as their largest clients in oil and gas space, like BP Plc. and Exxon Mo­bil Corp, have put on hold new tech­nol­ogy spend on ac­count of volatil­ity in crude prices. Wipro, which gen­er­ated 14% of its $5.46 bil­lion rev­enue in the nine months ended De­cem­ber 2015 from oil firms, has been the worst hit. How­ever, a big­ger prob­lem for TCS has been that firms such as BP are work­ing with fewer tech­nol­ogy ven­dors in or­der to save cost and TCS has lost out to Wipro in this wave of ven­dor con­sol­i­da­tion at some oil and gas com­pa­nies.

TCS's en­ergy and tele­coms ver­ti­cals, which to­gether ac­count for 12.5% of com­pany's $15.5 bil­lion in rev­enues, have done poorly over the last 18 months even as the com­pany's growth it­self has slowed. At the end of July-Septem­ber 2014, which was the first quar­ter when TCS's growth slowed, the com­pany recorded $3.9 bil­lion in rev­enue.

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