TCS plans revamp to hit $50 bn in sales

MUMBAI: Tata Consultancy Services plans to overhaul its organizational structure with specialized groups targeted to help startups as well as large global firms as Asia’s largest software outsourcing provider gears up to double its revenues to $50 billion before 2030, according to people familiar.

The Mumbai-based company will create four internal teams -a business transformation group, incubation group, enterprise growth and another aimed at new business models, according to people familiar who didn’t want to be identified as the details are private.

TCS is expected to present this proposed new structure at its board meeting this week, said one of the people.

The rejig is aimed at aligning TCS, India’s second-largest company by market value, with the changing needs of its clients who are increasingly looking to digitize in the post-Covid-19 world and the boom in startups.

India’s IT services sector has been on a roll, buoyed by the pandemic-induced rush among enterprises to transform into work-from-anywhere, digital businesses, boosting growth and making it a $227 billion industry by end of March.

A spokesperson for the company said TCS won’t comment on internal business plans or strategies.

TCS’s new structure is based on where its customers are in their business journey, the people said. It factors in, for instance, that a sub-$5 billion start-up would have a very different set of technology and business requirements than a large global corporation.

TCS, which employs over half-a-million around the world, the bulk of them in India, reported $25 billion in revenues for the year ended Dec. 31. Riding the sector boom, TCS and its rivals Infosys Ltd. and HCL Technologies have been signing on new customers, expanding contracts and hiring software programmers by the thousands every quarter.

The outsourcing giant, part of the Tata Group, is also planning to open a dozen innovation centers globally including the U.S. and Europe, according to one of the people familiar.

TCS, however, will need to manage its surging staff costs that partly led to the outsourcer missing analyst estimates on profit last quarter. The company provides a suite of services from cloud to data analytics and infrastructure management to world’s largest companies including Citigroup Inc., General Motors Co., Woolworths Group Ltd. and Petronas Gas Bhd.

THE REJIG IS AIMED AT ALIGNING TCS WITH THE CHANGING NEEDS OF ITS CLIENTS WHO ARE LOOKING TO DIGITIZE