TCS Embarks On Restructuring With Digital Technology

by CXOtoday News Desk    Apr 20, 2017


To drive better growth with digital technologies, Indian technology major TCS has embarked upon the process of restructuring as traditional business units are moving at a slackening pace. TCS will be focusing on three core areas including Cloud, agile and automation.

“The three teams are shaping up so that we get organized and there is much more focus from a customer perspective; more direct connect between customer expectations and our promise to the customer — from the perspectives of delivery, engagement and outcomes,” BusinessLine quoted TCS’ recently appointed CFO V Ramakrishnan as saying.

TCS registered a moderate growth of just 8.6 percent for FY 2017, but digital revenues of the company grew 29 percent y-o-y which is in line with last year’s growth of about 30 percent.

“To go back 10-12 years, when enterprise solutions started, it started as a small group. As we grew, the individual offerings within that grew into businesses and we had leaders driving that and building the team. That is how digital will happen and this will only drive growth,” Ramarishnan said.

With slowing global economies and amidst uncertainties post Brexit, the year 2016-17 so far has been a tough year for the Indian IT companies. Their spending on digital technologies continued; however, as Indian IT service players lacked competence in the space, they lost the opportunity

TCS and Wipro faced a sharp drop in revenue growth in the first nine months of the year. Infosys witnessed a drop in dollar revenue from 10.9 per cent (year-on-year) in the June 2016 quarter to 5.9 per cent in the December 2016 quarter.

TCS’ revenue growth fell from 8.1 per cent in the first quarter to 5.8per cent in the third quarter. Digital deals garner better margin even they are not as big as the traditional outsourcing deals.

“Digital technologies have evolved over the past 3-4 years and are maturing. We believe in partnering with players who are working on niche parts of digital technologies, and our own abilities to internalise the technologies and train resources on a rapid, sustained manner. We don’t need to acquire companies to get that scale and technology.”