TCS forays into US govt space

To focus on state, local governments; already working with Mississippi state

After tasting fair amount of success in India and a few other emerging countries, Tata Consulting Services (TCS), India’s leading information technology (IT) services company, is foraying into the government vertical in the US.

Initially, the company is focusing on states and local governments in the US, as working with the federal government requires it to fulfil stringent conditions. Among US states, TCS has already started working with the Mississippi government and is in the process of bagging a contract from another state, an announcement on which is expected soon.

“We are mostly focusing on state and local governments and we are finding a lot of traction in the unemployment insurance and city taxation areas because of our expertise in working on tax automation with a number of states in India,” Tanmay Chakrabarty, vice-president & global head (government industry solutions unit, TCS, told Business Standard.

He said the company had already made inroads into the city taxation space in the US, through which cities collect taxes on behalf of the federal, state and local governments. The company is implementing tax automation systems in seven cities across the US.

TCS has wide experience in automating tax collection in India — it automated value-added tax collection in 13 states. Subsequently, it also worked with a few countries in east Africa, including Uganda, Zambia and Kenya, in automating their taxation systems.

For TCS, the government business unit is one of the fastest growing areas, growing 35-40 per cent a year. Chakrabarty said though the business unit was a single-digit contributor to the company’s overall revenues, “our target is to make it a double-digit revenue contributor in the next three years”.

For the year ended March, TCS reported revenues of Rs 62,989 crore ($11.6 billion).

Industry experts say so far, TCS is the most successful company in the government vertical in India, compared to other Indian or global IT services companies. Despite the belief that government business wasn’t substantially profitable, TCS made early investments in developing specific solutions and frameworks to address issues involving governance. Now, the company is trying to replicate its success in this segment in a few emerging countries in the east Africa and Latin America, as well as developed markets such as the US and the UK.

Recently, the company had bagged a core system integrator contract from the Department of Posts, tipped as one of the most prestigious e-governance contracts in the country. The contract was valued at about Rs 1,100 crore. It was said this was the second-largest contract for the company in Indian government space, after the Rs 2,000-crore Passport Seva Project of the Ministry of External Affairs.

“Our philosophy is to build in India, demonstrate the scale and complexity here, and then take it to the rest of the world. That is what we are doing,” Chakrabarty said.

TCS is also focusing on countries such as Columbia and Mexico, targeting opportunities in their financial and healthcare segments.

Passport Seva completes 3 years in Bangalore

Passport Seva Project, the mission mode programme of the Ministry of External Affairs, has completed three years of operations in Bangalore. In 2010, a pilot phase of the project was launched in Bangalore. Since the project was implemented, 1.17 million passport applications have been processed in Bangalore. TCS had bagged the project in 2008.