TCS' ITaaS gains currency among SMEs

The Information Technology as-a-Service (ITaaS) offering from Tata Consultancy Services (TCS), the country's s largest software company, is finally catching the fancy of India's small and medium enterprises (SME). The IT giant has recently signed an agreement with Apparel Export Promotion Council (AEPC), one of the largest industrial councils in the country, to provide end-to-end IT solutions and services to its nearly 11,000 members.

Earlier, TCS had also signed up with Pithampur Audyogik Sangathan (Indore) that has 500 members and Coimbatore District Small Industries Association, which has over 5,000 members.

ITaaS is a subscription-based one-stop shop for total end-to-end IT and hardware solutions. While TCS denied to give any details of the investment that it is putting in for developing application and solutions for AEPC, sources said the IT firm will invest $1 million (around Rs 5 crore) in the pilot project alone and would be charging Rs 500 per month per user.

“AEPC has given us 10 anchor customers with whom we will be working and creating a business solutions for the apparel industry. This will not only take care of access device, network solutions, common office/administrative solutions but will also take care of core technology requirements like ERP (enterprise resource planning) and supply chain management,” said Venguswamy Ramaswamy, global head, small and medium business, TCS.

Ramaswamy added, “Our approach is to target industry clusters. As firms in such clusters tend to follow what the other members are doing. Currently, we are working with over 40 customers in multiple clusters. Our focus for the first year is to have a good set of anchor customers and then scale it up.”

“Many of the apparel members have IT systems but none among us has a system that caters to all our requirements. Besides we have to upgrade our systems at regular intervals, which entails considerable investment. If TCS is able to get a system in the next eight months it will mean huge cost savings,” said Ashok Rajani, vice-chairman, AEPC.

He also feels that embracing IT is important as many of the international partners are insisting for an online presence.

For TCS, the focus on the SME segment is very crucial as the company sees this market rising to Rs 2,000 crore in the next three-five years.

Ramaswamy believes that ITaaS' contribution to the overall revenue will be significant in the next few years. “If you look at the apparel industry, the members are in the revenue bracket of Rs 200-300 crore and it can go up further.

The IT spend of these companies is anywhere between 3-4 per cent,” he said.

Other than the manufacturing segment, TCS is focusing on verticals like education, retail, and healthcare. In the education sector, the company plans to target universities.