TCS signs Rs 230-cr BPO deal

Tata Consultancy Services (TCS) bagged a $50 million (around Rs 230 crore) deal in the platform-based business process outsourcing (BPO) unit.

The deal win is significant for the company as it scales the platform-based BPO offering as a part of its non-linear growth strategy. TCS however, did not provide other details of the deal, like the platform type and vertical details.

“Clients are very much interested in platform-based services. In a normal deal a customer would have to pay for the hardware, software and pay someone like us to customise it to their requirement. But in a platform deal, there is no upfront cost they just pay for the services. They can keep using it till they like the services,” said N Chandrasekaran, Chief Executive Officer and Managing Director of TCS.

With over 20 customers, TCS currently has seven platform-based offering in its BPO unit. These include HR and payroll, finance and accounting, procurement, analytics, reconciliations, payments and life and pension.  

Chandrasekaran also feels that the platform-based approach is applicable in other services segments as well. “My first priority is to build scale in this business and prove it. There are opportunities to introduce this in other services as well. But I want to demonstrate success first,” he added.

TCS increased its focus in the BPO segment only in 2008 with the acquisition of Citigroups captive BPO arm Citigroup Global Services (CGSL). Last year the company came out with a detailed strategy on its BPO business, wherein platform-based offering was an important focus.

The three core elements for TCS’ BPO strategy would be: large scale domain led transaction services that would give a huge amount of opportunity in making cost efficiencies for clients. Two, integrated IT and operations and thirdly, platform based business model, which shifts the business model to pay-per transaction.

The BPO business contributed 11.5 per cent to the company’s revenue in the third quarter ended December 31, 2009. TCS aims to grow its business process outsourcing (BPO) business to a $3 billion unit in the next five years.