TCS works on big e-commerce deals

Tata Consultancy Services (TCS), the country’s largest IT services provider, is working on five requests for proposals (RFPs) for e-commerce deals worth $75-100 million (around Rs 350-500 crore). This is despite the fact that the retail segment has been under pressure globally.

For TCS, the retail business has been growing at 10-12 per cent over the last three quarters. On a year-on-year basis, the growth rate of the retail business has been impacted due to currency fluctuation and the general slowdown. In dollar terms, the retail business grew 51.6 per cent for the company last financial year. The numbers look big as the retail base was small before the company adopted a vertical business model. But after adopting the model, the company has been bagging at least one large deal in each quarter since last two-three quarters in the retail sector. For the quarter ended December 31, 2008, TCS bagged two deals in the retail segment.

With close to 12,000 people in its retail operations, the unit’s contribution to TCS’ revenue has increased from 7.2 per cent one-and-a -half-year back to 11.4 per cent now.

The company has close to 60 clients in this sector.“Just about 1 per cent of the retailers’ overall revenue is spent on IT. But with cost pressure increasing, many are looking at outsourcing in a big way. Besides, till recently, the retailers who took on outsourcing were the large firms. The mid-sized retailers (with revenue of $5-10 billion) have not done outsourcing,” said Pratik Pal, retail practice head of TCS.

Along with an increased focus on outsourcing and offshoring among the retail firms, TCS has also seen an uptake of its business process outsourcing (BPO) services by retail clients.

“Our approach even in the retail segment is to take the full-services play. As a value addition we have proactively bundled the BPO services along with the IT offering. Traditionally retailers did not opt for BPO, now that is changing,” adds Pal.

He also adds that the nature of the deals is also changing. Earlier, deals would span over a period of two-three years, now they go up to five-seven years. BPO services are also getting accepted by customer.

Along with BPO, retail customers are also more open for offshoring. Among the new wins, close to 70 per cent of the work is being offshored. Pal also said that BPO processes such as finance and accounting (F&A), HR, supply chain, procurement, etc are getting offshored.