TCS defends India's outsourcing players

Asia-Pacific president of Tata Consultancy Services says even global outsourcing vendors have over half of their workforce based in India, making it difficult to determine if Indian rivals are losing out to global competition.
Written by Liau Yun Qing, Contributor on

Tata Consultancy Services (TCS) has dismissed suggestions Indian outsourcing players are losing steam against their global competitors, saying the nationality of the service provider is no longer a key consideration.

Vish Iyer, Asia-Pacific president for TCS, said it is not easy to define an outsourcing company as Indian or global, noting that large outsourcing providers such as Accenture or IBM have over 50 percent of their workforce in India.

"It's the same cake served with different wrappers," he said. Iyer added that TCS's workforce is distributed equally across the globe.

While TCS has its roots as an Indian player, he said the company is now one of the world's top IT players and has scaled up the value chain in all activities since its establishment 40 years ago. He added that TCS also has the third-largest market capital among Indian businesses.

"It's not about a country any longer, it's about the global industry," Iyer said, adding that TCS has delivery centers worldwide delivering out of markets such as the United States, the Philippines, Chile and eastern Europe.

He was responding to suggestions India was losing its place as a top outsourcing provider to countries such as China and the Philippines, and its outsourcing providers were facing stiff competition from bigger global players such as U.S. outsourcing player Cognizant, which clocked stronger quarterly growth than India's Infosys, Wipro and TCS.

Iyer rejected the notion TCS was seeing slowing growth, noting that the company has been growing for the past five quarters and its CEO has said it will grow faster than the average industry growth rate predicted by India's National Association of Software and Services Companies.

Indian players, though, face several challenges including anti-outsourcing rhetoric in some countries which expressed concerns over loss of local jobs.

When asked, Iyers said TCS allays such fears by creating local employment whenever possible. For instance, the company established four delivery centers in the U.S. over the past three years and stepped up its graduate recruitment there, he noted.

He also underscored the need for outsourcing players to prove their value in the market.

Vineet Nayar, CEO of another Indian outsourcing player HCL Technologies, had previously said the company would stop "hunting" for new clients and turn its focus to become a "farmer" and cultivate its existing client base.

In response, Iyer said: "I don't understand how you can be in the market without 'hunting' or 'farming'. We're not selling products that you can sell today and go away tomorrow.

"Our relationship [with our customers] are deep and entrenched," he said, adding that 99 percent of the company's business comes from repeat customers. "Every stage, we have to demonstrate our value and usefulness."

Internal departments need to be accountable
Iyer added that a company's internal departments also can learn from outsourcing providers.

He explained that one of the benefits organizations gain from outsourcing is an improvement in quality of service, since internal departments--whether it is finance or IT--would bypass key business processes.

Bringing an external partner such as a consultant or an outsourcing provider would heighten awareness for delivering better quality of service, he said.

According to Iyers, TCS measures it service delivery based on 25 parameters. Each week, a report is generated based on these parameters, showing show delivery downtimes or jobs that are completed, he said, adding that customers with large engagement with TCS also receive the reports.

However, not many internal departments take this process seriously, he said, adding this can increase productivity in an organization with an internal supplier-customer relationship.

"Very often, companies do customer satisfaction surveys and do not do an internal customer satisfaction survey," he said.

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