case study tcs

7/29/2019 Case Study TCS

1/19

Indian IT Industry


2/19

2

Global Demand (IT Services)$416 (2004) $555(2009)

Outsourcing Services$148 (2004) $218 (2009)

Offshored Market$9.8 (2004) $19.8(2009)

Source: IDC Research

All figures are in billion USDIT Services pie expanding

Offshoring of IT services

expanding faster

Global IT Industry Trends


3/19

3

Offshoring Trends..

Today

% of Respondents* % of IT Services beingoffshored

73%

15%

0%

12%

2%

20%

70%

8%

15%

Labor Arbitrage Productivity CompetitiveEdge

% of Respondents*

Tomorrow

Primary drivers for Outsourcing are continuously gettingre-defined


4/19

4

Worldwide Offshore IT ServicesExport Share by Region 2004

Source: IDC, 2005

India

75%

CEE

7%

Philippines

5%

Latin America

4%

China

3%

Canada

2%

MEA

2%

Others

2%


5/19

5

IT Services - Comparisons

Low Medium High Source: Gartner Research

India Advantage continues


6/19

6

Distribution of IT Services imports andexports across Regions / Countries

(for the year 2004)

Importingcountries/regions

Countries / Regions from which software is exported from (in USD million)

Canada India Philippines Latin America china MEA CEE Others Total

United States 135 5557 428 375 270 150 466 128 7509

Canada 0 114 3.2 0.9 2.3 2 12.2 0.4 135

Western Europe 62 1487 0 0 14 0 183 18 1764

CEE 0 35 0 0 0 8.3 0 38.9 83

MEA 11.2 73 0 0 0 0 0 13.2 97.5

Asia Pacific 0 133 8.6 0 39 8.6 0 24.8 214

Total 208.2 7399 439.8 375.9 325.3 168.9 661.2 223.3 9802.5

Source: IDC, 2005


7/19

7

Current Indian IT Landscape

Category 2002-2003 2003-2004 2004-2005E

IT Services & Products 9.9 12.8 16.5

-Exports 7.1 9.2 12.2

-Domestic 2.8 3.6 4.3

ITES-BPO 2.7 3.9 5.7

-Exports 2.5 3.6 5.1

-Domestic 0.2 0.3 0.6

Total Software and Services 12.6 16.7 22.2

-Exports 9.6 12.8 17.3

-Domestic 3 3.9 4.9

Hardware 3.6 4.8 6

-Exports 0.3 0.5 0.7

-Domestic 3.3 4.3 5.3

Total IT industry(Software+ITES+hardware) 16.1 21.5 28.2

Source: NASSCOM

All figures are in billion USD


8/19

8

Distribution of IT Revenues acrossvarious Service lines

Service Line India Worldwide

USD Billion FY'03 FY'04 Growth CY2002 CY2003 Growth

Project oriented services 3.23 3.85 19.20% 124.4 130.4 4.80%

IT consulting 0.08 0.12 50.00% 20.8 21.5 3.10%

System Integration 0.1 0.14 40.00% 64.5 66.8 3.60%

Custom Application Development and

maintenance 3.02 3.54 17.20% 18.8 20 6.50%

Network consulting and integration 0.03 0.05 66.70% 20.3 22.1 9.00%

IT outsourcing 1.94 2.45 26.60% 116.8 133.5 14.30%

IS outsourcing 0.01 0.02 100.00% 67.4 76.2 13.20%

Application outsourcing 1.85 2.16 16.80% 14.6 17.8 22.20%

Network Infrastructure Management 0.08 0.27 260.00% 34.9 39.4 13.10%

Support and Training 0.37 0.61 64.90% 108.9 118.2 8.60%

IT training and Education 0.02 18.8 19.5 3.60%

Hardware Support and Installation 0.02 0.04 100.00% 45.1 48.6 7.60%

Packaged Software support and Installation 0.35 0.55 57.10% 44.9 50.1 11.60%

Total 5.54 6.91 24.80% 350.1 382.1 9.10%

Source: Nasscom, IDC


9/19

9

Indian IT story

Tata Consultancy Services Ltd in 1968 under thevisionary leadership of Mr. F. C. Kohli

Manyyears ago there was an industrial revolution.We missed it due to reasons over which we had nocontrol. Today, there is a new revolution arevolution in Information Technology whichrequires the capability to think clearly. This wehave in abundance. We have an opportunity to

participate in this revolution on an equal footing;We have the opportunity to beleaders.


10/19

10

TCS agreed to export software in lieu of import of hardware or computers.

TCS with a reference from Burroughs did a large software project forDetroit Police Department in 1974

TCS moved from low value development services to Migrating systems in

1979 Key clients include IBM and American Express

Exit of IBM in 1978 due to Foreign Exchange Regulation Act (FERA)

IT departments of big firms and startups Birla, DCM to fulfill export obligations for import of computers Infosys and Patni

MNC like Texas Instruments, HP, Digital started getting established after 1980

Indian IT story


11/19

11

Indian IT story Export led growth

Growth of IT industry (1994-2004) (in USD Million)

Year ExportRevenues

Export Growth(%)

DomesticRevenues

DomesticGrowth

(%)

1994/95 480 53.15 350 N.A.*

1995/96 734 52.63 490 40.00

1996/97 1085 47.82 670 36.73

1997/98 1750 61.29 1152 71.94

1998/99 2650 51.42 1380 19.79

1999/2000 4000 50.94 1537 11.37

2000/01 6300 57.50 2024 31.68

2001/02 7647 21.38 2265 11.90

2002/03 9545 24.82 2769 22.25

2003/04 12800 33.33 3374 21.84


12/19

12

Late 1980s aggressively move offshore

TCS first development center in Chennai

Indian IT story - Offshoring

90

6158.2 57.4

56.1

45.243

38

5

29.5

33.9 34.7

38.6

50.7

57

62

0

10

20

30

40

50

60

70

80

90

100

1990-91 1994-95 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04E

%o

fRevenues

Onsite

Offshore


13/19

13

Distribution of Quality Certifications

SEI QualityAssessment No. of Companies ason 31 Dec. 2001 No. of Companies ason 31 Dec. 2002 No. of Companies ason 31 Dec. 2003

SEI CMMI 1 2 5

SEI CMM Level 5 36 48 67




PCMM Level 5 1 5 4

PCMM Level 4 1 1 1

PCMM Level 3 4 5 6

PCMM Level 2 4 3 2

ISO 9001 N.A. N.A. 178

ISO 9002 N.A N.A 13

ISO 9000 N.A N.A 6

Indian IT story Process capability

Major deals with ABN AMRO and Pearl

Global Development Centers


14/19

14

Factors governing IT growth

Skilled Manpower

250,000 engineering graduates and diploma holders enter theworkforce annually

14000 colleges and 272 Universities producing about 2.5 milliongraduates every year

Establishment of IIITs and introducing courses in computer science /Information Technology in Engineering Colleges.

Distribution of IT and ITES professionals

Segment 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05E

Software - exports sector 110000 162000 170000 205000 270000 345000

Software- domestic sector 17000 20000 22000 25000 28000 30000

Software- inhouse captive 115000 178114 224250 260000 290000 322000

ITES-BPO 42000 70000 106000 180000 253500 348000

Total 284000 430114 522250 670000 841500 1045000


15/19

15

Establishment of STPI Around 40 STPIs across the country

Investment in Telecommunication Infrastructure Liberalization of Telecom by allowing FDI in the sector

Allowed ISP and Internet Telephony

Stable Economic and Political Environment Stable Financial System

Improvements in banking infrastructure electronic banking

Most of the operations are now electronic with respect tobanking, stock exchanges, etc

Government invested in various kinds of infrastructurerelating to transportation, power and real estate



16/19

16

Information Technology Act in 2000

Acceptance of Digital signatures and electronic records

Tax holidays to software firms

Apex body NASSCOM Quality Certifications

Issues relating to piracy, Intellectual property

Security certifications

Lobbying with government



17/19

17

Road Ahead

Domain capabilities New verticals like Healthcare, Hospitality, Logistics, Retail, etc

Service capabilities Faster provisioning of services

Access to broader array of services including consulting, ISoutsourcing, system integration, etc

Geographic expansion/reach For markets and delivery

Investments in new technologies RFID, VOIP, etc.

Open Source


18/19

18

Core Elements of our Strategy

Extend geographic presence

Delivery & Customer Reach

Selectively Pursue Partnerships& Inorganic Growth

Invest in R&D and developunparalleled execution capability

Invest in people and develop

high-performing teams

Full Services IT Player

WeBuild Today

forYOUR

Tomorrow

Continue to strengthen

Domain Competency


19/19

Thank You

case study tcs

Documents