Our biz is only B2B, we may get into B2C: N Ganapathy Subramaniam of TCS

In a Q&A, the COO of India's top IT services firm speaks about the company's wish list beyond numbers, concerns on slowing growth commentary from brokerages that has pulled the stock down

With a stellar year in terms of growth, Tata Consultancy Services (TCS), India’s largest IT services firm, has set its eyes on its next milestone--being a $50-billion company. Chief Operating Officer N Ganapathy Subramaniam spoke with Shivani Shinde about the company’s wish list beyond numbers, concerns on the slowing growth commentary from brokerages that has pulled the stock down, and more. Edited excerpts:

Your annual report states that reaching the $50-billion goal sooner rather than later is achievable. Beyond the numbers, where do you see TCS in the next five years?

TCS has over 600,000 people and we are $25 billion now, but I don’t want to be 1.2 million people when we achieve the target of $50 billion. The first wish list is to achieve the $50-billion milestone with fewer people, so that there is an element of nonlinearity as well. Second, in this journey our customer base will obviously expand, but then how do we operate in the ecosystem? We are not just working with our customers, but we play in the customer’s ecosystem.

If you are part of ecosystems, then what happens at one client becomes relevant for other customers, too. This also allows us to create systems that give real-time information. Future solutions are going to be such. The third wish list is seeing TCS in Metaverse. At present Metaverse is a hype cycle. If it succeeds, then I would like to see TCS there, too.

We will continue to charter in uncharted territories. For instance, we’re not in the consumer business. Our business is only B2B, maybe we’ll get into B2C, I don’t know. So many such things can happen. In TCS, we have a highly collaborative ecosystem, and we have to do all of this without losing our value systems. That’s the last wish list.

The financial services segment has been crucial for the industry and for TCS, too. Several reports suggest that FY23 may see this sector slow down spending. Q4 did have some impact on this. For TCS how do you see BFSI panning out?

BFSI is one of the earliest adopters of technology -- they’ve always been ahead of technology, compared to all other sectors. So BFSI, because their products are all pretty much technology-driven, also consumes the largest amount of technology talent and technology resources, as opposed to any other vertical.

Second, they are probably integrated with every other industry, because everybody needs finance. Almost every aspect of banking is undergoing change, and all that requires technology. The demand for such transformative solutions in the banking space is at an all-time high from a market infrastructure perspective, and when that happens banks will have to make changes.

We are the largest provider of technology services, in terms of both revenue as well as efforts. We have a solid play in the BFSI segment. We have built products and platforms across the sector. Our core banking product is top notch.

Probably 30-35 per cent of the world’s population uses our product. When you take asset management or corporate actions, for example, almost 90 per cent of the corporate actions processed in the world -- whether it is dividend and bonus or any other space -- go through our platform. Likewise, in insurance, we have built a very solid platform, with about 20-25 million policies administered across major markets.

In India, many insurance companies use our platform for processing policies and claims, in both life and non-life. We have very sophisticated knowledge of how business gets done in banking, capital markets, and successfully encapsulated that knowledge in building those platforms. For instance, we are now tracking regulatory changes in over 96 countries and those changes are reflected in our products as well.

Several brokerages have said that the peak is over for the IT sector, and FY23 will see pressure. This is reflected in stock performance, too. What are clients saying?

First, so far, in all the discussions with clients, we have not heard anything abnormal. I don’t see any big uptick, or anything which is showing me the wrong direction. Second, for the past decade or so we have lived with uncertainties. And we have seen that in such times companies have leveraged to transform, and you don’t pull a plug halfway.

There are fewer mega deals these days. How does this impact a company of TCS’s size?

For FY22 our total contract value (TCV) was $11.3 billion. Our quarterly run rate in TCV is $8-9 billion. About a year ago it was $6-7 billion. Mega deals will come once a year, twice a year, and if you are lucky, you get three. Our focus is to make sure that we have large deals, small deals, and mega deals. The time taken to close a mega deal is anywhere between 18-24 months. Sometimes, we can close these deals in a year’s time.

What will be TCS’s 5G play?

We are supporting a number of customers in the process, in their network planning, in rolling out solutions around 5G, and in rolling out the 5G network for them. How do you optimise that network, how do you make that network self-healing and self-configuring?

Our approach to 5G is three-dimensional. One is that there is a telecom network where we will act as a systems integrator to integrate, deploy multiple heterogeneous infrastructure from leaders in that industry, and then deploy that network, manage that network, and operate it very well for our telco customers.

The second is, how do I help enterprises and corporates to build a private 5G network within their facilities, within their campuses, complying with the laws of the land, and act as a systems integrator to bring in the telecom equipment that is required.

The third dimension is to leverage these two network layers to build vertical applications on top of it. It’s a huge opportunity. TCS’s strength is software, and more and more of the network is also getting softwarised, so in that context we have a bigger role to play beyond the applications. We have built a lot of experience and expertise, which is what we’re looking at.