TCS will beat Nasscom's growth guidance: N Chandrasekaran

Interview with CEO & MD, Tata Consultancy Services

Last month, Tata Consultancy Services, India’s largest software services company, announced the launch of its Digital Software & Solutions Group business unit, as clients globally focus on organisational transformation to keep themselves aligned with emerging technologies. Chief Executive and Managing Director N Chandrasekaran, in an interview with Bibhu Ranjan Mishra and Surabhi Agarwal, talks about how the company is preparing itself to tap those opportunities. Edited excerpts:

 

What was the need to set up the digital business unit? 

 

In the next few years, digital is going to bring massive transformation. It (digital) is a combination of all the powerful technologies, and not only social media, mobility, big data, analytics and cloud. These are giving opportunity to reimagine the way business is done. So, I think it is important to bring together our knowledge of technology, global best practices, methods, domain knowledge and knowledge of the customers.

 

Is the traditional information technology (IT) model slowly becoming irrelevant?

 

No model becomes irrelevant but, yes, every model changes. We can’t be doing the same thing. The customers are moving because the market as well as the technology is moving. So, we have got to be a little ahead of the curve and try to engage with the clients, helping them reimagine their businesses. We have to engage ourselves with customers to be able to make their business digital and we are doing that now.

 

Have you started offering digital services? Which sectors are you targeting initially?

 

Absolutely, we have started offering these. It’s happening across segments but mostly we see higher traction for digitisation in sectors such as media, retail, manufacturing, financial services and high-tech industry. In the next few years, we expect our incremental revenue from digital practice to be $3-5 billion a year.

 

Some say Indian IT firms are not focusing on intellectual property creation and innovation. What is TCS doing?

 

We have been doing it for the past couple of years and want to step it up. Even in digital, we have got a lot of intellectual property. We have collaboration centres on the West Coast (US), which is about digital re-imagination and customer collaboration; it has been there for two years. We have got several labs, people and workspace to promote innovation. We have created centres of excellence in areas like user interface design, user experience, cyber security — all the things required to bring the solutions to the market. We have also created intellectual property in foundation software — the kind of software tools needed to develop agile solutions.

 

In the recent past, lots of global technology majors are seen enhancing their engagement with the start-up ecosystem. What are you doing in this area?

 

We have a co-innovation network where we are studying investments in this space, especially start-ups who operates in areas that are relevant for us. The main idea is to leverage those in our business. We have a method to do that. 

 

You had plans to report your nonlinear revenue separately. How far are you from that?

 

We have said that our incremental revenue from the nonlinear will be 10%; we are hitting that target. When we think it has scaled and attained a critical mass, we will share more information. Currently, our efforts are on and still it has not attained the scale. 

 

When you acquired the Computational Research Laboratories from Tata Sons in 2012, you were targeting to commercialise their Eka Supercomputer. Has it happened already?

 

We have projects that are going on leveraging the power of computing, especially for our cloud business. In fact, we are trying to upgrade that machine as well. 

 

Nasscom has forecast FY15 exports growth at 13-15 per cent. Will TCS beat that?

 

We will certainly come ahead of the Nasscom guidance.

 

According to many analysts TCS has been quite shy in terms of making big acquisitions, instead prefer doing tuck-in ones? Your comments.

 

We look for the right ones and if we get the right ones we will do it. Whatever acquisitions we have done so far have worked extremely well for us and so we want to keep that record.

 

In the present market condition, are you running sprint or marathon?

 

It’s both, I think.