India Inc India Inc: Tuesday, 28 February 2012 10:45

Special Report: TCS offers a blueprint for India-UK growth

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TCS-ChandrasekaranN. Chandrasekaran is the CEO of Tata Consultancy Services (TCS), one of India’s largest IT and software providers. In the lead up to a key note address at this year’s UK India Business Council summit in Manchester, he delves into the scope in the India-UK sphere.

Do you believe the UK is an attractive market for Indian IT companies such as TCS? 

The United Kingdom continues to be an attractive market, not simply because of its size or relative maturity but because it is a very dynamic market that attracts the best in technology, talent and investment across the spectrum of industries. It is competitive and open markets and companies who want to create a global footprint for their brands and services have to make an impact in the UK.

Today, TCS derives over 15 per cent of its global revenues from the UK & Ireland, which is second only to our operations in the US. Several other factors such as a shared language, ease of doing business, a long standing economic and social relationship, make it very attractive for Indian businesses in IT or even in other sectors to consider the UK as an significant component of their globalisation plans.

Why did TCS choose the UK for its operations?

TCS and the entire Tata group have had a long relationship with the UK. We entered the UK market 37 years ago in 1975, as part of our pioneering vision to create a global delivery model for IT services and build the India brand. Our operations and investments in the UK have expanded exponentially and is an extremely material part of our business. The UK houses great companies across sectors, including financial services, banking, insurance, manufacturing, retail, telecom, with whom we partner for their technology requirements. Moreover, the attractive business ambience, great infrastructure and talent make it an extremely compelling business destination.

How many staff do you have in the UK?

We have almost 8,000 staff based across multiple locations across the UK. Globally, we are welcoming a new hire to our company every eight minutes and the UK is one of the top contributors of international talent to our company.

Do you have any plans for expansion in the UK, similar to your recent expansion in Silicon Valley?

We have been expanding consistently in the UK. Just in the last five years since 2006, we have doubled the size of our operations in the UK. We operate one of our largest operations centers for the life and pensions industry right here in the UK through our subsidiary - Diligenta.  The unit has a large centre and head office in Peterborough, along with a presence in Liverpool, Basingstoke and Bournemouth.

In which areas and sub sectors do you see most UK-India business growth?

In 2011, the trade between UK and India stood at £13-billion level, which demonstrates good growth in relative terms but in absolute terms, I believe there is significant head room for expansion. Currently, the UK is only a top 15 trade partner for India, accounting for 2.2 per cent of India's overall trade. This leaves room for deeper trade and relationships across a broad range of sectors from pharmaceuticals and biotech to Information technology and financial services. India's rapidly expanding consumer market - by 2030 India will likely emerge at the world's third largest economy and account for 27 per cent of the global middle class - also provides an expansive potential opportunity for British businesses. Many British companies are already well established in India but there is room for many more.

What advice would you give to UK businesses looking at India?

The opportunities in India are plentiful with a growing middle class, rising disposable incomes and good GDP growth in the range of around 7 per cent in this current fiscal year. But new entrants also have to remember, it is also very competitive, fragmented and hence unique and complex. I would advise them to really do their homework - study the unique local customer behaviour, local regulations, supply chains, constraints and risks – in order to get their strategy right the first time. There are many successful UK businesses for them to emulate.

What are the main challenges faced by an Indian technology company in the UK?

Shortage of good talent is a constraint, like all developed markets. We are working intensively with major schools and universities in the UK to orient the youth of the country towards working in a globalised world. The government, for its part, has always been supportive of investors and British companies have understood the value that the Indian IT services industry can provide to help them remain efficient and grow their businesses.

What is your advice to UK SMEs who have not yet done any business with India?

I will make just two points. Looking at India as a single homogenous market is a mistake - there are strong regional nuances, customs, preferences and languages, so businesses should either pick a few niches or really study and account for customisation when going for a nationwide strategy. Secondly, if it is the first time the company is entering the market and has no previous experience in dealing with it, then the right local partner can add value.

How has TCS helped UK businesses enter the Indian market?

IT has fast become the backbone of any business and over 85 per cent of the real economy depends on IT to function in one way or the other. As their technology partner, we work with many of our over 150 UK clients (including 25 of the FTSE 100) in strengthening their operating models, systems and infrastructure to enable their scalable international expansion. The wide operations we have in India and other emerging markets provides them a ready-made global partner which can follow them to any market they expand into and support their business. Let me share one example - UK-based United Biscuits was looking at a foray into India on an aggressive timeline. To enable it they needed a core IT system in place in double quick time, but implementing a full-scale ERP system in this timeframe would have been very risky and could have jeopardised production. We implemented our ION(tm) solution - a cloud computing based on-demand ERP service - which allowed them to set up in India with ease.

Source: UKIBC

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