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Tata Consultancy Services (TCS) recently reported a quarter of many firsts. During its second quarter, TCS signed its biggest deal ever with the Nielson Company and also became the first Indian IT company to cross the 100,000 employee-mark, raising the bar for Indian IT companies on the whole. TCS believes this is just the tip of the iceberg when it comes to its overall strategy in reinforcing its position as the No.1 IT Software Company in India and in the near future, to be recognized as a global player. SDA sat down with Girija Pande who heads the Asia Pacific region for TCS and found out what else is in the cards for this organisation in terms of financial growth, employee growth, the new services it has ventured into and how it plans to face the competition.

SDA: TCS recently reported its Q2 results at 1.42 billion—a 10.8 percent quarter on quarter increase. Could you comment on these results?

Girija Pande: TCS Q2 revenues reached USD 1.42 billion during the second quarter, which is a 10.8 percent quarter on quarter increase, and a 45 percent year on year increase. We enjoyed strong quarterly profits as foreign companies look to outsourcing to cut costs.

SDA: Which areas of your business did you see contributing most to these results and what drove the growth?

Girija Pande: Our strong results were driven by strong growth in banking and financial services, telecom and manufacturing verticals, which grew faster than the average company growth rate. Travel and hospitality is also fast emerging as a key vertical contributing 4.4 percent of revenues, up from 2.8 percent in Q1 as a result of significant client additions.

SDA: Over 50 percent of your Q2 revenues came from new services (non-ADM services including consulting, BPO and infrastructure services) which grew at double digit rates. Could you comment on how this came about? And why do you think these services are growing at double digit rates?

Girija Pande: TCS is already shifting towards higher margin businesses such as consulting, BPO and infrastructure services. In our last quarter, these services accounted for more than 50 percent of revenues, and they are all growing at double-digit rates. The reason why we are experiencing high growth in these areas is that companies are realizing TCS’ full service model, where we are able to leverage consulting, IT, infrastructure and business process outsourcing services through our Network Delivery Model.

SDA: The deal with the Nielson Company is a big win for TCS and has raised the bar for Indian IT industries on the whole. What does this deal mean to TCS and how, do you think, your competition should react to this deal?

Girija Pande: The announcement with the Nielsen Company is an important win for TCS and is worth .2 billion over ten years. The partnership is significant on a number of counts in addition to being a very large deal. First of all, the type of services we are providing for the Nielsen Company is wide-ranging – from the outsourcing of the company’s IT and operations functions, to assuming responsibility for certain finance and human resources business processes.

SDA: What does this 10 year deal entail and what does this deal mean to both TCS and the Neilson Company?

Girija Pande: TCS will set up an Innovation Lab with Nielsen to help the customer conceptualize the next generation of business solutions for its end-clients globally. The BPO platforms will help Nielsen consolidate and transform its processes and systems into a single platform, thereby providing real-time access to organization performance and reporting. The BPO services cover end-to-end financial services in such processes as accounts receivable and payable, billing, credit & collections and general accounting, and HR processes, including workforce administration, global reporting and payroll services.

TCS will also gain from this partnership. As part of the agreement, TCS said it will take direct responsibility for a Nielsen team based in Baroda, Gujarat that has developed significant expertise in key information-management processes for Nielsen’s Retail Measurement Services, one of Nielsen’s core products for packaged goods manufacturers and retailers. The addition of this team will complement TCS’ established Knowledge Process Outsourcing (KPO) team and help to accelerate development of TCS’ KPO service delivery platform. This development will enhance TCS’ domain expertise and make it one of the largest KPO providers in India, working in such areas as analytics and reporting and reference data management.

SDA: TCS also made headlines in Q2 for being the first Indian IT company to cross the landmark of 100,000 employees and you are still aggressively hiring with a target to recruit a further 35,000 employees by March 2008.How do you feel about this achievement, and why is TCS on such an aggressive recruitment drive?

Girija Pande: In the IT services industry, human talent is our most important asset and attracting and retaining talent is pivotal to our success. At TCS, we are determined to win the battle for IT talent and we have already enjoyed success having recently crossed the landmark of 100,000 employees. A lot of the success TCS has had in attracting and retaining the best talent is due to our successful HR recruitment strategy.

TCS’ Global Internship Program which launched last year has helped ease constraints on the supply side by bringing a wealth of talented individuals to TCS. Aside from meeting TCS’ employment needs, the Global Internship Program also enables students to work on real time projects and benefit from corporate work, so it’s a good payoff for both parties.

We’ve had a lot of success in recruiting the best talents in the industry with our strategic alliances with universities around the world, which means that we get first pick of the best people from a global talent pool. For example in Singapore, we have existing relationships with National University of Singapore, Nanyang Technological University, and Singapore Management University.

Globally, TCS added 30,000 employees to its workforce in 2006 alone, which is equivalent to 125 people a day. The TCS’ APAC business itself is a truly global corporation made up of people from 25 different nationalities, with 50 per cent of its staff working on client-site.

It is the same situation in the Asia Pacific region and with the recent hiring of 600 new employees in the Asia Pacific region we can better meet the demands of its rapidly expanding business in the region.

We have now bolstered our staff numbers to 5,000 in the APAC region (including Japan but excluding India). Fueled by a record number of client wins over the last year, TCS’ APAC headcount is set to increase with plans to recruit another 1,000 employees by the end of the year.

SDA: It seems like you have been hiring aggressively in the northern regions of India. Is there a particular reason for this and do you plan on expanding your hiring to the southern states of Indian and also internationally?

Girija Pande: TCS is hiring from everywhere, not just in India. We have set up Training Centers established in China, Japan, and India, to train employees in local languages. As the battle for global IT talent heats up, TCS has managed to maintain an average annual employee growth rate of about 50 per cent over the past three years, and a drop of attrition rate by three per cent from 2006.

SDA: Could you tell us more about TCS Global Consulting Practice?

Girija Pande: TCS has a strong focus on Consulting. We set up our TCS Global Consulting Practice in 2004 and we currently have nearly 1,000 consultants worldwide. We are looking to take on the likes of IBM, Accenture, and Cap Gemini, in the consulting space, and we have plans to add another 4,000 headcount to the TCS Consulting practice in the next three years.

SDA: Do you at all feel intimidated by competing with the likes of IBM, Accenture and Cap Gemini in this space and how do you plan to differentiate yourself from the competition?

Girija Pande: The advantage that we offer is that we are able to provide consulting in addition to our traditional strength in IT services. We also offer infrastructure and enterprise transformation, and platform-based BPO. When we engage with global customers, we are not only able to efficiently run the business but also help transform it.

SDA: You mentioned about having some 20 deals in the pipeline worth more than USD 50 million, could you tell us more about this?

Girija Pande: We can’t give any more details at this stage.

SDA: What is in store for TCS for the next quarter? What are your revenue and growth forecasts?

Girija Pande: We cannot give revenue/ performance forecasts but we expect to main/ increase our growth.