The art of reinvention
From being a one-customer company just five years ago, Tata Infotech's Americas business is now on the path to doubling its revenues every two years. Company vice president TK Cherian explains the transformation
TK Cherian is a vital cog in the machine that keeps Tata Infotech's business across the American geography in the pink of health. The 41-year-old vice president and country manager for the Americas, who is responsible for sales and operations in the USA, Canada and South America, swears by a brief that is focused on keeping Tata Infotech on the high road of doubling revenues every alternate year.
Mr Cherian, a TAS officer, began his career as a trainee engineer in the erstwhile Tata Oil Mills in 1985, and has worked with several Tata organizations over the 20 years he has been with the Group. In this interview with Christabelle Noronha, he details the challenges he faces in his present assignment.
Can you give us an overview of the markets, customers and revenues in the Americas?
Tata Infotech provides IT solutions and services to customers worldwide through three business divisions: systems integration, hardware manufacturing and educational services. Our customers in the Americas include leading organizations, ranging from Fortune 500 companies to pioneering start-up enterprises. For us, the key market segments of focus are banking, financial services and insurance (BFSI), retail, manufacturing, telecom, government and transportation. At present, we have over 65 longstanding customers in the Americas, of which nearly 20 are $1-million relationships.
Which are your main areas of business in terms of products and services?
The systems integration division has four primary offerings. The first is software engineering services and then there are our offshore development centers (ODC), where we provide software services and products from secure and dedicated facilities in India, serving as extended development and support centers. In installation services we supply and install information systems and components of information systems, including computing and networking equipment, as well as related software. Systems integration services include procurement, installation, configuration, commissioning and support of various components, including computing and networking equipment, site facilities, communication equipment, system software as well as application software to ensure a fully integrated system.
Tata Infotech also offers customers an integrated tax and license solution called Tax Mantra™ which has been implemented across cities in the US.
Our offshore hardware manufacturing division provides value-added contract manufacturing and design services. The division manufactures automatic document processing systems and subsystems for Unisys Corporation, and printed circuit board assemblies for global customers in the US, Australia, Italy, Singapore and India. It makes information kiosks and bill payment systems, and offers design services for compliance with the European Union's 'restriction of hazardous substances' norms.
Where do you see future growth coming from?
Tata Infotech will continue to focus on banking, finance and insurance, manufacturing, retail, telecom and transportation verticals. We plan to drive growth in the North America market by increasing business from existing customers, leveraging our domain expertise to acquire new customers, increasing our range of supplementary services — BPO and consulting — by partnering with Group companies, penetrating current and new accounts leveraging in-house technology groups focused on new niche technologies, and by exploring newer geographies such as Canada and South America.
Which industry segment is your major revenue earner, what is your projected growth over the next two years?
Nearly 40 per cent of our revenues accrue from the banking, financial services and insurance sector. The other significant revenue contributors are retail, manufacturing, telecom and transportation verticals. Tata Infotech's plan for the Americas is to push for a year-on-year revenue growth of over 50 per cent for the next two years, and sustain nearly similar growth rates in subsequent years too. During the last year, our Americas revenue was in the region of $75 million, up from approximately $50 million in the previous fiscal.
How much does the American market contribute to the company's overall revenues?
Tata Infotech's Americas revenue accounts for 40-50 per cent of overall revenues.
How many employees do you have in the US; how many are local recruits?
Approximately 20 per cent of Tata Infotech employees are located in the US. In some positions Tata Infotech has US citizens who were hired locally. Currently, we source engineering talent through our US-based partners. The percentage of local employees on our rolls is low and we are in the process of trying to increase locally hired employees. However, Tata Infotech's Canadian subsidiary, Exegenix Canada Inc, is completely managed by local employees.
How do you ensure that you measure up to global standards of quality; do you conduct any surveys?
Tata Infotech centers have been assessed at SEI CMM Level 5 and its methodologies have been assessed at ISO 9001:2000. The company has also been certified at BS7799 for information security and TL 9000 for telecom practice. The company has also developed extensive in-house development and support methodologies to ensure consistent quality of delivery. As a part of its overall governance structure, Tata Infotech conducts phase-wise and project-end reviews.
In our executive contact programs, divisional heads and senior managers visit customers on a periodic basis. Senior customer personnel also visit our delivery centers in India. Our customer complaint and feedback monitoring is tracked by the company's top management.
The maturity of the quality methodology lies in its adaptability. In engagements where the customers have their own processes, Tata Infotech matches its own with the customer's to arrive at engagement-specific solutions. The company prides itself on the intrinsic transparency of its operations, which ensures that issues are escalated through a multi-level governance structure that actively involves the client.
Tata Infotech periodically engages internationally recognized research organizations to undertake independent customer feedback surveys. The findings from these surveys play an important role in helping us continuously improve our processes. The last survey was conducted in early 2005.
Does a large part of your America business continue to come from Unisys?
Historically, Tata Infotech had been a one-client organization, servicing Unisys business worldwide. The Tata Group took over the Unisys stake in 1997, but till 2000 the major revenue streams for Tata Infotech continued to be dominated by Unisys, including the deadline-driven Y2K conversion business.
We had very few accounts and clients of our own back then. But immediately after the turn of the millennium, there was a rapid slowdown in business from our channel partners. Tata Infotech then reinvented itself, from having captive, assured clients and revenue sources to independently scouting and servicing new markets and customers.
Over the last few years, Tata Infotech has identified new customers, grown its client base and strategically reduced its dependence on partners. From being dependent on Unisys for 100 per cent of our revenues till a few years ago, at present the Unisys relationship accounts for just around 5 per cent of our business.
*Tata Infotech was merged with TCS in 2005