While some global services providers are trimming their sales forecasts, TCS recently became the first Indian services firm to reach $10 billion in annual revenue. In the wake of that performance we asked Ankur Prakash, Vice President and COO of TCS Latin America, his thoughts about the Nearshore market.
Q: How does the overall market for Nearshore outsourcing look to you?
A: Every customer I have met has expressed a desire to do more projects. I am very optimistic about the demand.
Q: What is TCS’s current split between ITO and BPO?
A: In Latin America, the split between ITO and BPO is around 80/20. In Latin America, BPO will grow a little bit more than the IT sector, although BPO is starting from a smaller base. Both will grow in double digits.
Q: What specific areas are showing the most strength in the Nearshore?
A: Infrastructure services is going to grow quickly, and also enterprise solutions (such as ERP implementation and consulting.) In addition to that, some of the new areas like mobility and big data (analytics) are also going to grow substantially.
Q: What is your current employment in Latin America and how is that changing over time? In what countries is TCS expanding most rapidly?
A: We have approximately 8,000 employees across Latin America. By 2015 we are planning to be a 20,000 strong company. Brazil…is where we will have the maximum growth. But there are other countries such as Peru, Colombia, and Mexico which are also showing good signs of growth.
Q: How much of TCS’ growth in Latin America is driven by domestic demand as opposed to from North America?
A: North American demand is also there, but our engine for growth in Latin America has always been the local and regional customers.
Q: Some observers see India losing its cost advantage over Latin America? Do you agree, and if so, how is this changing your approach to the market?
A: I do not feel this is going to happen any time in the near future. The costs are growing (in India) but the costs are growing everywhere. There is inflation everywhere…I do not feel …in the next five years (this) is going to be a problem.
Q: How are you planning to achieve “non-linear” growth – increasing revenue without corresponding increasing head count?
A: One good example is platform BPO (which) we are offering to our customers around the world, and of course in Latin America. We are completely taking over a business process and setting up a complete platform — a technology and business platform…that means we can charge by transaction, rather than (the number of people performing the work).
Q: Are you moving to more outcome based pricing?
A: (We agree) to a project either to provide efficiency for the customer or to gain a better market share for the customer, or to reduce their costs. There has to be some end goal. We have to move from the current pricing to (pricing that reflects) a difference in their final outcome. Then, instead of being just a provider, the customer relationship is that of a strategic partner
Q: Finally, what are your greatest challenges?
A: The most important thing has always been to get and retain the right talent. That is where we put a lot of our focus. The second is to ensure that we deliver to our customers (the level of service) we are promising them.