MUMBAL: After reporting lower-than-estimated numbers in Q1, IT services major Tata Consultancy Services (TCS) is confident that their long-term client relations will survive the pandemic, said N. Ganapathy Subramaniam, COO, TCS. The company is mobilising support for clients across the board through investments in automation, remote working solutions and cyber security, Subramaniam said in an interaction with Mint. Edited excerpts
Your top verticals of banking, financial services and retail and CPG suffered double digit setbacks during the quarter. How is TCS looking at business continuity from here?
In Q1, everybody was concerned about the economic impact of the lockdown globally and thinking about deferring discretionary spends across verticals. Clients are conserving resources and we are giving them optimisation levers. Half of retail is stressed out and facing bankruptcy while UK clients are facing the double whammy of Brexit and covid-19. Verticals like Travel & hospitality, Media and broadcasting have been hurt by the cancellation of major events like the Olympics.
Some clients have requested to not even bill them in their current situation and we are supporting them since we have long term relations with them. We have reduced the workforce and brought in automation to support these clients. As a part of the 37 odd deals that transitioned this quarter, we onboarded little over a thousand client employees in India, US etc.
You announced a number of large deals in the past eight quarters and had an above average deal total contract value (TCV) of $6.9 billion this time. Are clients not renegotiating now?
We need to have this $5-6 billion TCV range to ensure that we keep growing. Each of these quarters have at least one or two large deals which are long term deals (7-10 years). We are pulling revenue from these deals and are not seeing major requirements to renegotiate or defer. Both new and renewal deals are happening. There is demand for cyber security, cloud and analytics solutions as a part of remote working and digital transformation initiatives which are being bundled with secure borderless workspace (SBWS).
Do you see any revenue opportunity from SBWS?
We don’t know yet if this is going to be a sizeable business but the core focus is enabling secure connectivity, engaging with employees and monitoring productivity. Clients have started realising how well the SBWS solution works and increasingly want us to implement it for their workforce. So the whole process of prospecting, selling, contracting and onboarding clients has progressed remotely through the quarter. We have SBWS customers across banking, capital markets, communication, etc. A lot of it will be AI and algorithm driven and is also integrated as part of the Ignio platform offering.
Is TCS going to reassess the real estate footprint now that the 25% employee presence plan is concrete?
We have not looked at real estate from that perspective. At the same time we are staying invested in all our 118 development centres globally. We altered them so that people can come to these offices safely when required. Earlier, we were limited by the fact that a particular customer could only be addressed from a development centre in maybe Hungary and Chennai. Which means that the talent recruitment was restricted but now we can link up talent from anywhere like Nagpur, Guwahati etc. Such talent may have earlier missed the opportunity to work with this customer but SWBS will allow them to do that. This quarter we will be able to increase the office presence to 5% this month.
TCS took a stand on the H1B ban this time. How much will the ban impact business?
You have to work with the local law and still be meaningful to your customers. We have invested in the US, created development centres and have a strong workforce there. In the short term, if visas are not renewed some people will come back and customers will be addressed through SBWS. But in the long term, for transformational projects there is a need for people to be able to work on-shore with the right talent mix, sourcing and delivery ecosystem