TCS
ANNUAL REPORT
FOR FY 2012
SUMMARY /
REVIEW (POST 2)
This is in continuation of
POST 1 on TCS Annual Report for FY 2012.This Post gives various details
about the Plans, Projects, people, key elements of success etc - of TCS.
The first Post is at :
OTHER DETAILS FROM ANNUAL REPORT
During FY 2011-12, TCS was able to capture
the business momentum, with all markets and the industries in which it operates
growing in double digits. New service lines like Infrastructure Services, BPO
and Enterprise Solutions gained global scale during the year with each service line clocking more than $ 1
billion in annual revenues. All other service lines also performed
admirably with each growing by double digits.
CUSTOMER BASE :- Over the last 12 months, TCS added 141
new customers across the world to take its active customer base to 1076. The
movement of customers across each revenue band from $1 million onwards has been
very positive, including growing the number of $100 million customers to
fourteen from eight in the previous year.
Across multiple industries globally,
technology spend is increasing moving from the back-end of the business -where
it brought in efficiency - to the front-office, where it is being leveraged to
gain consumer/customer insights and drive growth. Emerging technologies like
cloud computing, big-data analytics and social media backed by 3G and 4G
technologies is driving this transformation at customer touch points across
industries.
EMPLOYEES :- TCS has inducted and integrated 70,400
professionals in the past 12 months. Your Company’s continued success is due to
the dedication, commitment and performance of 2,38,583 energetic professionals,
who remain its biggest asset. Its talent retention rate is 87.8% – the highest
in the Indian IT industry.
PATENTS :- TCS has increased its patent filings
significantly and 460 patents were filed in several countries in 2011-12. Until
now, cumulatively, TCS has filed 855 patent applications of which 72 have been
granted.
PRESENCE :- TCS has also been steadily expanding its
geographic footprint. In addition to the traditional markets for its services –
namely, North America, United Kingdom and Continental Europe, TCS has been
expanding its presence in emerging markets like Asia-Pacific, India, Latin
America and Middle East & Africa.
In North America, TCS has strengthened its
local presence by investing and recruiting talent in local centers such as
Cincinnati, OH, Midland, MI and Troy, MI. TCS also opened a state-of-art office
facility in Santa Clara, CA, which will serve as customer collaboration center
and headquarter for mobility solutions unit and other upcoming
technologies.
As at March 31, 2012, TCS had 183 offices in
43 countries and 117 delivery centers in 21 countries.
STRATEGY : Key elements of TCS’s strategy for
longer term growth are summarised in the chart below.
CUSTOMER CENTRICITY :- Building and maintaining deep customer
relationship is the key to be a trusted business partner to global enterprises.
TCS’s industry-segmented, customer-centric organisation is an important enabler
to achieve such mission. The success of the strategy is visible from the
movement of customers to higher revenue buckets as shown in the table
below.
Col.1:Last twelve months revenue buckets :
(Col.2,3&4 :Number of clients in FY 2012 : FY 2011 : FY 2010 )
$ 1 million +
522 : 458 : 409
$ 5 million +
245 : 208 : 183
$ 10 million + 170 : 143 :
118
$ 20 million + 99 : 81 :
63
$ 50 million + 43 : 27 :
23
$ 100 million + 14 : 8 : 7
FULL SERVICE CAPABILITY : TCS’s continued investments in building
full services capability has resulted in a comprehensive, integrated portfolio
of services that captures the entire value-chain of IT, from consulting to
products and from implementation to support, presenting a compelling value
proposition for global enterprises. These end-to-end capabilities have made TCS
a one-stop shop for many key clients, significantly deepening the relationship
and boosting its share of wallet.
GLOBAL NETWORK DELIVERY MODEL (GNDMTM) :
This GNDMTM model is an industry benchmark that allows TCS to seamlessly and uniformly
deliver services to global customers from multiple global locations in India,
China, Europe, North America and Latin America. The GNDM™ enables teams located
in different delivery centers across the world to collaborate on projects and
leverage all of TCS’s assets while subscribing to ‘One Global Service
Standard’. With most of the large global clients expanding their focus beyond
their home markets, the scale and depth of TCS’s GNDM™ offering makes it the
preferred strategic partner in all those global expansion initiatives.
NON LINEAR GROWTH :- TCS is pursuing three strategic
initiatives to drive non-linear growth, namely, (1) Software Products (Asset
Leveraged Solutions) (2) Platform based BPO services (Process Clouds) and (3)
iON – an IT-as-a-service solution for small and medium business.
TCS FINANCIAL SOLUTIONS :- It is a strategic business unit that
enhances competitive capabilities of banking, financial services and insurance
firms in over 80 countries, using TCS’s best-in-class portfolio of business
application solutions marketed under the brand of TCS BαNCS.
TCS BαNCS product set is a component
repository consisting of over 30 business components. Each of these components
enjoy marquee client-base and recognition as leader in respective space by
industry analysts.
TCS financial solutions increased its
substantive customer base by adding 39 new clients during FY2012. In addition,
14 clients went “live” on TCS BαNCS solutions during FY2012.
PLATFORM BASED BPO :- This process cloud represents a new
business model wherein TCS manages and executes customers’ business processes
using its own, centrally hosted technology platform. This involves combining
intellectual property, infrastructure and BPO services into a bundled service
offering that enables end-to-end execution of business processes.
The model eliminates the need for the client
to invest in on-premise IT infrastructure, software licenses and maintenance
staff. Multi-tenancy of the platforms implies sharing of infrastructure and
staff, which significantly reduces the per-transaction cost of
technology.
TCS’s PLATFORM BASED OFFERINGS are in the areas of (1) life insurance and
pensions policy and administration, (2) analytics, (3) finance and accounts, (4)
human resources outsourcing and (5) procurement. In addition, niche offerings
in the areas of warranty analytics and collection/ sourcing were rolled out in
FY 2012.
iON :- iON, the TCS cloud-based comprehensive
business automation platform for small and medium businesses (SMB), launched in
February 2011, gained momentum in FY 2012. Clients pay a monthly rental for the
software, as per usage, instead of the traditional one-time license.
As on March 31, 2012, iON had 256 mid-market
customers. Some of the well known brands in India run their daily operations on
iON.
iON has filed 7 patents in the area of
framework-based software development, public assessment technologies and cloud
based multi-tenant systems; these technologies are at core of iON.
TECHNOLOGY AND INNOVATION :- TCS continues to invest in futuristic
areas related to healthcare and life sciences, materials science, computer
science and electrical / electronic engineering, in the TCS innovation labs as
well as alliances enabled by TCS’s Co-Innovation Network (COINTM).
NEW SOFTWARE PRODUCTS :- TCS’s current product portfolio largely
consists of the highly successful TCS BαNCS suite covering the financial
services value chain. TCS is now seeking to replicate that success in other
industry verticals. Emerging offerings in this area, each with active clients,
are described below:
TELECOM : TCS’s cloud-based Business Support System
(BSS) platform for communication service providers bundles TCS’ own BSS
application, back-end infrastructure and services to address challenges like
time to market, a convergent stack across various lines of business,
predictable and utility based pricing etc.
RETAIL : TCS RewardzTM is a cross-channel rewards
management solution, which helps retailers achieve deep personalisation and
ability to reward customers across all channels, for purchase as well as
non-purchase transactions. TCS RewardzTM comes along with a corporate instance,
customer portal and a mobile loyalty application for customers.
TCS NOLYNE TM :- is a service oriented architecture (SOA)
enabled, platform and hardware-independent point of sale (POS) system which
delivers to retailers the flexibility and agility needed to manage cross-channel
transactions and enables seamless customer engagement. TCS Nolyne™ includes a
cloud-enabled mobile POS solution and comprehensive store back office
solution.
HI-TECH : TCS has pioneered the development of an
all encompassing integrated application for the legal industry called Legal Management
System (LMS). LMS delivers tangible benefits to law firms and legal support
services organisations across the world. The latest release of LMS places TCS
in a strong position to achieve the challenging goals of law firms and adressess
the issues relating to compliance with emerging regulations.
MOBILITY SOLUTIONS :- TCS’s mobility solutions unit strives to
transform enterprise business processes and customer service by leveraging
mobile applications deployed on tablets and smart phones. This unit leverages
three key trends in the industry: (1) tablets liberating information technology
from the desktop (2) smartphones transforming customer service into anytime,
anywhere contextual interactions and (3) tablets becoming the latest vehicle
for attracting and retaining the most profitable customer segments. TCS offers
application development and testing services as well as pre-built intellectual
property in a licensed as well as fully-hosted business models.
TCS acquired large number of customers for its
mobility solutions offerings across USA, Canada, UK, France, Denmark,
Netherlands, Saudi Arabia, Qatar, Japan, Australia and Singapore. All the major
industry segments were represented in the services revenue growth of this unit,
with the BFS vertical contributing the most. Some of the mobile applications
developed for our customers have been ranked best in their class in popular
ratings.
SOCIAL COMPUTING SOLUTIONS :- This solution offerings include a suite
of cloud-based platforms, solutions and services around social media aimed at
(1) driving engagement and superior customer experience (2) creating value for
customer while generating new revenue and (3) improving customer contact
strategy through reduced cost and greater reach.
BIG DATA SOLUTIONS :- NextGen solutions of TCS is a dedicated
horizontal delivery unit set up in FY 2012 to help customers utilise the
burgeoning volume, variety and velocity of data (Big Data) and create value for
all stakeholders.
EMPLOYEE ADDITION :- The total gross addition of 70,400
employees as well as net addition of 39,969 during fiscal 2012 has been the
highest ever.
RISKS :- TCS
has put in place an Enterprise-wide Risk Management (ERM) programme based on
the Committee of Sponsoring Organisations of the Treadway Commission (COSO)
framework. Reports are placed before the Board of Directors at regular
intervals.
The risk categories covered under the ERM
programme includes strategic, operational and financial as well as
compliance-related risks across various levels of the organisation. This
includes risk assessment and mitigation at TCS level, business / functional
unit level, relationship level and project level.
REVENUE BY INDUSTRY :- Revenue of TCS accrue in the following major
industries: (1) Banking, Financial Services and Insurance (2) Telecom, Media
and Entertainment (3) Retail and Consumer Packaged Goods(CPG) (4) Manufacturing
(5) Hi-Tech (6) Life Sciences and Healthcare (7) Travel, Transportation and
Hospitality (8) Energy, Resources and Utilities (9) Others.
During FY2012, revenue for all industry
verticals have shown double digit growth.
In FY 2012, BFSI continued to grow at a
healthy rate of 27.44% over FY 2011 due to sustained demand. Industry verticals
which recorded high growth in FY 2012 were Retail and CPG (45.05%),
Manufacturing (37.27%), Life sciences and Healthcare (33.10%), Hi-Tech
(57.32%), Energy, resources and utilities (25.28%) and Travel, transportation
and hospitality (43.85%). Telecom grew at 17.24% in FY 2012.
In FY 2012, BFSI constituted 43.08% of
Company’s revenue (44.28% in fiscal 2011) and contributed 45.36% of total
segment result (46.74% in fiscal 2011).
COMMENTS :-
TCS is an excellent BUY from the IT Industry for Medium to long term
Investors
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