Wednesday, July 4, 2012
TCS ANNUAL REPORT FOR FY 2012 SUMMARY / REVIEW (POST 2)
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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