13 Feb 2009 Delhi:Tata Consultancy Services (TCS), the country’s largest software services firm, will conduct a greater scrutiny of outsourcing deals in the market to evaluate the prospective clients’ ability to make payments, its CEO said. TCS had recently seen one of its clients, Nortel Networks, file for bankruptcy.
“We will qualify the deal pipeline much more to see the clients’ ability to pay back,” TCS chief executive S Ramadorai said. He added the outsourcing market continues to see a healthy dealflow. Telecom equipment maker Nortel filed for bankruptcy protection in the US and Canada last month. Apart from TCS, other Indian IT firms such as Wipro and Infosys counted the Toronto-based firm among their clients.
“You’re going to witness such events. There will be worry about receivables — whether they are protected or not — and terms of payment will be closer to what you want,” Mr Ramadorai said. He added that the uncertain economic environment will lead to shorter payment cycles of 15-30 days, against 30-60 days earlier. The global economic crisis has led to a slump in demand for IT services such as those provided by TCS.
Mr Ramadorai said that it was clear that customers will cut IT budgets
for the year 2009.
TCS is now looking at other growth opportunities. In the US, the world’s largest IT services market which is in the midst of a recession, the firm is investing in capabilities to cater to areas such as healthcare, infrastructure, Web 2.0 technologies such as Software-as-a-Service (SaaS) and green IT.
Similarly, it is looking to tap onto small and medium enterprises and verticals such as aerospace and manufacturing in markets like France and Germany. TCS is also eyeing the banking, telecom and government verticals in the Asia Pacific region.
As its customers ask for more work for lower prices, TCS is looking at improving its internal efficiencies. This means a tighter performance-appraisal system and tweaking its hiring model. Like other IT firms, TCS used to offer jobs to college students at least a year before their courses finished. In a bid to match the talent supply to demand and reduce its bench strength, the firm has decided to hire freshers closer to their date of joining.
The company has written to engineering colleges about its intention to hire students in the seventh semester of their 8-semester graduation course from next year. TCS has frozen lateral hiring unless it requires someone for a specific function, Mr Ramadorai said.
Source:
http://economictimes.indiatimes.com/TCS_plays_safe_on_outsourcing_deals/articles
“We will qualify the deal pipeline much more to see the clients’ ability to pay back,” TCS chief executive S Ramadorai said. He added the outsourcing market continues to see a healthy dealflow. Telecom equipment maker Nortel filed for bankruptcy protection in the US and Canada last month. Apart from TCS, other Indian IT firms such as Wipro and Infosys counted the Toronto-based firm among their clients.
“You’re going to witness such events. There will be worry about receivables — whether they are protected or not — and terms of payment will be closer to what you want,” Mr Ramadorai said. He added that the uncertain economic environment will lead to shorter payment cycles of 15-30 days, against 30-60 days earlier. The global economic crisis has led to a slump in demand for IT services such as those provided by TCS.
Mr Ramadorai said that it was clear that customers will cut IT budgets
for the year 2009.
TCS is now looking at other growth opportunities. In the US, the world’s largest IT services market which is in the midst of a recession, the firm is investing in capabilities to cater to areas such as healthcare, infrastructure, Web 2.0 technologies such as Software-as-a-Service (SaaS) and green IT.
Similarly, it is looking to tap onto small and medium enterprises and verticals such as aerospace and manufacturing in markets like France and Germany. TCS is also eyeing the banking, telecom and government verticals in the Asia Pacific region.
As its customers ask for more work for lower prices, TCS is looking at improving its internal efficiencies. This means a tighter performance-appraisal system and tweaking its hiring model. Like other IT firms, TCS used to offer jobs to college students at least a year before their courses finished. In a bid to match the talent supply to demand and reduce its bench strength, the firm has decided to hire freshers closer to their date of joining.
The company has written to engineering colleges about its intention to hire students in the seventh semester of their 8-semester graduation course from next year. TCS has frozen lateral hiring unless it requires someone for a specific function, Mr Ramadorai said.
Source:
http://economictimes.indiatimes.com/TCS_plays_safe_on_outsourcing_deals/articles
