1. Analysis & Outlook
Nonlinear Revenues – Key future growth driver for Tata Consultancy Services
Since past few years Tata Consultancy Services (TCS) has been focusing on non-linear revenue
generating businesses like Software Products (Asset Leveraged Solutions), Platform-based BPO
services (Process Clouds) and iON – an IT-as-a-service solution for small and medium
business. Nonlinear revenues delink revenue growth with proportionate headcount growth. Nonlinear revenues from existing clients can be generated through productivity-enhancing tools,
frameworks, solution accelerators and managed services engagements.One of the crucial
initiatives added by TCS is to automate some of its commoditized information technology (IT)
service lines for achieving more non-linear growth. Current product and service offerings from
TCS non-linear business model are products such as BANCS (BFSI), Rewardz and mPOS
(retail), hosted OSS/BSS (telecom), Clin e2e and Med Mantra (life science & healthcare) and
SWIFT MRO (travel); vertical platforms for industries; technology platforms like iON - a fully
integrated IT-as-a-Service (ITaaS) model for small & medium businesses; and solutions
comprising several configurable solutions and pre-built components.
TCS signed a multi-year agreement with Scandinavian Airlines (SAS) wherein TCS F&A
platform provides pre-built and pre-configured financial processes, tools that lead to rapid and
efficient implementation of solution. Solution is provisioned under a Cloud model including
infrastructure, applications, IT maintenance and multiple platform developments over the
duration of the engagement. The platform is designed to conform to the latest global statutory
and legal norms, such as IFRS and GAAP.TCS's deal with the Home Office to run the
Disclosure and Barring Service (DBS), which was created when the Criminal Records Bureau
and the Independent Safeguarding Authority came together also a major boost for nonlinear
revenue growth as the company plans to offer services with less number of delivery staff and
increase the amount of automation and digitization, which requires less people. TCS automate
internal processes and offer citizens new digital channels for services.
Commoditized services refer to back-office IT projects where firms bill customers on a perperson, per-hour basis and automation in these processes will increase productivity and reduce
human errors. TCS’s global head of human resources Ajoy Mukherjee highlighted that nonlinearity remains a focus area for the company in terms of products, platforms and consulting and
in the future, the contribution from non-linear is going to improve. TCS CEO Chandrasekaran
highlighted that the company would invest in newer areas of technology such as social, mobility,
analytics and cloud computing for nonlinear revenue growth.TCS is betting on digital as an
important growth driver and the digital unit is developing products that will improve company’s
edge in new contracts and will also take forward its nonlinear agenda. Non-linear revenue
growth can be achieved by developing intellectual property-based solutions. Currently, nonlinear
initiatives make up 10 per cent of TCS's new revenue and TCS CEO is expecting non-linear
revenue contribution to significantly improve in next three years and "It is the future business
model," he says.