TCS to set up separate biz unit for BPO services
SOURCE: EconomicTimes
DATE: June 20th, 2008
Mohit Soapbox:
The Platform BPO comes up again. For Indian BPO layers building domain expertise and moving away from FTE based growth is critical and companies are looking at multiple ways to do so. Eventually these firms should be less of a BPO provider and more niche vertical providers with the platform and the industry knowledge.
Tata Consultancy Services (TCS), which has announced two major business units focused on decreasing revenue dependence on employee addition, is set to announce a third business unit that could be its largest in terms of business potential at least in the immediate term. The third business unit will be focused on offering platform-based business process outsourcing (BPO) services that the company has been working on for sometime now.
The other two business units are financial products and IT-as-a-service (ITaaS) for small and medium-sized businesses. Financial products are a fairly mature segment but TCS continues to invest in building solution and products for financial services industry. It was spun off as a separate business unit to give it more focus and differentiate it from the IT services it provides to financial services clients.
ITaaS is a more recent initiative to tap into businesses that are in the growth stage and may potentially be tomorrow’s billion-dollar firms. It is being piloted in
Platform-based BPO services will be the third initiative in the area of de-linking revenues from employee addition. The investments in developing a platform are made upfront and the services to the customer are based on the outcome and number of transactions, making its similar to a product-based revenue model.
“Platform-based BPO is still an emerging area. There are no proven success stories but that is the way forward to de-link revenues from manpower. Large deals such as the TCS-Peal deal and Infosys-Philips deals can be a base for creating a platform. If you count transactions such as these, about 20%-25% of IT and BPO exports could be coming from platform-based BPO services,” said Forrester Research country manager (
Mr Apte said the business potential of platform-based BPO was significant because its scope was wider than IT services, which is limited to the IT needs of clients. Building a platform is a fairly intensive effort and can take a company upwards of 6 months. A platform for payroll processing, for instance, would need to incorporate country-specific taxation practices and other regulations governing payroll. Some platforms may require being industry-specific and need to incorporate details and nuances-relating to the industry.
One of the platform-based initiatives that TCS is learnt to be working on is in the area of human resource outsourcing. The other is likely to be in claims processing or F&A. While its ITaaS business unit currently has around 400 employees, the platform-based BPO business unit could have more than 1,000 employees.
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