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. Non-linear 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 per-person, 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 non-linearity 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.