As the man responsible for Tata Consultancy Services (TCS) operations in the UK and Ireland — which together contribute about 20.1 per cent (Q3 06) of the company’s overall revenues — AS Lakshminarayanan, popularly known as Lakshmi, is quite a legend in Britain’s IT world. TCS has seven offices in the UK and Ireland, and employs over 3,000 professionals,working for some of the region’s leading corporations. Lakshmi who joined TCS in 1983, has experience in IT consulting and management with clients all over the world. He has lived and worked in Australia, Hong Kong and the US, besides India and the UK.

Since 1992, Lakshmi has focused on the company’s UK clients and operations, initially helping to establish TCS in Bristol and the West County.He subsequently spearheaded the establishment of client relationships with AXA Sun Life,CMIG Bristol, British Airways and London Electricity. The AXA Sun Life migration project was awarded a British Computer Society citation in 1993. He also initiated and led TCS’s global insurance practice until 1999, when he took over as country manager in the UK.

During his tenure as country head, Lakshmi has achieved a major expansion in business by focusing the organisation on the needs and concerns of existing customers in long-term partnerships. He steered TCS’s entry into the UK public sector and has been personally involved in the company’s corporate social responsibility programme, supporting the activities of institutions such as the Confederation of British Industry, the British Computer Society, the Prince’s Trust and Business in the Community.

Lakshmi has a degree in electronics from BITS, Pilani and is a long-standing member of the IEEE Computer Society and the British Computer Society. In an interview with Christabelle Noronha, he spoke about TCS UK, on the challenges of operating an outsourcing operation internationally, and about building an IT brand in Britain. Excerpts:
 

Against India-based competition we have been doing very well; in fact, the lead has widened over the past few quarters. Compared to international companies, only Accenture gets more mention than us in the UK marketplace. So, from a brand perspective, there is considerable awareness being created about TCS.

Currently, the focus of our communication is ‘TCS at the forefront of innovation’. This was the theme at our customer event this year. We will also be sponsoring an innovation award as part of ‘Business in the Community’, a charitable organisation whose patron is Prince Charles. But that’s not all. We are launching our innovation lab at Peterborough, and we already have a TCS innovations blog.

How do you differentiate yourself from the competition?
From a brand perspective, we want to be known as a company that takes up larger and more complex projects, as people who execute and deliver extremely well and bring a much higher level of certainty to what we deliver than any other service provider can. In doing this we
provide a higher order of value to our clients. In the IT world in the UK, it’s common to hear about IT projects failing or not being completed in time. In contrast, TCS customers know that we deliver well, and that’s what they tell others. So that’s a very valuable proposition.

There is a lot of systems integration work happening which is transformational in nature and goes much beyond traditional applications in the UK. Other than Pearl, which is also transformational, one other example involves a water company. Our implementation of an ERP solution is helping them transform their customer services and helping them to move to the top quartile. Another contract was with a major telecom company, where we executed a very large, enterprise-wide programme, quite transformational in nature. More and more, we want to be associated with these kinds of challenging projects, where both our consulting and IT skills are brought to bear.

In recruitment, how is the TCS brand perceived in the UK?
We have a large presence in the UK. Our brand equity helps in recruiting experienced professionals. But ”recruitment at entry level from universities needs further promotion of the brand. We engage with certain specialised universities when we go out to recruit entry-level employees, though the overall numbers are small.

Recruitment here is primarily focused on building a larger consulting presence in the UK, and the consulting team comprises people who can engage with the customer to help them achieve transformation, optimise their IT and provide a technology road map to achieve their strategy. The other focus of recruitment is on programme managers who can handle large and complex programmes.

But the bulk of our recruitments are still done in India. We bring people for specific projects, because the mobility of people is critical in our Global Networked Delivery Model. Our people come here, understand the requirements, engage with the client and help take work back to the offshore centre.

Does the bulk of your clientele continue to be from the finance and banking vertical?
Traditionally, banking and finance have been strong areas for TCS and it continues to be so. But we have a good number of insurance and telecom clients too. The utilities and energy sector and travel and hospitality are other strong sectors for us in the UK. We are also making very good headway in the retail sector. The emerging areas with strong focus are the public sector, healthcare and life sciences.

What about industries like media and entertainment?
We have clubbed them with telecom and media, because there is more and more convergence happening on that front. There are a few media and entertainment companies that we are working with and a few manufacturing clients as well.

What are the challenges of the UK market? How does the government react to the setting up BPOs for instance?
Government policy has been fairly stable and supportive of the fact that companies like ours contributing to the UK. They recognise that delivery is something valuable, and that going it helps corporations in the UK to be more competitive. They understand that protection sort is not healthy in the long run. Of course, sensitivities when outsourcing that one needs conscious of and be able to manage effectively.

Call centres are prone to such sensitivities and TCS is positioned in a way that we can clearly say: ‘Call centres are something we are not into." If we have to execute a complete business process and call centre capability is an essential part of it, then only will we take it up.

Business conditions in the UK are very favourable. The challenge is how you make the most of the opportunities that exist; how you win the kind of business that you want; how you build talent and, finally, how you continue to execute projects well for customers. Those are the essential challenges. I don’t think there are any policy barriers from the country perspective. Ireland is a different story; movement of people is still not freely allowed, and getting visas is not easy. In contrast, the UK has a favourable climate and is a buoyant market.

Are you also selling products?
We are focusing on product solutions in the banking and financial services market. We haven’t been marketing them as aggressively as we should, but it is in the plan for this year. However, we have had good successes: we implemented solutions based on the Quartz banking platform, for a fund manager at Isle of Man and for a major investment bank and our custody product, NCS, runs in several banks.

What are the revenues of TCS UK and what is the percentage of new business compared to repeat business?
Overall about 20 per cent of TCS revenues are from the UK & Ireland. In the UK, as elsewhere in the globe, we more or less follow the standard TCS global figures, where around 95 per cent of the work we do is repeat business from existing clients.

Tell us about your association with Pearl.
Pearl actually comprises a number of brands under which insurance was sold. They are not selling any more policies — that’s why it’s called a closed book — but having sold life policies one needs to maintain and manage them. So, the dynamics of closed book funds is such that they need to manage costs better, so they can give better returns to their policyholders. That is the main driver for outsourcing.

Why did they choose TCS?
TCS and Pearl had been working together for more than a decade and they had a level of trust that if we promise something we will always deliver it. Beyond trust, our proposition involved simplifying IT platforms and business processes. We baked all these efficiencies into the pricing model, so the whole proposition was very attractive. But I don’t think price in itself was the deciding factor. Trust, the ability to execute, and global backing in terms of manpower and IT capabilities all counted. It is an outsourcing contract, with the final deal at about £480 million ($940 million) and is structured over a 12-year period, and subject to further extensions.