Toyota Financial Services (TFS), a subsidiary of Toyota Motor Corporation, has selected Indian information technology (IT) major Tata Consultancy Services (TCS) for legacy IT system maintenance for its operation in the US.

Announcing this, George E Borst, president and chief executive officer of TFS, said this was the first time the company would be outsourcing any IT job.

"We chose to outsource to reduce cost. By outsourcing to TCS, we hope to record 50 per cent savings. Moreover, at a later stage there is also scope for process improvement," Borst said.

Ajoyendra Mukherjee, vice-president of TCS, said the maintenance work would be carried out entirely out of Kolkata operations.

"We have 1,800 staff here. For this particular project, 50-60 people are working right now. But this has to be increased further," he said.

The contract is for 36 months but it can be extended further. TCS has been on the job for sometime doing the work onsite. The offshore operation started from Thursday.

Globally, TFS has businesses valued at $24 billion a year of which the US operation contributes 60 per cent.

Borst informed that TFS does over 1.5 million financial and insurance contracts every year and IT-enabled services to serve its customers better.

TCS was one of the seven bidders for the job for which other Indian outosurcing companies along with few outfits from north America fought.

"TCS won as they have global presence and its culture similar to us. We were looking for an IT company which not only does process outsourcing but can also improve the process itself," Borst said.

Shaun Coyne, vice-president and chief information officer of TFS, said the company was exploring the option to replace five major systems in the future.

The fund would be raised from productivity gain and savings by outsourcing operations.

"We may move into an open architecture and component driven system," Coyne said. TCS, along with other Indian companies, would vie for a slice of the development job in the next phase.

TFS is a service mark that acts as an umbrella brand name to market the products of Toyota Motor Credit Corporation (TMCC) and Toyota Motor Insurance Services (TMIS) and Lexus Financial Services.