TCS chief says analytics business rakes in $2 bn annually

The analytics business of Tata Consultancy Services (TCS), the country's largest IT services firm, contributes $2 billion (Rs 12,800 crore) in revenue annually, the company's chief executive Rajesh Gopinathan has indicated to The Economic Times.

TCS recently moved its Business Process Outsourcing (BPO) head Dinanath Kholkar to run the analytics division. The BPO business brings in around $2 billion in revenue every year.

“Analytics in itself will be equal to the portfolio Kholkar was running earlier,” Gopinathan was quoted as saying by The Economic Times. "Analytics was distributed across a very wide set and once we are done bringing it together, we will have to think how we report it and all, but we run probably one of the largest analytics groups."

Gopinathan said that a $2.5 billion deal with performance management company Nielsen for analytics had contributed to the growth of its business.

According to the report, TCS has for the first time said that it earns nearly 22% of its revenues from digital, with analytics contributing the largest share to this segment. Rival Accenture which rakes in more than half of its total revenues from newer technologies.

Data analytics allows businesses to understand how, when and where people consume certain goods and services. It is also used as a predictive indicator for future customer behaviour.

Gopinathan has rejigged TCS' businesses since taking over early last year when his predecessor, N Chandrasekaran, was appointed chairman of the Tata Group.

As part of the reorganisation, Gopinathan joined individual service lines into three categories - cognitive business operations, digital transformation services and consulting service integration. 

He also divided service lines such as application development and maintenance into smaller divisions such as enterprise application services, cloud applications, microservices and APIfication. 

The rejig also saw formation of a new unit under cloud infrastructure and three other digital entities including Internet of Things (IoT), automation and analytics were also formed. 

TCS' head of engineering services division, Reguraman Ayyaswamy, and former infra services division head, PR Krishnan, were tasked with leading IoT and automation respectively.

“They are still building out their organisations and go-to-market and so forth but early success is strong and it really is bringing it all together,” Gopinathan was quoted as saying. "IoT and automation are quite new essentially; we are building it up from bottom up. Analytics is the larger piece."

In a separate development, London-based branded business valuation consultancy firm Brand Finance has ranked TCS as the fastest-growing IT services company. The annual report analyses the brand value and brand strength of the 5,000 largest brands across 38 sectors in the world to reach its rankings.

According to Brand Finance IT Services, TCS currently has a total brand value of $10.391 billion – a growth of 14.4% from last year’s total of $9.081 billion. 

It marks the fastest incremental growth of all companies in the industry, and places TCS in the top three most valuable brands in the global IT services sector along with IBM and Accenture, the brand valuation firm said.

"TCS’ forward-thinking approach to digital technologies, its growing brand presence in its key markets, paired with its core values of customer service, employee development and re-skilling has seen its brand value grow exponentially," said David Haigh, CEO at Brand Finance.