TCS leads Indian peers, says global survey

Clients see Tata Consultancy Services (TCS) as the only local information technology (IT) company strong on two important parameters, implementation and innovation, said a study.

It was conducted by America-based HfS Research and KPMG last month. The annual survey, state of services & outsourcing, covered 312 global clients, 347 advisors and consultants, and 420 participants from the companies that manage IT and business operations.

“IT-outsourced service providers, such as TCS, are leading the way in terms of buyer perceptions, both on innovation and execution, relative to their peers,” said Charles Sutherland, executive vice-president of research at HfS Research.

The country’s second- and third-largest in the sector, Infosys and Wipro, respectively, were seen as strong on implementation but weak on innovation. This could mean if their areas of execution become less significant, these may become candidates for churning, the report added.

Smaller companies iGate, Xerox, Fujitsu, Unisys and CSC scored low in the survey. “For these, the task ahead is to increase awareness of their capabilities and, in particular, to highlight investments in innovation,” said Sutherland.

Almost half the survey participants said they would look at switching their existing IT service providers for several reasons. While 15 per cent said they planned to do so at the renewal cycle, 12 per cent said they planned to move some or all of the outsourced work in-house. As many as 23 per cent said they wanted to switch their provider but were still working through the practicalities of doing so.

“Some of this (dissatisfaction) may be the result of long-standing contracts where it is harder to repeat the level of savings initially achieved and booked for first-generation contracts,” said Sutherland. "But when combined with the results of a perception study of the IT outsourcing service providers, it may be that the larger issue is the market is increasingly fragmenting and certain providers (specially some entrants like Amazon and Google) are just changing the market at such a speed, that a new level of dissatisfaction with the previous status quo is setting in.”