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TCS bets on Business 4.0 to push digital revenue to over $5 billion this year

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India’s largest IT services firm TCS is betting big on its ‘Business 4.0′ strategy to propel its revenues from new age-technologies like automation, cloud and Internet of Things (IoT) to over USD 5 billion this year.

Speaking to PTI, TCS CEO and Managing Director Rajesh Gopinathan said Business 4.0 is thought leadership framework to help customers leverage digital technologies to address their growth and transformation agendas.

“There are many components to digital technologies, there is cloud, automation, analytics, IoT. People have been looking at various technologies, each of which is powerful and valuable in its own right but the point has been how do you stitch it together to help businesses,” he said.

He added that Business 4.0 provides an integrated and holistic framework to help customers address issues and focus on growth in an agile manner.

Gopinathan said the “digital opportunity” globally runs in the billions as these new technologies are becoming increasingly entrenched across the table at an enterprise.

“Last year, we had crossed $3 billion (in digital revenue)…It has grown 35%, it has grown faster than it had grown last year. We have crossed $4 billion in digital revenues… Run rate-wise, it is close to $4.7 billion,” Gopinathan said.

He added that digital revenues would be well over $5 billion this year for the Tata Group company.

For the quarter ended March 2018, TCS’ revenue from digital engagements accounted for 23.8% of its overall revenues, growing at 42.8% year-on-year.

TCS posted a 4.4% growth in net profit at Rs 6,904 crore, while its revenue was up 8.2% to Rs 32,075 crore in the March 2018 quarter. For the full fiscal, its revenue rose 4.3% to Rs 1.23 lakh crore.

Asked if the company would look at acquisitions to strengthen its play in the digital space, Gopinathan said while TCS is “always open” to such deals, it would not rely only on inorganic routes.

“Our story is not dependent on acquisitions to kick-start or accelerate this, we are executing beautifully. If we find the right acquisition at the right time and right price, we will go ahead, we are always in the market,” he said.

Asserting that TCS is not a “desperate shopper”, he said the company is very selective in acquisitions. “…that is why, all our acquisitions have delivered value. We have never had to roll back any acquisition,” he said.

TCS Chief Operating Officer N Ganapathy Subramaniam said Business 4.0 has worked for the company and that the strategy has the potential to drive large-scale transformation across sectors like retail, travel and hospitality, utilities etc.

He added that there has been a steady increase in the number and size of digital assignments clients are providing.

In FY2018, over 2.45 lakh TCS employees were trained on digital, and more than 2 lakh employees have now been trained at various stages of ‘Agile’ methodologies

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