TCS gets about $300 million of its total $19.1 billion annual revenue from other Tata companies including Jaguar Land Rover<\/a>, Tata Communications, Tata Global Beverages<\/a> and Tata Cliq. Chandrasekaran’s diktat would significantly increase business for TCS from the nearly 100 companies within the 150-year conglomerate.
Aarthi Subramanian, Tata Group<\/a>’s new chief digital officer, is already working with the CEOs of all Tata companies to identify businesses that can be grown digitally and functions that can be made more efficient with the help of technology. Subramanian, who joined Tata Sons last year from TCS, where she was a board member, is also exploring whether the group can enter newer sectors digitally and develop technology platforms. “TCS will play a major part in Tata Group’s digital transformation. We are going to work with them on many of our digital projects,” said a senior Tata Sons official, who did not want to be named.
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Tata Sons declined to comment. “Every company is investing in digital, creating senior management positions at digital. The group is also doing a similar thing. There is a chief digital officer, there are lot more engagements. We are participating in that opportunity equally compared to any other industry,” TCS chief executive Rajesh Gopinathan said, but did not specify whether the engagement with Tata Group is increasing.
In January, TCS appointed its India banking country head, Pankaj Gianani, as the business unit head for Tata Group Relationship. In the new role, he is responsible for managing TCS’s relationship with all Tata Group companies across sectors.
Aperson with knowledge of the developments said that while TCS always had a dedicated team for Tata Group sales, the unit had been beefed up over the last few months. “The Tata Group IT spend is considerable and if TCS can ensure they get a significant portion of it then it will boost growth. The question for TCS is how to ensure they get the business with the best margins,” this person said.
A typical thumb rule is that a company spends about 2% of its revenue on IT. Applying that to the Tata Group implies $2 billion in technology spending a year across the conglomerate. Chandrasekaran, who took charge as Tata Sons chairman in February last year, has repeatedly said Tata Group leaders must cut through the verticals and collaborate with their counterparts from other Tata companies to benefit from the scale of the group. He recently created a position of a Synergy Officer to cut down on costs and improve efficiency within multiple Tata companies.
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