April 19, 2005 12:02 PM PDT

Indian outsourcing firm rakes in $2 billion

MUMBAI, India--Tata Consultancy Services, India's No. 1 software maker, announced on Tuesday annual revenue of $2.24 billion for the fiscal year but said growth was flat in the final quarter.

Net profit for Tata's fiscal year, which ended March 31, was $510 million, up 38 percent from the previous year, the company said. However, revenue growth was flat compared with the third quarter, TCS officials said. The company employs about 45,000 workers in India and at its offshore operations.

The lower-than-expected last-quarter results of the Mumbai-based outsourcing company follow the first-quarter guidance issued by another leading software company, Infosys, last week.

The lower earnings of Indian software companies are being linked to a slowdown in business due to compliance issues in the U.S. TCS earned almost 60 percent of its revenue from North and South America in the year ended March 31, compared with 62 percent in the previous year. About 14 percent of its international revenue came from one American client, General Electric, alone. This is down from the 14.8 percent revenue it earned from GE last year.

TCS attributed the shrinking revenue from the American market to its strategy to focus more on European markets. The company, which faced opposition in the U.S. in the past, has diversified into new markets, including China. Last week, Chinese Prime Minister Wen Jiabao visited the company's software factory at Bangalore.

"The challenges we face are to address effectively concerns relating to security and protection of clients data and intellectual-property rights, ensure a smooth transition of work from offshore to onshore, and manage our attrition rates carefully so that work flow is not affected," CEO S. Ramadorai said at a press conference.


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Offshore Talent....
... is a rare commodity. Also rare is offshore talent who actually
understands your language. India and the US tend to use the
same words, but not the same meaning, so just about the time
you think the supoport person understands your problem, you
find yourself having to start all over again. The offshoring
process might work better with an obviously foreign (to India)
language like Chinese.

In the meantime, if the support isn't in the US, I'm not very likely
to use the support........ or the product.
Posted by Earl Benser (4310 comments )
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Brotha! Keep up the preaching! Offshoring sux!
Posted by (14 comments )
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