TCS snaps at Accenture heel on headcount [Financial Express (India)]
(Financial Express (India) Via Acquire Media NewsEdge) Tata Consultancy Services (TCS), largest Indian software services provider, is closing in on Accenture to become the world's second-largest IT company in terms of headcount by the end of this financial year. The Mumbai-headquartered IT major has already raced ahead of its Indian peers in the last few years in size.
TCS had 2.27 lakh employees on its rolls as of last December. Going by its hiring rate, it is set to touch a record 3 lakh by the end of this financial year. Accenture, on the other hand, had a headcount of 2.46 lakh as of February this year. IBM is the biggest of the lot with a global headcount of 4.5 lakh.
The picture will become clearer when TCS announces its earnings on Monday. The company did not respond to an FE query seeking its comment, as it is in the silent period. An Accenture spokesperson told FE in response to a query: "Accenture said in its 2Q FY12 earnings that they continue to expect to hire more than 60,000 people around the world this year."
The business model followed by the Indian IT services companies is based on linearity, i.e., every increase in revenue is directly proportional to the number of people they add. Staff strength, thus, is an indicator of the health of the company's business. It has to be noted, however, that TCS is no match for companies like IBM and Accenture in terms of revenues.
At the same time, TCS has quietly and rapidly expanded in almost every geography much before its Indian peers.
Industry observers believe the heritage of the Tata group with worldwide operations has helped TCS build an organisation of such scale and diversity. It is the only Indian company which has won two billion-dollar outsourcing deals in the last five years - one was $2.2 billion dollar deal with Friends Life in the UK and other a $1.2 billion contract with ACNielsen. It is the only Indian IT company to keep its head above water, even during these troubled times.
SD Shibulal, CEO of Infosys, TCS's toughest Indian rival seemed to offer a neutral stance on the Mumbai company's growth strategy. "We respect our competitors and they keep us on our toes," he said adding, "every company has its own strategy and we have clearly articulated our plans." As on date, Infosys and Wipro have 149,994 and 136,734 employees respectively.
TCS' growing global ambition reflects very clearly on its market share in the international IT services market. According to Gartner, in 2011, the overall global IT services market expanded 7.7% to $844.5 billion from $783.9 billion in 2010. "The most notable movement in the top 20 was TCS moving from the No. 21 position in 2010 to the No.16 position," it said.
At the same time, many Indian companies realise that chasing growth by merely adding staff could be counterproductive in the long run and they are looking at building non-linearity in their business through product play and consulting.
Copyright 2012 The Indian Express Online Media Pvt. Ltd., distributed by Contify.com
Credit: P P Thimmaya
(c) 2012 The Indian Express Online Media Pvt. Ltd., distributed by Contify.com
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