China is long term play, says TCS chief

TCS has gone ahead and entered China, setting up the Tata Information Tech Shanghai Co, a Tata Sons subsidiary, in June. According to TCS chief Ramadorai, the plan is to "position ourselves as a major IT services provider in China".

TCS is the largest IT services company in the Asia-Pacific region but the region's market currently accounts for just 5 per cent of revenues. But that could change, with the China growth engine as well as big domestic projects coming up in India.

Speaking to Dataquest, Ramadorai said that China was a long-term play not a quick opportunity. But it's a "very critical part of any global strategy, both for its market and for their ability to go out and reach the world. Look at how they've dominated manufacturing for the world."

Entering China is also a de-risking step. "The best de-risking strategy is to enter a market before others and get yourselves well-entrenched," Ramadorai says. And the shift of global manufacturing to China presents a large opportunity for IT services within China.

TCS chose to take the route of getting some projects from GE China before setting up an office there. TCS is set to expand its China presence through a three-pronged approach. The office in Beijing will undertake marketing activities for TCS' China operations and will handle client relationship management, public relations and legal areas, in addition to providing support to the North East and Northwest regions. In Hangzhou, TCS will set up a development center, which will provide end-to-end services for clients over the Asia Pacific region, in coordination with TCS' delivery centers in India. The development center will be set up within three months, and will have about 150 people within a year.

TCS says in a new market like China, progress can be made only in small increments, despite its leadership globally. Says Ramdorai, "Build credibility in small increments and then scale up. The market will accept you". Competition is bound to come in many forms. Chinese companies, multinational IT service companies, Indian companies, they will all compete for the Chinese domestic market as well as use China as a development resource base.

Ramadorai also has another bond with China. The Shandong province in China has honored him, naming him the "consultant to the province". Shandong enjoys the vantage point of being a global manufacturing base for white goods, a logistics center with a seaport, and a buoyant tourism industry. The combination is unique, and Ramadorai will be advising the province's authorities about leveraging systems and technology capabilities to make it an area of excellence.

(CNS)