TCS to expand centers in N.America; CY12 focus on Japan

The India IT industry has been through a series of changes in the last couple of years, but the future and the outlook is a dilemma of dynamics. At TCS' Cincinnati campus, CNBC-TV18's Krithika Saxena catches up with two gentlemen who have not only seen the slow down and the problems of 2008, but have also managed to steer their company away from the stump. Check out what N Chandrasekaran, chief executive officer and managing director of TCS, and Surya Kant, the president of the North America business of TCS have to say about staying abreast of the changing times.

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: There seems to be one trend where people are now changing the onshore-offshore mix. Give me a sense about how the offshore change has been affecting TCS?

Chandrasekaran: It's a business model. The Global Network Delivery Model (GNDM) that TCS has pioneered and has practiced for years is about bringing the right talent for the right engagement in a cost effective manner to deliver solutions to customers. This has become a mainstay, and we continue to leverage this model. Previously, it used to be very India centric; now apart from India, we have also added other countries in our mix.

Q: You have been interacting with clients who are here. You are heading the North America business. Given the current regulatory environment, how will the offshore and onshore mix evolve in the next say five years?

Surya Kant: The business has to look at the current situation and evolve according to the current situation. So what we have been looking at is what is the best for the customers, keeping in accordance with the GNDM. So the way I see it playing out is that we would have more delivery centers here in North America which would be focused on certain technologies and certain functions which are closer to the customers.

Q: You have been increasing local highs over here, over the last one or one and half a years. Give me a sense is it entirely wrong to say that this largely owing to protectionist concerns?

Chandrasekaran: The first point I want to tell you is that it is very difficult to do any single activity which is not integrated with the business model. We will continue to hire people locally, but it will not be to overcome a particular sentiment because in the manner of speaking, it is important that whatever we do, it's fully integrated. So we will have a good number of people hired in the local market but we will continue to grow in India as well and we will continue to grow in Mexico, China and other parts of the world. But it would be fair to say that all the people who would be working in the United States will not be on Visas. We will always have a mix of people who are hired locally, who have come onboard from India because they need to go back to India because the project situation demands that... so it will be a mix. We will continue to increase the local persons both in terms of talent and also in terms of centers like the Cincinnati campus.

Q: What kind of impact would this have on margins?

Chandrasekaran: At the end of the day, I have always said that the growth rate and the margins that you want to build your business in is very much dependent on the commitment you have to build that particular metric. IT services business is a technology business. We are in the area of continuously investing and learning the new technologies ahead of the curve in order to be able to take our solutions to customers. If we don't operate with a good margin, it's very difficult to invest ahead. So I firmly believe that we will continue to operate with a healthy margin in this business. So the business model that we deploy, will very much take into account the margin.

Q: Give me an idea about the kind of local talent that you will be hiring for FY12, what are the numbers?

Kant: We have been hiring about 1200 people, that's the number for the campuses, and then for the work that we have from lateral market another 800 people or so. So it's about 2000 people that we are looking at.

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