TATA INFOTECH Tough Going

Tata

Infotech Ltd (TIL), a technology player in diverse markets, did not have the

best of times in the last fiscal. It registered a growth of 10% with a turnover

of Rs 432 crore as against Rs 392 crore in the previous year, but witnessed a

decrease in the net profit from Rs 47 crore in fiscal 1998-99 to a mere Rs 12

crore in the last fiscal. This can be partly attributed to its break-up with

Unisys, which has become more of a services business. The other factor that came

into play was the reduced spending on systems due to post-Y2K blues. Hardware

contributed Rs 29 crore while software made up Rs 190 crore. Exports raked in Rs

220 crore.

The

company offered a wide portfolio of services and technologies, and entered into

third-party alliances during the last fiscal. Some of these activities included

systems integration, software consultancy and development and collaboration in

advanced technologies. TIL also distributed international software and hardware

products and education services.

Exports

constituted 50% of the overall revenue, the US being the main destination,

raking in 55%. Europe followed with 17%. Exports to Japan and Asia-Pacific were

negligible. For the US market, TIL tied up with Human Factors targeting such

vertical industries as telecom, finance, commerce and healthcare. It also

successfully implemented documentation, security and encryption tasks for the

tax market in the US.

TIL offered services through its four

major divisions–systems integration, products, education services and

manufacturing services. Systems integration generated only Rs 11 crore towards

the total domestic revenue of Rs 65 crore. The products division marketed

directly to end-users and indirectly through channel partners. TIL had a network

spanning more than 200 partners across the country. It actively focused on

developing relationships with its partners, and has plans to invest in the

latest technologies.

Another area of strength for TIL was

corporate training, which generated all the revenue TIL earned from training–Rs

41 crore. The company is planning to focus on online and distance learning,

which will be integrated with the traditional mode of training. It is also

looking to make education a more independent activity.

Leveraging on its core strengths, TIL

undertook some major projects in fiscal 1999-2000. One of its business alliances

was with Kale Consultants to offer its customers integrated support decisions.

Under the agreement, TIL would integrate decision support tools for businesses

with Kale Consultants’ business applications and datawarehousing applications.

To cater to the needs of the banking

sector, it signed an agreement with the US-based internet solutions company,

Solution NET International, to market its ENet corporate internet banking

product in India. It also undertook the task of manufacturing automated teller

machines (ATMs) for Wausau Financial Systems in the international market. It

would market the ATMs under its brandname in India.

In the last fiscal, some of TIL’s major project

implementations were for the Defense, VSNL, DoT, Indian Railways, the Reserve

Bank of India and the Union bank of India. In the coming year, TIL is likely to

make a lot of action happen in the systems integration arena, with the

application service provider model being one of the target areas, along with

IT-enabled services and other internet technologies. D