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