S Ramadorai TCS' CEO and MD on the benefits of the deal with Ducati

What was the rationale behind this technology deal with Ducati?
If I were to summarise, then it is our expertise in the area of process implementation and capabilities in ERP implementations that was the main driver behind this deal with Ducati. These sorts of skills are very necessary in any manufacturing or automobile company and our involvement with Ducati is centered around these skills and services. This has been one the core areas of expertise that we at TCS have developed over the last four years. This partnership is another example of the cutting edge technology services that TCS is providing to leaders in different sectors and industries. With TCS as its technology partner, Ducati’s ability to respond to customers and react to the evolving business environment will increase and help it effectively use our talent and expertise to boost its presence globally. The objective of this project is to drive quantum improvements in its supply chain management, especially in the area of forecasts, inventory levels and optimised production plans and reducing its overall logistics costs.

Does this mean an increased thrust into the automotive space for TCS?
The automotive sector has been one of the key areas of expertise for TCS and more broadly the engineering services area. When you talk about engineering services, it could be product lifecycle management (PLM), engineering design as well as improving efficiencies in terms of IT systems at the backend. We have been offering combinations of these services as well in the past. There is also a level of comfort which you get by doing business with some of these brands, which will also take us into the niche area of engineering where you not only do work in the general automotive space but also in specialised motorbikes and motor cars which are in the racing space and they take you to a different level of contribution.

Will TCS have a conflict of interest with Tata Group company INCAT?
No, we don’t see any conflict of interest but we see a lot of go-to-market strategies which we can implement together. We do partner with INCAT in a number of engagements and going forward it would only be increasing. Sometimes it may appear that we competing, but it’s good for both of to be there rather than none of us being there.

How do you view the automotive market globally and in India right now?
Today if I look at the scenario, it’s pretty bad and I think we should be prepared for the conditions to not improve in the near future. Hopefully, things may turn around next year, but today things are in pretty bad shape.

Tell us about your automotive clients?
Almost all the automotive majors are our customers; to some extent some are a little more than the others. But I think we view those as engagements which are necessary and which will have to be supported, but then we need to be absolutely sure that we get paid and that is how we will proceed.

What about opportunities in the emerging segment of low cost cars like the Nano?
Tata Motors is a classic case where INCAT and TCS will work together in some situations, even the ones where acquisitions have been made by Tata Motors. So they will help us to look at those acquisitions and see how we can work together. I think we will certainly have to compete with other companies, but there are good opportunities for us. We have been talking to all the automotive players regarding their new products.

What opportunity do tighter emissions and safety norms present for TCS?
I think clean technology and emissions are important areas and we have certain offerings in that space, both from within the automobile itself and also in the factories of the future, the emission standards, the carbon emissions, measuring the carbon footprint and improvements for that so we are working in each of these areas. This is a very big opportunity for us at TCS. Safety technology is also important but today INCAT and some of the other companies are involved in this area and we may partner with them.