India's Tata Consultancy to triple investment in China

DALIAN, Liaoning - Tata Consultancy Services Ltd (TCS), one of the largest software and IT service providers in the Asia-Pacific region, plans to triple its investment in China during the coming three years, the company's top management has said.

In an exclusive interview with China Daily, Girija Pande, chairman of TCS' Asia-Pacific operations, said the company will triple employee numbers in China from the current 2,000 within three years.

As the company's largest expenditure is on human resources, that plan indicates that the company will also triple its investment in China during that period, said Dong Qiqi, TCS's China CEO.

TCS, which entered China in 2002, plans to hire 70,000 people globally this year, with the number of workers in China reaching 5,000 in two and half years, according to Pande.

During almost a decade in China, TCS has achieved an annual growth rate of 25 to 30 percent, said Pande. "Besides serving its multinational customers, the company is entering the domestic market with an eye on large State-owned enterprises, financial institutions and city governments."

There are seven banks in China using the TCS proprietary core banking system, including Bank of China Ltd, Huaxia Bank Co Ltd, and the Guangdong Rural Credit Cooperative. Shanghai's Foreign Exchange Center uses a newly developed trading system built by TCS.

Building IT architecture and applications platforms for newly developed "intelligent" cities amid the country's fast-growing urbanization process is a new growth engine for TCS in China. The company will be investing $6 million to establish a lab in Singapore to fuel research and development in intelligent city applications, where cloud-based technologies will be introduced to improve the city's operational efficiency and save money.

"It is the first lab of its kind for TCS globally, and we will introduce similar techniques in other Asian countries once it succeeds in China," said Pande.

TCS has started an intelligent city project in Ningbo in Zhejiang province, said Pande. The project is focused on e-education and smart health projects.

Meanwhile, TCS is also looking at expanding to other centers in second- or third-tier cities, such as Dalian, Chengdu and Chongqing, because of the better availability of talent and lower labor costs. The company already has delivery centers in Beijing, Shanghai, Hangzhou, Tianjin and Shenzhen.

Pande said talent management, including hiring and retaining talent, is the biggest challenge for TCS in China.

"Compared with other countries, TCS has a higher attrition (rate) in China, because there are many more opportunities in the world's second-largest economy," said Pande.

Rising labor costs, combined with an appreciating currency, is another concern for a company that exports business services from China.

"At the entry level, basic costs may be the same (in India and China)," he said, adding that the cost of social security for workers is about 20 to 30 percent higher in China than in India.