From the Europe debt crisis among its clients, TCS CEO sounded optimistic when during an interviews that TCS had not seen an impact from the Europe dent crisis among its clients. Particularly since the company’s multi-million dollar UK outsourcing contract with PADA appears to have been in jeopardy. Overall, from an economy overview, they have not seen any impact of the current European situation on any of their clients. The report from Ovum indicated that budget cuts by the current UK government will likely see a number of Information Technology outsourcing contracts renegotiated, including the 600 million pound contact for pension administration between TCS and the Pensions Administration and Delivery Agency.
With a consortium led and companies Serco, Accenture, Detica, QinetiQ, Capgemini and Groupe Steria, the UK government made a move to cancel the 750 million pound e-borders contract with a consortium led. In a previous article, the contract which had been announced March of the year is for the low cost pension scheme. Nest or the National Employees Savings Trust administration services. The contracts is divided into two stages for ten years with the possibility of an extension and covers services like employer participation member enrollment, collection and reconciliation, cash management, accessing pension savings and administration of accounts.
The UK general elections and even after the previous government had promised that no long term contracts would be signed before the next administration comes into office, the contract had already received criticism before as the deal had been signed just before. In following the general elections, there had also been some talk of some government contracts that would potentially face scrutiny over the coming months which has included the TCS PADA deal. There has not been an official word from the UK government on the fate of the deal but odds are considering the $235 billion budget deficit that the government faces many large contracts will be evaluated to determine where the government can scrimp on the dollars.
Over a week ago, this news comes after the company had reported stellar results a little in a better than expected quarterly results report. In the quarter, the company posted that its net income gained 21 percent to $394 million beating analysts estimates and rival Infosys becoming the top Indian software service exporter. The company had only recently stated that they are expecting business from Europe to account for 30-35 percent of its revenue. The company increased business in Europe by 2 almost percent
REFERENCE:
http://www.blog.infinit-o.com/future-tcs-pada-deal-remains-uncertain/
