TCS

TCS collaborates with Microsoft AI to improve margin performance

Tata Consultancy Services Ltd is banking on its collaboration with Microsoft Corp to build artificial intelligence-based software services for clients, to gain larger margins to fuel development.

The biggest outsourcing company in Asia has increased its collaboration with Azure OpenAI, a joint venture between Microsoft and OpenAI founder Sam Altman. It also employs the cloud-based AI tool GitHub Copilot to provide services like as fraud detection to financial sector customers and personalized customer support to merchants.

Services that use this cooperation might help TCS enhance profits, according to Chief Executive Officer K Krithivasan in an interview with Bloomberg News.

"We work along with Microsoft in building industry-specific solutions that we can take to market together," he added. "The only question is when it reaches a critical mass to make a difference in your overall market?" We expect it will take at least a couple more quarters before it reaches a meaningful level."

TCS, which has over 100,000 generative AI-ready staff, is incorporating the technology in several of its software solutions, which it claims is assisting it in winning huge transactions.

Krithivasan, who took over as CEO in June, has also restructured the organization to better leverage the business skills of its senior executives and increase client connections.

"We need to see whether it provides sustained growth over some time," he added. "Does it remove the friction within the organization?"

TCS and smaller rivals like as Infosys took advantage of the late '90s dot-com boom to provide low-cost back-office operations to the rest of the globe. Since then, they've become IT service suppliers to some of the world's largest corporations, including Apple Inc., Merck & Co. Inc., Vodafone Group Plc, and PepsiCo Inc., contributing to India's $245 billion-plus software services sector.

As the traditional outsourcing industry faces margin pressure due to fears of a global recession and Russia's invasion of Ukraine, Indian IT firms are relying on big data, machine learning, analytics, cloud, and artificial intelligence (AI) to help clients transform their legacy businesses and counter the rise of nimble startups.

"That is the goal." "We should be more involved in areas where customers are investing for the future," Krithivasan added. "We will continue to enhance our capabilities so that we can participate more."