TCS breaks into UK local government

(By Tola Sargeant, Tuesday 3 November 2009, 16:30) Offshore SITS supplier Tata Consultancy Services (TCS) has won its first contract in Local Government in the UK. In what is a landmark deal for offshore players in the traditionally conservative local government sector, Cardiff Council has chosen TCS to help drive the Council’s Strategic Transformational Change Programme. The Indian player will support the Council’s ICT Service “to help deliver more efficient systems and ensure both parties benefit from an exchange of knowledge and experience”. TCS beat IBM and BT to the deal, which is rumoured to be worth £150m over 15 years.

This deal is interesting on many levels. For TCS it is a fantastic win and vindication of its concerted efforts to woo the UK public sector over recent years. The contract follows TCS’ success at the UK’s Child Maintenance and Enforcement Commission back in April (see TCS wins Child Maintenance Enforcement contract) and is surely evidence that areas of the UK public sector – even local government - are now willing to engage directly with offshore suppliers despite the risks of a political backlash.

Indeed, as we’ve said before, we wouldn’t be surprised to see more public sector organisations turning to lower cost offshore providers as spending cuts begin to bite. Cardiff Council Leader Rodney Berman’s comments on the TCS contract award were interesting in this respect. He said: "It is clear that the public sector needs to adapt to the changing world around us to ensure we are equipped to deal with the effect of the recent global recession and the ongoing squeeze on the funding that is available for spending on public services.”

That said, this contract is about more than labour arbitrage. Cardiff is at pains to stress that no Council staff will be transferred to the private sector, and it clearly values TCS’s onshore abilities and global public sector experience. TCS is particularly strong in local government in India, where its systems support populations larger than that of the whole UK.

All in all, this is great news for TCS and, if the contract is successful, potentially a fantastic entree into the UK local government market.