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Tech Reliance, Accenture in consulting deal

Tech Reliance, the information technology company being floated by Reliance Communications (RComm), is likely to have an alliance with Accenture.

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Reliance Comm unit moving ahead in software space

MUMBAI: Tech Reliance, the information technology company being floated by Reliance Communications (RComm), is likely to have an alliance with Accenture, the global consulting firm.

As a vendor, Accenture will handle the consulting assignments of the outsourcing deals struck by Tech Reliance.

“Accenture will be working with us closely,” an RComm official said.
“But it will be only one of the vendors that will provide us the consulting capability required by our clients,” he said.

The other major vendors for Tech Reliance are Wipro, TCS and IBM.
Recent reports had suggested that RComm was in talks with French technology company Capgemini for an acquisition. But both RComm and Capgemini have denied this.

In a February 15 interview to BusinessWeek, Capgemini CEO Paul Hermelin refuted the speculation that RComm may be in talks to acquire Capgemini, but informed: “Reliance closed a major alliance with Accenture. So, if there’s one Indian company that would never even talk to us, it’s Reliance.”

Accenture dwarfs RComm in revenues, generating net revenues of $19.70 billion for the fiscal year ended August 31, 2007, while RComm’s were $2.55 billion.
Analysts feel subcontracting may be the way to go for Tech Reliance.

The RComm source said Tech Reliance is doing back-end work for growing both organically as well as inorganically.

Its major customers would be all the Reliance Anil Dhirubhai Ambani Group companies.

“In addition, we would be looking at both the domestic and international market to offer our services,” the source added.

“An initial corpus of Rs 2,000 crore, if not a billion dollars (Rs 4,000 crore),” the source said, “is what Tech Reliance is going ahead with to kickstart operations.”

The verticals in which Tech Reliance would be offering services are financial services, utilities, telecommunications, entertainment and multimedia, healthcare and manufacturing.

The undivided Reliance group was one of the early users of SAP enterprise resource planning software (a core business application used to integrate various business processes, sold by German pioneer SAP AG).

This, too, will be one of the major IT practices at Tech Reliance since SAP ERP usage dominates the ERP space globally.

In India, too, that’s the case: 57% of the total ERP market uses SAP.
Tech Reliance has already set up units in Gurgaon, Kolkata, Mumbai and Hyderabad and about 4,000 professionals have been recruited to jumpstart operations.

Earlier this month, Gartner, the IT research firm, said in a report that the market segments expected to witness the strongest growth in India are consulting, IT management, and business process management (BPM) services, with five-year growth rate of 28.1%, 23.8% and 27.1%, respectively.

“Consulting revenue, although coming from a small base, grew 30.1% to $340 million in 2006 compared with 2005,” for the sector, Gartner said.

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