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TCS enters outsourcing with buyout

Mumbai, May 6: Tata Consultancy Services (TCS) today acquired Airline Financial Support Services (AFS), a company that fills the long-missing business process outsourcing (BPO) link in the software major’s value chain.

The Tatas bought out their partners in AFS, which caters to the airline and hospitality industry since it was formed in 1992 as a joint venture between Swissair (with a 75.1 per cent stake) and Tata Sons, which controls 24.9 per cent.

AFS was Swissair’s captive BPO arm, offering a wide array of revenue-accounting services.

The acquisition gives TCS an entry into an area where Wipro, Infosys and BFL MphasiS have made deep inroads.

“We see considerable value being added from AFS, a financially sound venture. The BPO business is driven by the support requirements of customers and cost equations in back-office software,” TCS CEO S. Ramadorai said after announcing the buyout.

The 450-strong AFS will add 2,000 more hands over three years.

“TCS has been traditionally offering BPO services, especially to domestic clients. However, the challenge is to leverage the domain expertise and experience garnered over three decades in the business to deliver quality to customers. The acquisition of AFS is a significant step in our BPO ambition,” Ramadorai said.

Over the years, AFS has grown in size and scope, winning new customers and providing allied airline back-office processing services. TCS says its global presence will help it market AFS’ services to international airlines and the global hospitality industry.

“With TCS, we want to exploit our synergies in global market positioning, joint strategic business development, quality excellence and superior product delivery. This should catapult AFS into being the leading provider of end-to-end process outsourcing solutions,” AFS president and chief executive officer Burjor Randeria said.

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