Tata Chemicals has signed a contract with Tata Consultancy Services (TCS) for outsourcing its entire IT requirements through TCS for a period of ten years.

The agreement suits TCS well, as outsourcing of IT and core technology solutions by the manufacturing and process industry sector from TCS is a focus area for it.

The segment, called Manufacturing Practice, is expected to contribute about 20 per cent to TCSs revenues in the fiscal 2002. It had contributed roughly 15 per cent to TCS revenues in the fiscal 2001, which were placed at Rs 3,142 crore, TCS officials told domain-b.

TCS will not only create IT systems for Tata Chemicals that will help integrate its supply chain, but will also provide the much-required IT backbone for its various other existing activities and its new initiatives to be rolled out in the future.

The two companies plan to work together to deploy IT to bring about operational efficiencies in the company by coordinating plant systems and commercial operations. Tata Chemical managers plan to use more automated support systems that will help track major performance indicators in the areas of procurement, inventory, production, plant maintenance and distribution.

As per the contract, TCS will also give infrastructure services support and high-end technology solutions to Tata Chemicals at all its operating locations. Towards this end, TCS has already taken up commissioning of automation systems at the soda ash plant of Tata Chemicals located at Mithapur, Gujarat, sub-awarding the contract to the group company Tata Honeywell.

While the exact outlay on implementing IT solutions in the company was not given, TCS officials say Tata Chemicals plans to invest Rs 19 crore to Rs. 20 crore over the next three years. The investment is expected to be recovered in three years time.

Announcing the tie-up last week TCS chief executive officer S Ramadorai said: TCS believes that the use of IT-based solutions in the manufacturing industry offers a significant opportunity to the industry to enhance its competitive advantage by improving productivity. Our alliance with Tata Chemicals and the key role that we will play in their business plan for the next ten years is a milestone in TCS quest for becoming a global top ten consulting enterprise.

Responding to the tie-up Tata Chemicals managing director Prasad Menon said: We are working with TCS to streamline our processes and effectively address key business drivers for Tata Chemicals. This will be done by using TCS solutions to integrate the company from shop floor to boardroom, thereby providing significant operational advantages to our soda ash, salt and fertiliser businesses. Over the next two years, TCS will work with us to integrate e-business applications, enterprise systems and production systems. This will ensure availability of consistent and timely information across the organisation. With TCS managing our day-to-day IT requirements, we will be able to focus on our core business knowing that our systems are in good hands.

TCSs Manufacturing Practice provides high-end consulting and IT-based solutions to a wide spectrum of continuous process manufacturing industries such as automobile, auto components, cement, refining, chemicals and minerals and metals industries. It helps companies improve their performance by leveraging the power of the Internet to drive improved efficiencies across the enterprise. Says Dr. Ravi Gopinath, who heads TCS Manufacturing Practice: TCS has developed considerable domain expertise in providing solutions to the domestic and global manufacturing industry. Our focus is to create and develop technology solutions that demonstrates a clear value proposition to our customers in todays dynamic business environment.