TOKYO -- India's Tata Consultancy Services is accelerating its efforts to gain a greater presence in Japan, for example by doubling its spending on talent development programs this year. For a multi national information technology giant, training personnel able to deal with unique business practices and demand in Japan is the key to fully entering the market.
TCS has been doing business in Japan for about 30 years, but has failed to gain as much presence here as in Western markets.
Its Japan unit was formed in 2014 through the merger of TCS's subsidiary in Japan and a Mitsubishi Corp. subsidiary. TCS Japan hoped to make the most of the reputation and marketing network of the Japanese trading house. With its 2,400-strong workforce, the Japan unit provides IT services to Japanese companies, including system development for manufacturers and financial services, with help from some 2,000 specialists in India.
Since the merger, the Japan unit has established a base to train specialists. At least 30 training programs are available for over 200 eligible engineers, including for learning data analysis, artificial intelligence technologies and advanced IT applications making use of the internet of things. Course content is typically focused on case studies based on TCS's experience gained from actual projects worldwide.
In addition, TCS Japan plans to send 20-30 employees to the group's locations abroad, where the trainees will take part in system development projects for specific clients.
About 90% of TCS's earnings come from outside of its home country. The Indian business has positioned itself to provide services to a number of established Western businesses. TCS hopes to transfer the know-how it has gained in Western markets to Japan, for example in the development of a customer management system for a U.S. retail chain. The company is proposing built-in software for cars to a Japanese automaker, a source said.
Another focus of TCS is to offer "Japanese quality" to its customers. The Japan unit has prepared an in-house manual covering how to write specifications and communicate with Japanese clients, among other tips. This is part of efforts to raise the quality of services mainly among manager-level engineers.
TCS established a development center last year in the western Indian city of Pune, specifically targeting the Japanese market. The first research site to focus on a specific country, the center also has training facilities for studying IT systems unique in Japan, as well as learning the Japanese language and particular business practices. The center is also in charge of providing initial training for newcomers to the Japan unit.
TCS sees Japan as a significant market, but secondary to the Western markets. The business has provided services to financial institutions and retailers globally. But in Japan, its main customers are manufacturers, which often cannot make the most of the vast amount of data collected through their production facilities, due to lack of know-how in internet of things and other advanced technologies.
The company aims to propose solutions to such businesses speedily with its expertise gained through a number of projects overseas, as well as meet the standards Japanese companies expect.
For system development projects overseas, according to TCS Japan, the designing process can go onto the implementation phase if 75 out of 100 items work properly. Engineers can fix the remaining portion as they actually operate the system. In Japan, however, the threshold can go up to as high as 96% of the full criteria.
Another hurdle in Japan for TCS is that, compared to their peers abroad, Japanese IT companies typically do not have as wide a nationwide network of maintenance and operation locations.
TCS is one of the largest IT outsourcing businesses in the world, with $16.5 billion in sales for fiscal 2015. The business has expanded itself by leveraging its stockpiled experience in a number of projects, regardless of boundaries of countries and industries. The business is now taking a unique approach to get further into the unique Japanese market.