Tata Will Drive Chrysler`s IT

TataConsultancy Services, a subsidiary of the multibillion-dollar India-based TataGroup, won a major contract to provide IT services to struggling Americanautomaker Chrysler.

In anannouncement made this week, Tata said it would provide the third-largest U.S. automaker with a ?comprehensiveportfolio of IT services.? Services include IT maintenance and applicationsupport, particularly for Chrylser?s sales, marketing and shared servicesdivisions. While official figures on the value or scope of the deal were notreleased, the multiyear contract is estimated to be worth tens of millions ofdollars.

?Thisgrowing trusted partnership is a testament to TCS? competencies andcapabilities which continue to help the customer in its business transformationby providing innovative IT services scalable to their needs,? said N.Chandrasekaran, executive director and chief operating officer of TataConsultancy Services, in a statement. ?The expertise and in-depth knowledge ofthe automotive industry and Chrysler?s business, coupled with our ability todeliver certainty of results will provide sustained value to Chrysler.?

Chryslerwas not available for comment, and Tata declined to provide more specifics onthe contract. Neither firm would comment on whether the deal will affectChrysler jobs or result in cost savings for the carmaker.

IToutsourcing is a growing trend among multinational enterprises. Several majorGlobal 2000 companies have announced IT outsourcing initiatives to shaveoperation costs and gain access to IT talent. In January, Royal Dutch Shellannounced it would outsource most of its IT operations in an effort to savemore than $500 million annually. When the deal is initiated in June, Shell isexpected to layoff up to 90 percent?or 3,200 people?of its global IT staff.

Ironically,Tata Consultancy Services is a sister division to Tata Motors, a company thatwill compete in India?and potentially other parts ofthe world?with Chrysler. Tata Motors will introduce its Nano subcompact sedanthis year, a car that will retail for $2,500. The Nano is designed to provideaffordable, no-frills transportation to the burgeoning middle class in India, a country with a population ofmore than 1.1 billion.

TataConsultancy Services is no stranger to the global automotive industry. Morethan 15 percent of its $4.3 billion in annual revenue comes from servicesprovides to auto manufacturers. The company says it provides productdevelopment, manufacturing, supply chain and customer service support for mostof the NorthAmerica,Japan and Europe automakers and their tier-one suppliers.

Chrysler was spun off as a privately heldcompany last year when the venture capital firm Cerberus bought the automakerfrom Daimler for nearly $7 billion. The acquisition ended a 10-yearrelationship between the parent company of Mercedes-Benz and its strugglingAmerican counterpart, which ended up costing the German company nearly $30billion in lost equity.