TCS Wins $1.9-Billion UK Deal After Transamerica’s In US Is Scrapped
The TCS-Nest deal is the Indian IT firm’s fourth in the UK so far this year, after M&S, Phoenix Group and Teachers’ Pension Scheme
Tata Consultancy Services Ltd. and the UK’s National Employment Savings Trust have expanded their partnership to transform administrative services of the country’s biggest workplace pension scheme.
The deal, with an estimated total contract value of £1.5 billion (about $1.9 billion), will see India’s biggest IT services firm deploy TCS BaNCS platform to digitalise administrative services for Nest’s one million employees, according to an exchange filing on Wednesday. That, in turn, will deliver personalised retirement solutions for 12 million members of the online pension scheme.
The contract, worth £840 million, has been signed for an initial tenure of 10 years, with an optional extension period of up to five years, and additional three years for exit. The total estimated value of the contract for the full 18-year tenure stands at £1.5 billion, according to a second TCS statement.
“This new contract with TCS will focus on making the most of advances in technology and data analytics to deliver tailored and personalised services for each of our customers,” a Nest spokesperson said in an emailed response to BQ Prime’s queries. “It will take us to the next level, a truly digital Nest providing world-class service that helps millions enjoy a better retirement.”
“The contract is for a fully outsourced service for the build, delivery, and operation of our defined contribution pension scheme administration services,” she said.
The TCS-Nest deal is significant, for its announcement comes days after TCS and US-based insurer Transamerica agreed to scrap their ten-year, $2-billion deal after a little over five years, citing “current macro environment and respective business priorities”. The impact, however, will be minimal as TCS has recovered 85% of the deal value in revenues over the past five years.
This is also the fourth large deal that India’s biggest outsourcer has struck in the UK so far this year. It follows the Marks & Spencer’s deal in April, the Phoenix Group deal in February, and the contract for Teachers’ Pension Scheme in England & Wales earlier this month.
Nest was set up by the British government under the Pensions Act of 2008 to make auto enrolment of workers as simple as possible. It is a workplace pension scheme, meaning most people join through their employer—similar to the Employees’ Provident Fund in India. Nest first brought on board TCS in 2011, which then built a digital, auto-enrolment pension scheme for the platform.
“The partnership resulted in an immensely successful pension plan for the UK workforce, that is now a global benchmark on how an auto-enrolment pension scheme should be run,” Vivekanand Ramgopal, president for BFSI Products & Platforms at TCS, said in the statement. This expanded partnership offers compelling omnichannel member experiences to the new generation of workers entering the workplace, he said.
On Wednesday, shares of Tata Consultancy Services rose 0.94% to Rs 3,257.45 apiece even as the benchmark Sensex ended the day 0.31% higher at 63,523.15 points.
