Citigroup eyeing ways to trim IT costs
Citigroup is believed to be looking at ways to trim its IT costs. This could spell good news for Indian IT vendors like TCS and Wipro who count Citi as their top client.
By Jessica Mehroin Irani, ET Bureau |
MUMBAI: Citigroup is believed to be looking at ways to trim its IT costs. This could spell good news for Indian IT vendors like TCS and Wipro who count Citi as their top client.
The bank, which has been repeatedly bailed out by the US government, has undergone a major restructuring exercise of its business portfolio in the recent past. It is looking to integrate thousands of systems and cut down on application, maintenance and development (AMD) costs, said a source close to Citi.
This integration process will bring new business for Indian IT vendors like TCS, Wipro and Infosys as the bank is keen to outsource the process to save on costs. A Citi spokesperson said, "We have no detail on or confirmation of these developments at this moment."
While this could translate into new business contracts for Indian IT vendors, the existing AMD and IT services contract could see a 15-20% drop in budgets over the next 6-8 months.
After the acquisition of Citi's back-office CGSL in the second-half of 2008, TCS considers the bank as its top client accounting for 4.7% of its revenues in FY 2008-2009. This has dropped by 1.5% since the first quarter.
However, a TCS spokesperson declined to comment on any specific client, while a Wipro spokesperson said, "We do not comment on speculative reports and we continue to partner with Citi in increasing diverse initiatives to improve the efficiency of their IT systems and operations."
While this could translate into new business contracts for Indian IT vendors, the existing AMD and IT services contract could see a 15-20% drop in budgets over the next 6-8 months.
After the acquisition of Citi's back-office CGSL in the second-half of 2008, TCS considers the bank as its top client accounting for 4.7% of its revenues in FY 2008-2009. This has dropped by 1.5% since the first quarter.
However, a TCS spokesperson declined to comment on any specific client, while a Wipro spokesperson said, "We do not comment on speculative reports and we continue to partner with Citi in increasing diverse initiatives to improve the efficiency of their IT systems and operations."
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