The Hindu Business Line : Toyoto Fin of US outsources systems management to TCS

This is the first time that the US operations of Toyota Financial Services has outsourced the management and process improvement of its legacy management system to any party outside of the US.

The company is engaged in retail and wholesale financing, retail leasing and other financial services that are offered to the authorised dealers of Toyota and Lexus, as well as Toyota Material Handling, US, dealers, affiliates and their customers in the US.

Stating this here, Mr George E. Borst, President and Chief Executive Officer of Toyota Financial Services (TFS), said TCS had bagged the open-ended contract — whose value was not disclosed — from among a total of seven bidders. The idea behind the initiative was "not just to save on costs, but also to ensure process enhancement and improvement''.

The saving in costs for TFS on account of the outsourcing would approximately be 50 per cent, it was stated.

"TCS was chosen because it was under-budget, the company has the capability to execute projects before time and it has exceeded our expectations'', he said.

Mr Borst said TFS, which has an asset base of $40 billion in the US, had decided to outsource its major IT systems management and allied work in the next few years.

In the first phase, TCS has been awarded the contract to maintain TFS legacy management system and facilitate its movement towards an open-ended system. This year, in the US alone, TFS has 8,35,000 live finance contracts and 6,60,000 insurance and warranty contracts.

In the second phase, TFS is looking to outsourcing those areas of IT "which makes sense for our business to outsource''.

These could well focus on business processes outsourcing, development work and initiatives aimed at ensuring greater operational efficiencies.

In the long run, the idea was to move from legacy systems to a component-driven, open architecture environment. In the future, TFS would also look at integration packages, Mr Borst said.

Mr Ajoyendra Mukherjee, Vice-President of TCS, said this contract had vested the company with the charge of IT consulting and maintenance programme of TFS.

He said the entire work would be executed out of TCS Kolkata centre and an additional 50-60 people would be recruited for the purpose.

Mr Mukherjee, however, declined to divulge the likely incremental revenue that would be generated on account of the TFS contract.

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