Tata Consultancy Services (TCS) plans to establish an information technology services triangle - linking India, Singapore and China - that could channel more outsourcing contracts into Asia. Chief executive S Ramadorai said the regional project would address the global business sector's growing demand for offshore business process outsourcing (BPO) services. 'This demand means that we must establish a collaborative business model, which taps into the competencies of our dedicated workforce in strategic markets,' he said. TCS, India's largest IT enterprise with US$1.04 billion in annual revenues as of the end of March, is also one of the world's top 10 custom software application developers, research firm Gartner says. The Mumbai-based software and services organisation employs more than 24,000 consultants, serving hundreds of corporate clients in more than 55 countries. The company, a unit of the US$10.4 billion Tata Group, is also the first Indian software firm to open a wholly owned foreign enterprise in the mainland. Mr Ramadorai said worldwide spending on information systems outsourcing was moving rapidly to BPO initiatives. 'We've been doing BPO projects since the company was formed in 1968, and we're moving to meet the increasingly complex requirements of enterprises worldwide.' Financial details were not given. The company's proposed multi-location BPO strategy is expected to cater to different outsourcing business plans and budgets. India has been the preferred destination for many western companies' offshore IT outsourcing contracts because of the country's mature IT processes, skilled labour pool, low-cost base and proven track record. Mr Ramadorai said India, under the company's regional IT services zone, would handle more high-end IT projects destined for the region. These included back-office and contact centre delivery services. Singapore will cater to regulatory compliance and information security projects, while China takes on low-end services and offshore projects for Japanese firms. The drivers for the company's multi-location strategy include corporate clients' language preferences, operating cost considerations, tighter security and disaster-recovery options, regulatory compliance, and a 'follow-the-sun' model for handling transactions and services, such as around-the-clock call centre operations. Such flexibility is expected to serve TCS well as it competes with other Indian software services firms such as Infosys and Wipro Technologies, and global IT players such as IBM, Hewlett-Packard and Electronic Data Systems. Research firm International Data Corp (IDC) estimates worldwide spending on IT outsourcing services will surpass US$99 billion by 2007 from US$68 billion last year. IDC found that the worldwide information systems services market was still fairly fragmented, primarily due to its low barriers to entry. It noted that less than half of all worldwide customer spending on these services went to the top 10 companies, led by IBM Global Services. 'Driven in part by the economy and the fundamental lack of a hot new technology, customers are finding that outsourcing either technology or business processes may be a more sound strategy economically than building customised solutions,' said Stephanie Torto, programme manager for systems integration services at IDC. She noted that the custom application development services market was undergoing a structural shift as more and more work was delivered from overseas locations, spearheaded by specialist IT services firms based in India. Mr Ramadorai expected TCS operations in the mainland to flourish as the company added more software engineers, from 150 by the end of this year to about 3,000 by 2005. Last year, the company's mainland operations signed US$20 million in contracts.