Facing headwinds in most verticals like BFSI (banking financial services and insurance), tech and telecom, two of the country’s top IT firms recently signed deals in agribusiness, thus diversifying their revenue stream.
Last week, Tata Consultancy Services (TCS) was selected as a strategic partner by Nordic farmers’ cooperative, Lantmannen Ekonomisk Forening (Lantmannen), to transform their IT infrastructure and provide digital workplace services. As part of the multi-year agreement, TCS will provide round-the-clock business resilient operations to Lantmannen.
In quick succession, HCLTech also announced that it has been selected by Elders, a leading Australian agribusiness, to accelerate digital transformation across Elders’ business operations. Under the multi-year IT services partnership, HCLTech will provide cutting-edge managed IT services for Elders.
Analysts say that there is a push factor for agribusinesses to accelerate their modernisation and digitally transform their business because of geopolitical uncertainties like Russia-Ukraine war and climate change.
Around 10 days before TCS signed the deal, the Swedish farmers’ cooperative announced the completion of the divestment of its operations in Russia. Last year, European nations had raised concerns of widespread cyber attacks amidst the Ukraine war, and Lantmännen took measures to prevent any such attack by shutting down several IT systems and services.
Analysts maintain that agribusiness is likely to emerge as the next big frontier for IT service providers because it is largely untapped.
DD Mishra, senior director analyst, Gartner, said, “Agribusiness is relatively untapped sector. The diversification of IT services providers into this area which is relatively less crowded can provide new opportunities”.
He said that it will be interesting to see how IT services companies explore more strategic endeavours in this sector as opportunities have been relatively less compared to BFSI, retail, healthcare, telecom and others.
Peter Bendor-Samuel, CEO, Everest group, said, that the uncertainty and increased geopolitical risk is influencing agribusiness companies in much the same way that Covid exposed the weakness in legacy systems and people driven process.
“As a result of this increased awareness and sensitivity, Lantmannen may have decided that a more resilient and agile operations can be achieved through accelerating their digital transformation. The large award to TCS is a significant step to accelerate this transformation and further de-risk its operations. It will be interesting to see how many other firms follow down the same path”, Peter said.
