Analysis: Tata wins high ratings and $1.2 billion from Nielsen

Ten-year agreement will help Nielsen consolidate services, while raising Tata's profile among consulting services companies

Tata Consultancy Services (TCS) and the Nielsen Company jointly announced an outsourcing deal today in which Nielsen will  hand over most of its IT and operations functions worldwide to TCS.

The deal is valued at $1.2 billion and is part of a 10-year agreement between the two companies.

While TCS will take over the usual IT and operational processes that outsource and offshore providers have been doing for years, the more interesting part of the agreement says that Tata will also work with Nielsen to "integrate and centralize multiple systems, technologies and processes," according to the prepared statement.

The significance of this part of the agreement rests in the fact that large services organizations such as Nielsen have come to realize they can no longer be a one-stop shop for a variety of related but disconnected solutions.

Nielsen currently provides television and Internet audience measurement; insight and analysis of consumer behavior for the packaged goods and retail industries; and a variety of services for print, online, and mobile media services, as well as for the entertainment, books, video, and music industries.

As all of these industries begin to consolidate, they in turn are looking for consolidated views across all of their business interests. By integrating its services, Nielsen hopes that Tata will help it deliver a higher level of analytics to its customers.

"Nielsen is moving quickly to transform an outstanding group of operating businesses into an integrated, market-focused organization that delivers high-value information services to our clients," said Mitchell Habib, executive vice president for Nielsen Global Business Services.

The deal also moves the India-based consultancy higher up the value chain, bringing it face to face with such world-class consulting services companies and competitors as IBM and Accenture.

Under the proposed 10-year deal, TCS will also take responsibility for some finance and human resource business processes. These processes will be executed on TCS' BPO platforms.

The deal is not yet final. However, a spokesperson said that a definitive agreement is expected to execute in the near future.