NCS Has Moved Out of Singtel Group Enterprise and Doubled Down on Digital Services

S. Soh

Summary Bullets:

  • NCS is investing in digital services, expanding its operations in China and Australia, and targeting key industry verticals.
  • NCS has gained greater autonomy moving out of Singtel Group Enterprise, to strengthen its regional capabilities in delivering digital solutions.

NCS, formerly National Computer Systems, was founded in 1981 to support the Singapore government’s initiatives related to IT implementation. It was acquired by Singtel in 1997, and it remains a key business within Singtel, delivering ICT solutions for enterprise customers both in Singapore and across Asia. According to Singtel, NCS has delivered revenue growth for seven years running. However, most of the business is generated in Singapore and especially within the public sector. NCS operated as a business unit within Singtel Group Enterprise for several years, but it has never been fully integrated with Singtel. The company has retained its brand name, and it has different capabilities than Singtel (e.g., consulting, business application services, AI, and automation) as well as a different business model (e.g., project-based, industry-focused, and bespoke solutions).

Outside of Singapore and the public sector, NCS is overshadowed by global IT firms such as Accenture, NTT Ltd. (formerly Dimension Data), DXC, and Infosys. The company is seen as a safe pair of hands for projects close to home, but hardly as a thought leader. There are major gaps between NCS and global Tier 1 players in terms of expertise, brand, presence, and partnerships. Steps have been taken to drive business growth beyond its comfort zone. Firstly, the company is investing in NEXT services (i.e., digital, cloud, platforms, and cybersecurity), while continuing to protect its core offerings in business application, infrastructure, and communications services. In October 2020, NCS acquired 2359 Media, a digital services consultancy business, to be part of NCS NEXT digital arm. 2359 Media is a relatively small outfit, but it has a presence in Singapore, Vietnam, and Indonesia and it has delivered cloud and mobility solutions for clients across sectors such as financial services, media, healthcare, and retail. More importantly, NCS has developed a new operating model that focuses on strengthening client service, delivery, innovation, operations, collaboration, and talent development.

NCS is also looking for growth outside of Singapore, with Australia and China as the main focus in the near term. The company launched NCS NEXT in Australia in December 2020 (please see NCS Launches NEXT in Australia and Joins Forces with Optus to Target Digital Opportunities,” December 4, 2020) and then launched the NEXT Shenzhen Innovation Centre (SIC) on January 18, 2021 to strengthen its presence in China. The SIC will also specialize in developing 5G-enabled IoT applications as well as digital twin and blockchain solutions for industries such as financial services, telecommunications, and real estate.

Finally, as part of Singtel’s organizational change announced on December 31, 2020, NCS is now a separate business unit from Group Enterprise, reporting directly to the Singtel Group CEO. This gives NCS greater autonomy and management focus to achieve its growth targets. Within NCS, the company has also created three business units to focus on the commercial sector: healthcare and transport; communications, media, and technology; and financial services, industrial, and commercial.

Overall, the recent moves are positive for NCS because they allow the company to compete more effectively with other IT firms in the region. NCS needs to scale up in the digital services space and close the gaps with major competitors in terms of solutions, people, partnerships, and brand recognition. While it can leverage Singtel’s various assets, this can also create challenges related to the coordination with Singtel for network services, Optus for go-to-market in Australia, and Trustwave for cybersecurity deals. The tendency to look inwards can also impede its willingness to partner with other players that are deemed competitors of other Singtel business units.

Opportunities abound for offering digital services to enterprise customers across the Asia-Pacific region. NCS does have experience implementing large-scale, complex projects, but it needs to showcase its ability to do the same across the region. The company has a smaller regional presence (excluding Singapore) compared with other major system integrators. It needs to focus on key areas where it can win (e.g., IoT, selected industry verticals, and key markets such as Australia, China, and ASEAN) and gradually scale out. These latest moves might give it more autonomy and momentum to branch out.

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