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A REPORT ON TCS-

TCS-STRATEGIES, CORE
PHILOSOPHY, VISION, MISSION
MISSION & ITS
BUSINESS DEFINITION
DEFINITION

Submitted to: Submitted by:

Prof. Mukand Mate Abhisekh Garg (08BS0000105)

Faculty: Business Strategies Asish Kumar Sahu (08BS0000643)

Birendra Kumar (08BS0000771)

Happy Lamba (08BS0001153)

Javed Pirani (08BS0001279)

Pranjal Kumar Das (08BS0002282)

Surya Shakti Mohanty (08BS0003500)

Tanmay Khuntia (08BS0003571)


TCS

Vision
Global Top 10 by 2010

Mission
To help customers achieve their business objectives, by
providing innovative, best-in-class consulting, IT
solutions and services. To make it a joy for all
stakeholders to work with us

Values
Leading change, Integrity, Respect for the individuals,
Excellence, Learning and Sharing

2
Contents

1. Table of Contents………………………………………………………………………………………………………3
2. List of Illustrations……………………………………………………………………………………………………..4
3. Part Wise Description…………………………………………………………………………………………………5
4. History of TCS…………………………………………………………………………………………………………….6
5. TCS-A Fact File……………………………………………………………………………………………………………7
6. Heritage & Values………………………………………………………………………………………………………8
7. TCS-The Ace Performer………………………………………………………………………………………………9
8. Products and Services……………………………………………………………………………………………….11
9. Business Analysis………………………………………………………………………………………………………12
10. Brand Equity, Competencies and Value Proposition………………………………………………….13
11. TCS-Michael’s Five Forces Model.……………………………………………………………………………..15
12. TQM Implementation at TCS……………………………………………………………………………………..17
13. TCS’s Global Network Delivery Model………………………………………………………………………..19
14. TCS’s Point of Focus……………………………………………………………………………………………………21
15. Growth Strategy…………………………………………………………………………………………………………23
16. TCS Co-Innovation Network……………………………………………………………………………………….25
17. Organization Development at TCS………………………………………………………………………………26
18. TCS- The Paradigm Shift……………………………………………………………………………………………..29
19. Refrences……………………………………………………………………………………………………………………30

3
List of Illustrations

1. Fig: TCS Global-Page 8


2. Table: Product and Services-Page 11
3. Fig: TCS- One Crucial step at a Time-Page 11
4. Table: Growth and Value Drivers-Page 12
5. Fig: Share Price Movement-Page 12
6. Fig: Revenue from industry verticals in FY 2007-08-Page 13
7. Fig-The IT services value chain-Page 14
8. Fig: Every Thing Checked-Page 16
9. Fig: TCS- A Combined Effort-Page 18
10. Fig: Green theme for Corporate Sustainability-Page 19
11. Diagram: TCS Global Delivery Model-Page 20
12. Fig: TCS the CTO Based Organization-Page 20
13. Fig: Product Development Issues-Page 24
14. Fig: TCS COIN(Co-Innovation Network)-Page 25
15. Fig: TCS-The Way Forward-Page 28
16. Fig:TCS-Together we Can-Page 29

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Part Wise Description
1. Abisekh Garg- History of TCS & TCS-A Fact File
2. Asish Kumar Sahu- Heritage & Values & TCS-The Ace Performer
3. Birendra Kumar- Products and Services & Business Analysis
4. Happy Lamba- Brand Equity, Competencies and Value Proposition & TCS-Five Forces Model
5. Javed Pirani- TQM Implementation at TCS & TCS’s Global Network Delivery Model
6. Pranjal Kumar Das- TCS’s Point of Focus & Growth Strategy
7. Surya Shakti Mohanty- Organization Development at TCS
8. Tanmay Khuntia- TCS Co-Innovation Network & TCS- The Paradigm Shift

5
History of TCS

Tata Consultancy Services was established in the year 1968. TCS is considered a pioneer in the Indian IT
industry. Despite unfavorable government regulations, like the License Raj, the company succeeded in
establishing the Indian IT Industry.It began as the "Tata Computer Centre", a division of the Tata Group,
whose main business was to provide computer services to other group companies. F C Kohli was its first
General Manager. The legendary JRD Tata was its first Chairman and was followed by luminaries such as
Nani Palkhivala.

One of TCS' first assignments was to provide punch card services to a sister concern, Tata Steel (then
TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS)
for the Central Bank of India. It also provided bureau services to Unit Trust of India, thus becoming one
of the first companies to offer BPO services.

In the early 1970s, Tata Consultancy Services started exporting its services. TCS's first international order
came from Burroughs, one of the first business computer manufacturers. TCS was assigned to write
code for the Burroughs machines for several US-based clients . This experience also helped TCS bag its
first onsite project - the Institutional Group & Information Company (IGIC), a data centre for ten banks,
which catered to two million customers in the US, assigned TCS the task of maintaining and upgrading its
computer systems.

In 1981, TCS set up India's first software research and development center, the Tata Research
Development and Design Center (TRDDC). The first client-dedicated offshore development center was
set up for Compaq (then Tandem) in 1985.

In 1989, TCS delivered an electronic depository and trading system called SECOM for SIS SegaInterSettle,
Switzerland. It was by far the most complex project undertaken by an Indian IT company. TCS followed
this up with System X for the Canadian Depository System and also automated the Johannesburg Stock
Exchange (JSE). TCS associated with a Swiss partner, TKS Teknosoft, which it later acquired.

In the early 1990s, the Indian IT outsourcing industry grew tremendously due to the Y2K bug and the
launch of a unified European currency, Euro. TCS pioneered the factory model for Y2K conversion and
developed software tools which automated the conversion process and enabled third-party developers
and clients to make use of it. In 1999, TCS saw outsourcing opportunity in E-Commerce and related
solutions and set up its E-Business division with ten people. By 2004, E-Business was contributing half a
billion dollars (US) to TCS.

On 9th August 2004, TCS became a publicly listed company, much later than its rivals, Infosys, Wipro and
Satyam.During 2004, TCS ventured into a new area for an Indian IT services company - Bioinformatics.
During the recent couple of years TCS has been on the growth of progress. Both nationally and
internationally TCS is recognised as the higly respected IT company and has surely put India on the
world’s IT map large and clear.

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Tata Consultancy Services Fact File

Type Public BSE: 532540

Founded 1968

TCS House, Raveline Street, Fort, Mumbai


Headquarters
- 400 001 India

Ratan Tata, (Chairman of the Board, Tata


Group)
S Ramadorai, (CEO and Managing
Director)
Jobhi Mahalingam, (Executive Director
and CFO)
N Chandra, (Executive Director, COO, CEO
Key people
& MD Designate)
Phiroz Vandrewala,(Executive Director
and Head, Global Corporate Affairs)
Ajoy Mukherjee, (Vice President and
Head, Global Human Resources)
K Anantha Krishnan, (Vice President and
Chief Technology Officer)

TCS Bancs, Digital Certification Products,


Products
Healthcare Management Systems

Information Technology Consulting, IT


Services Services, Outsourcing, BPO, Software
Products

Revenue ▲ US$ 6.015 billion (in FY 2008-09)

Net income ▲ US$ 1.123 billion (in FY 2008-09)

Employees 143,000 (As on 1 April, 2009)

Website http://www.tcs.com

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Heritage and Values

Established in 1968, Tata Consultancy Services has grown to its current position as the largest IT services
firm in Asia based on its record of outstanding service, collaborative partnerships, innovation, and
corporate responsibility.

TCS is proud of thier heritage as part of the Tata Group, founded by Jamsetji Tata in 1868 and one of
India’s most respected institutions today. Their mission reflects the Tata Group's longstanding
commitment to providing excellence:

To help customers achieve their business objectives by providing innovative, best-in-class consulting, IT
solutions and services, and to actively engage all stakeholders in a productive, collaborative, and
mutually beneficial relationship.

Their vision is to be one of the top 10 global companies by the year 2010.

Their values – integrity, leading change, excellence, respect for the individual, and fostering an
environment of learning and sharing.

TCS' ability to deliver high-quality services and solutions is unmatched. They are the world’s first
organization to achieve an enterprise-wide Maturity Level 5 on both CMMI® and P-CMM®, using the
most rigorous assessment methodology - SCAMPISM. Additionally, TCS’ Integrated Quality Management
System (iQMS™) integrates process, people and technology maturity through various established
frameworks and practices including IEEE, ISO 9001:2000, CMMI.

Fig: TCS Global

8
TCS-The Ace Performer

TCS continues to demonstrate therobustness of its business model with a strong annual performance for
the year 2008-09. During this period, the Company's consolidated revenues grew by 23 per cent to
Rs.27813 crore, thereby helping Tata Consultancy Services cross the $ six billion revenue milestone. TCS
consolidated operating profits grew by 26 per cent to Rs.7170 crore and its operating margins improved
by 109 basis points to 23.73 per cent. The net profit was Rs.5256 crore, a growth of 5 per cent over
2007-08, due to external factors like extreme currency volatility.

The Company's Board of Directors has recommended a final dividend of Rs 5 per share subject to
shareholder’s approval. This brings the total dividend payout in the financial year to Rs.14 per share. The
Board of Directors has also recommended an issue of bonus shares in the ratio of 1:1 – the second
bonus issue since your Company went public in 2004. This demonstrates the confidence in the ability to
perform and the soundness of the business model of the Company. At the end of the year 2008-09, TCS'
global footprint extended to over 42 countries through its 140 offices globally.

TCS remained focused on helping customers experience certainty while simultaneously adding new
customers and growing the business in new market segments and emerging verticals. The Company
closed 28 large deals and added 163 new customers globally in the past one year. There was an increase
in the number of customers across all revenue bands of $1 million, $5million, $ 10 million, $20million
and $ 50 million. TCS' biggest market North America crossed the $3 billion revenue milestone and grew
by 26 per cent in 2008-09 despite the recession in the region, while Europe grew by 38.5 per cent during
the year. The growing presence in multiple markets is important for the Company to ensure
diversification of its revenue base and sustain its growth momentum.

The immense talent, professionalism, dedication and support of over 143,000 TCSers continues to be
the Company's greatest asset. This includes 10,000 international associates from 67 nationalities. TCS
inducted 48,000 professionals including more than 22,000 campus graduates over the past year. More
than 1.6 million learning days have been invested in developing new competencies during 2008-09 and
around 23,000 TCSers gained additional technology certifications. The policies to recruit and retain
women professionals continue to bearfruit and the number of women in the Company has risen from
28% to 30% of the total employee count last year. TCS continued to drive new growth opportunities as
demonstrated by the strategic, $ 505 million acquisition of Citigroup's captive BPO in India.

This acquisition, which has since been renamed TCS e-Serve Limited, has enabled the Company to add a
vital new aspect to its banking and financial services business. The acquisition came with 12,500
talented professionals and a contract from Citigroup worth $2.5 billion over nine years. This move will
help expand the Company's leadership in the Banking Financial Services domain and has already made
TCS BPO among the top two BPO players in India in terms of the size of operations. TCS has also
increased its focus on a sustained efficiency program across the enterprise.

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TCS' growth has occurred within a challenging economic climate. The Company has demonstrated
leadership, remained disciplined in execution and faced a volatile market with a positive 'can do'
attitude. The recession which began as a client-specific US instance expanded to an industry-generic
malady and affected global businesses. While there has been some impact on the short-term growth
rates of the Indian IT industry in this financial year, TCS' value proposition to global business remains
strong. Looking towards the future, the Company will remain focused on agility, innovation and
operational excellence.

TCS has always adapted quickly to changing circumstances by its responsive and creative thinking. For
customers, TCS presents an enviable value proposition enabled by four decades of experience, domain
knowledge, technology excellence and offerings of full services play. TCS is well poised to gain
advantage from newer areas such as Healthcare, Energy, Utilities and Telecommunication including the
impact of new technologies such as Broadband, 3G, WIMAX, LTE and others.

TCS continues to invest for the future. Sustainability, Green IT and Cloud Computing are areas of
opportunity and your Company is leveraging these. The Cloud Computing based IT services model for
small and medium enterprises, currently being piloted in India, is an example of a business model
innovation that will set a new precedence in the IT industry. Such initiatives can be replicated, once they
are mature, into multiple global markets. TCS' platform-based BPO initiatives in areas like Human
Resources and Finance and Accounting will also contribute to future growth.

TCS has been continuously making investments to open up new markets and services. The investments
the Company has made in new growth markets like Asia-Pacific, Latin America and now in Middle East
and Africa are attaining scale, size and a meaningful presence. In 2008-09, the new growth markets grew
at a rate of 16%. The Company's vast pool of human capital is helping chart the Company's future
progress not only in terms of its business but also by its impact on the community. Over 50,000 hours of
volunteering effort was expended by TCSers, in the past year. One area where considerable progress
was made has been in the area of corporate sustainability. The increased environmental consciousness
across the organisation has resulted in reduction in air travel, 8% drop in electricity consumption, lower
paper and printer cartridge utilisation. This coupled with 'green' buildings and 'green' technologies has
helped reduce carbon footprint this year.

TCS continues to be an engine of growth because of its proven ability to reinvent the organisation and
the business. The Company is positioned to work in collaborative mode, learning constantly, critically
evaluating all that it does and demonstrate the leadership it is known for. Thanks to the employees and
their extended families, the many shareholders and the community at large, the future holds new
promise for TCS as a top technology company globally.

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PRODUCTS AND SERVICES
TCS OTHER SOFTWARE PRODUCTS
SERVICES
TECHNOLOGY SOLUTIONS
TCS Data Cleansing Framework TCS Clin-E2e
IT Services
TCS Hospital Management
TCS Business Rules Engine IT Infrastructure Services
Solution

TCS Silicone Ambulatory ECG


TCS Experience Based KM Enterprise Solutions
Device and Solution

TCS Enterprise Integration and


TCS Call Management Solution Control Environment Solution/ Consulting
Energy and Utilities

TCS PKI Suite (Public Key TCS Bio-Informatics Solution


Business Process Outsourcing
Infrastructure)

TCS Certificate Validation Server Business Intelligence

TCS File Authentication Solution Engineering &Industrial Services

TCS eLearning Effectiveness


Small & Medium Enterprises
Measurement Solution

TCS Code Generator Framework

Source: company website

Fig: TCS- One Crucial step at a Time

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BUSINESS ANALYSIS: TCS MEETING GLOBAL CHALLENGES TROUGH TOUGH
INITIATIVES:
Growth Drivers Value Drivers

- Promotional campaign : “Experience - Cost cutting by Efficient systems


Certainty”
- Business Restructuring
- Entering into joint ventures and
- Software Package prices gone up by
acquisitions
approx. 6.1 %
- Expanding in Multiple geographies with
infrastructure investment in Europe & - GNDM: One service standard to customers
globally.
Latin America

- Acquiring new Clients : Twenty large (US$ - Technology & labor cost benefits : Keeping
50 million-plus) deals India as key operations location

Fig: TCS-Share Price Movement

12
To study company’s Brand Equity, its core competencies and value proposition
to the customers.

Industries being served by TCS:

The Industry verticals where the Company has a sizable presence are-
• Banking & Financial Services
• Insurance
• Manufacturing
• Telecommunications
• Life Sciences and Health Care
• Retail
• Transportation
• Utilities
• Entertainment and Media

Fig: Revenue from industry verticals in FY 2007-08

13
Fig-The IT services value chain

High
Accenture

Deloitte

IBM
Consulting

Sapient
Value

Wipro

Infosys
EDS
TCS

Satyam HCL
Low

Low Cost High

Till now, the clients have been coming to India IT vendors saying “Go build this IT system for me” while
they go to a foreign IT consulting firm saying “Go solve this business problem for me”. This reflects the
space that Indian IT organizations occupy in the value chain. They are predominantly seen in the
application maintenance (and to a lesser extent in application development) and infrastructure
management space. Clients typically engage them in low risk - low cost projects while foreign IT firms
tend to get mission critical projects (high value and high cost) where they understand business
problems, decide the IT strategy for their clients along with building applications and managing them

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Michael Porter’s Five Forces

In the case of both software outsourcing and BPO, for TCS there are few important suppliers, because
TCS’ inputs are standard commodities and there is little opportunity for differentiation on the input side.
The four forces that are most problematic are the bargaining power of customers, the threat of new
entrants, the threat of substitutes, and the competitive rivalry with existing players. We examine each of
these four forces in their turn for both software services outsourcing and BPO.

In the early days of the software exporting business, the software vendor market was dominated by a
few large global suppliers such as IBM. Indian firms were viewed as too small to matter for obtaining
significant business. In addition, they competed actively with each other at the low-end. The result was
that TCS and its Indian peers chose components of the business that were relatively low value-added
and relatively simple to do.

TCS also faced a client market that was dominated by the large banks and insurance companies. While it
actively sought alliances with larger vendors as a competitive strategy, its most successful strategy was
to directly approach clients and accept the lower rates that its competitive position necessitated.

Looking ahead, TCS must continue to work to reduce the bargaining power of customers by trying to
move the purchase decision away from price. This means that TCS must deliver more than
undifferentiated programming by moving up the value chain. Such a movement is difficult in software
services because the customers have deep domain expertise and almost invariably wish to retain the
tasks grouped under strategic consulting. Moreover, customers understand that if they outsource the
strategic consulting, then their bargaining power will be reduced. TCS must develop sufficient expertise
so as to make outsourcing these tasks a compelling value proposition. Of course, it is exactly in these
realms that the multinational outsourcing firms such as IBM, Accenture, and EDS are the most ferocious
competitors.

Forging alliances is often viewed as a good strategy to offset clients’ bargaining power. However,
building alliances with firms working in clients’ locations should be discounted as this would further
focus TCS in applications’ development. On the other hand, the acquisition of a medium-sized American
firm with strong client relationships and domain skills could provide an attractive opportunity. Although
costs per employee would rise, the rise would be small since labor requirements are lower for higher
value-added work.

Meanwhile, the threat of new entrants is declining rapidly as the larger firms have rapidly increased
their size, market share, and credibility with customers. However, although firms strive to reduce their
direct competition through product differentiation, in each market segment there continue to be
numerous players.

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A key concern for TCS is competition from existing players as it has generated competition for existing
business and created significant pricing pressures. Globally, firms such as EDS have positioned
themselves as capable of undertaking large, “turnkey” projects in order to differentiate themselves from
competitors such as IBM and Accenture that focus on higher value-added work such as consulting. This
suggests an organically-driven growth strategy for TCS: that TCS continue to do the same kinds of work
that it currently does, but try to capture a greater portion of the value-addition by undertaking larger
projects. Though it has already demonstrated a capability in remote project management, it would be
required to further increase this capability.

However, there are some risks to this strategy. TCS’ large size suggests that it may have already
maximized economies to scale in applications development. Adding scope, however, offers the potential
for large gains since it necessarily involves higher value-added activities. In the early days, this was
difficult, partly due to the technical difficulty in de-integrating the value-chain beyond the
modularization of applications programming. Over the past few years, however, engineering services,
systems design, and systems integration work have increasingly been outsourced (within the U.S.),
suggesting that, if the skills are at hand, such work could be done in India.

Most of the American providers of such services offer domain and software skills. TCS already has the
software skills to move into these areas. But domain skills are a challenge. This reflects a general lack of
domain expertise outside the financial services sector in India. Put differently, India does not have
global-class, nontechnical knowledge in various other industries. As a result it is difficult to offer the full
panoply of services a firm would want when it considers outsourcing a software development activity.
This may be being rectified as the liberalization of the Indian economy since 1991 has led to the
development of a host of new industry capabilities, such as in insurance. This promises an expansion of
domain-specific skills in fields outside the traditional industries – but these will develop only gradually.

These facts indicate that it will be difficult for TCS as an organization based and staffed primarily in India
to change its revenue mix through organic growth. Acquiring Indian firms doing higher value-added
business is a possibility, but there are few such firms in the Indian business environment. Essentially, the
constraint that TCS faces is environmental rather than firm specific. In most sectors, Indian business
conditions are sufficiently dissimilar to overseas client conditions that local domain expertise is of low
relevance.
The threat of substitutes in software services does exist as technology tools to speed coding etc.
However, at this time the threat of substitutes seems rather remote.
Fig: Every Thing Checked

16
Total quality management (TQM) process adopted by TCS, its implementation
and implications during implementation across China.

TQM: TCS takes responsibility for the products and services it delivers. Their Quality Management
processes ensure that the service they deliver has minimal defects. TCS also provides warranty periods
in its contracts with its customers for after-delivery service in the case of a defect.

TCS’s commitment to quality and schedules ensures that the client's needs are met consistently. It
adopts a systematic approach to problems and encourages experimentation, innovation and creativity in
finding feasible solutions. Being a process-oriented organization, TCS believes that the definition of a
good process and subsequent adherence to that process is a critical part in ensuring a successful project.

Quality Management System: TCS’s Quality Management System (QMS) is based on the ISO 9001:1994,
IEEE standards, ISO 9001-3 and CMM Guidelines. Well-defined architected processes are adopted for
development, implementation, maintenance and conversion projects. These processes are defined in
the Process Handbook documents which form a part of the TCS QMS. TCS also conducts different
reviews at different stages of the project life cycle to ensure high quality.

Reviews: There are three levels of review that are performed- Internal Quality reviews, performed by
members of the project team, External Quality reviews that are carried out by analysts external to the
project team and a Final Inspection to make sure all open defects and suggestions have been closed.
The objectives of the review will be to ensure that-

• The project requirements are met


• No errors have been introduced
• Standards are adhered to
• Testing has been adequate

Testing: Different type of testing is done to make sure that the system works at its most minute level, as
well as a whole.
• Unit Testing: Testing each module/block as a single unit
• Integration Testing: Testing the different interfaces of the system to make sure it works as a
whole.
• System Testing: Testing the system for system level functionality, security, external interface,
usability and integration of the different modules under it.
• Acceptance Testing: Based on pre-defined acceptance criteria, the client conducts the
acceptance test during this phase. The TCS team provides support during this phase.

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The following awards/certifications have been received by TCS in the areas of Quality Management-

• JRD-QV Appreciation received the second consecutive year in a row (Based on the Malcolm
Baldrige National Quality Award—America’s highest honour for performance excellence- which
was established to promote quality awareness, to recognize quality and business achievements
of U.S. organizations, and to publicize these organizations’ successful performance strategies).

• ISO 9001 Certification: TCS had been certified enterprise-wide; with the certificate being
applicable till 2008. The audit was carried out by RWTUV Germany.

• CMMI Level 5 Certification: TCS had been certified enterprise-wide; with the certificate being
applicable till 2007 end. The audit was carried out by Ron Radice from SEI and Bill Hefley (co-
author of P-CMM) as lead assessors.

Fig: TCS- A Combined Effort

18
Global Network Delivery Model

The Global Network Delivery Model (GNDM) is a truly global network. GNDM is much more than having
an Indiacentric delivery model with near-shore centres and is not about setting up Offshore
Development Centres (ODC) in different geographies. The GNDM enables TCS’s delivery centres to
collaborate on projects, leverage all assets, work on a ‘follow-the-sun model’ if necessary, and above all,
through their homogeneity in terms of quality, skills as well as look-and-feel, give customers the same
experience of certainty, irrespective of whether they work with TCS in Chennai, China or Chile. The
Company became the first organization in the world to be certified enterprise-wide for ISO 9001- 2000,
ISO27001:2005 and ISO 20000:2005 in January 2007. Their customers can continue to experience the
certainty of "high quality of service delivery", as they stay focused on continuous improvement of
security, quality and processes in an industry where technology changes occur frequently.

The essential functions of GDM include:


Onsite - these are operations performed at the site of the client.
Offshore - these include operations performed away from the client’s site, generally from low-cost
countries.
Multi-location delivery centers - it is important to have a multi-location offshore presence in order to
mitigate risks associated with a single location delivery center and to ensure continuity of the business
process.
Front end - these include marketing and sales functions carried out in the client’s country in order to
obtain repeat business orders and to seek new clients. For a GDM to be successful it is important to
establish the right structure and thus have the right mix of onsite, front-end and offshore components.
GDM focusses on Green theme to strenghten Corporate Sustainability efforts.
Fig: Green theme for Corporate Sustainability

19
Delivery centers and their role in TCS’s GDM are depicted below: -

Global Delivery
Model

Offshore Multilocation Delivery Onsite


Centres in emerging countries
(India) (China, Latin America)

Risk mitigation, Access to local


markets with advantage of
Lower Access to a large lower development cost
Development pool of skilled
Costs employees Domain Proximity to Access to
knowledge clients new
geographies
Fig: TCS the CTO Based Org.

20
TCS’s Point of Focus

From the formative decades of the 1970s and 1980s when the global IT Services industry was disrupted
by the notion that work could be done remotely from places like India, TCS’ innovation has been defined
by its investment in building tools and solutions that accelerates software development for customers
and enables its professionals to deliver high quality of services from off-shore locations.

During the Company’s growth phase in the 1990’s and the early part of this decade, innovation agenda
at TCS focused on enabling the organisation to cope with bigger scale and global expansion as it grew
rapidly in size and reach. Over the last five years, innovation in the Company has been closely linked
with building thought leadership in the global market place through creation of new solutions and
technologies as well as building an innovation ecosystem around the TCS Innovation Labs through
partnerships with universities, start-up companies and other technology companies.

Within the organisation, the Research and Development organisation aligns itself closely to support
TCS’business objectives. There is also an innovations go-to-market team that supports the sales teams
to win new business. The Industry Solution Unit interface works on creating solutions based on R&D
from the Innovation Labs and Co- Innovation (COIN) partners. Co-Innovation comes alive for the
customers in ’Co-Innovation Days’held for each strategic customer.

There is a separate incubation group – an in-house venture capital firm, focusing on big bets of the
future from ‘Inception to Implementation’. This initiative has made good progress with solutions and
services in the areas of advertising ecosystems, mobile value-added services and digital devices. The
Corporate Tools group promotes the use of tools and enables the business units to deliver continuously
improving productivity and quality of services to the customers.

Internally, several initiatives are held on an ongoing basis to foster TCS’ culture of innovation. The TCS
Top10 coding challenge, which was open to associates across organisational units in the enterprise,
created a buzz among programmers in every region and geography. Web 2.0 platforms such as JustAsk
and IdeaMax were deployed to capture tacit knowledge as well as innovative ideas within the enterprise
and were eagerly adopted.

This year has been a watershed year with respect to Intellectual Property (IP) creation in TCS. TCS has
redefined their IP strategy with a view to building a stronger portfolio for future monetisation,
collaboration and risk mitigation. TCS has been granted 42 patents so far in multiple country
jurisdictions, and another 190+ are in various phases of approval.

TCS’ innovation has been widely recognised on the global stage. TCS Mobile Agro Advisory Solution
“mkrishi” won the Wall Street Journal Innovation Technology Award for 2008 in the wireless category
andthe Golden Peacock Innovation Award. US-based publication Infoworld ranked TCS’ Global Certainty
IdeaStorm in its list of Top 100 Innovative IT Projects. Many of the Company’s researchers and Scientists

21
have won individual laurels and awards.

The Company’s R&D organisation has grown and has more than doubled the number of PhDs. TCS’ R&D
has attracted top talent from notable universities across the world and its research internship program
brings interns from many world class universities to the labs.

Corporate Sustainability has always been at the core of TCS’ corporate DNA. With strong focus on
education, health and environment, Corporate Sustainability in TCS is driven by the Tata Group’s vision
of giving back to the society. The primary driver of this effort has been through volunteering by TCSers.
With Maitree, the employee engagement platform as an effective facilitator, TCSers spent over 50,000
person-hours during 2008-09 on community initiatives such as education, healthcare support, training
differently-abled people. A long-term focus has been to effectively use TCS’core competence in IT to
drive literacy through the Computer Based Functional Literacy (CBFL) Program. Conceptualised in 2000,
the CBFL Program has grown to cover nine languages today. Over 120,000 people have been trained
with the help of CBFL till FY09. The decrease in overall instruction hours has led to significant decline in
dropout rates, especially among women. CBFL has been instrumental in enhancing literacy across AP,
TN, MP, Maharashtra, UP, Delhi and Rajasthan while Orissa, Karnataka and Uttarakhand will implement
it shortly.

TCS’ IT Wiz, India’s biggest technology quiz for schools completed a decade in 2008. It is a benchmark in
the inter-school quiz circuit for the intensity of competition and the numbers that it draws. Covering 12
cities, the TCS IT Wiz has emerged as a key vehicle to create awareness about IT among school children.
In 2008-09, around 15,000 children participated. Corporate Sustainability (CS) in TCS has matured to the
level where it encompasses a gamut of activities to sustain social transformation globally. TCSers
worldwide are CS champions and actively involved in local and global causes in North America, China,
Australia and Europe.

Business Oriented themes


Promote Business Agility
Optimise Enterprise Knowledge
Conserve the Environment
Enhance Health Care
Manage Enterprise Risk and Compliance

IT Oriented themes
Improve Operational Efficiency
Application Development and Management
Engineering and Industrial Services
Simplify and Transform
Foster Information Ubiquity
Enable Understanding of Customers and Markets
Enrich User Experience

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The Growth Strategy

In the late 1990s, to accelerate its revenue growth, TCS decided to employ a three-pronged strategy.
This involved developing new products with high revenue earning potential, tapping domestic & other
fast growing markets and focusing on inorganic growth through mergers & acquisitions.

Results surprise positively: Tata Consultancy Services (TCS) declared surprisingly strong results in
Q1FY10. Revenue grew by 0.5% QoQ (v/s an expected decline of 1.8%) and PAT grew by 15.7% QoQ (v/s
an expected decline of 4.0%). EBITDA margins have expanded by 100 bps QoQ, despite this being the
first quarter of the year. The expansion in margins was achieved due to 3.9% QoQ reduction in SG&A
costs and just 0.2% increase in CoGS (essentially due to no salary hikes, decline in manpower, more
offshore execution and low visa costs). Excellent volume growth; contained pricing decline: After a
quarter of decline in volumes, TCS witnessed a strong come back in volumes. Overall volumes grew by
an impressive 3.54% QoQ (v/s an expected decline of 2.0%). This growth was achieved on the back of
270bps shift towards offshore execution. The company also managed to contain its pricing decline to
just 25bps QoQ (v/s an expected decline of 100 bps). With most price renegotiations, complete pricing is
likely to remain stable, going forward.

Sustainable growth indicators still negative: Despite stellar numbers this quarter, the outlook for the
company and the sector is far from sunny. Most of the metrics that point to a sustainable turnaround
(employee addition, higher onsite, higher T&M, etc.) are still not positive. We expect the performance
over the next few quarters to remain volatile between growth and declines.

Management commentary cautiously optimistic: Management commentary on the earnings call remains
somewhat more optimistic compared to Q4FY09. However, they are still cautious about future growth
outlook. All positive statements on good current performance are peppered with comments about
macro level uncertainty.

One of the keys to high performing teams lies not just in the communication of shared goals, but in
getting the climate right. Research by McClelland has shown the strong link between the climate in
which people work and their level of performance. Another notable result of this research is that an
estimated 70% of climate is created by management style. So, if you want to look at eam performance
you have to look at climate, and if you want to look at climate you have to look at the manager's style.

When we look at the challenges facing most business leaders today they talk about the need to:
•Deal with increasingly uncertain environments
•Create year on year results against increasing competition
•Constantly strive to do more with less
•Get teams to take responsibility and step up to the mark

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In conjunction with a team performance intervention, TCS enabled the Director of a Financial Services
company to turn a two and a half year backlog around within three months. It focussed critically on the
need to square up to performance issues, galvanised the team and its leaders into action, forged and
put the spotlight on a common goal and instilled new standards on a previously inefficient group. In a
global media company tasked with integrating five teams into one, TCS provided a start point for their
improvement process and gave clarity on key issues facing the merged team, specifically:
• Enhancing leadership style
• Refining goal clarity and
• focus Improving communication

Working groups focussed on each of these areas and developedaction plans. Finally a bonus system was
developed for managerslinked to the positive progress of the climate, making them fully responsible for
the climate they created. Within a complex pension’s environment, a major IT project team needed to
develop a new platform for their products. The team faced significant challenges including
• A massive increase in scope (moving the IT platform from onecompany to a group-wide
application)
• New political influences and changes through being acquired
• A significant increase in team size

TCS gave the project team a voice; the ability to say what was going right, and what was going wrong. It
gave the management team immediate information around what they needed to do to keep the project
moving and to cope with the increase in complexity and personnel changes within the team.

Having the information that TCS provided enabled the managers to do something about issues as they
arose and to take appropriate action. It allowed the Director to address managerialissues and to make
his team accountable. It also enabled benchmarking of improvements in performance over time and the
comparisons between teams. This in turn increased managers' accountability to get the climate and
performance right. TCS enabled the management team to successfully deliver the project and establish
the new IT system as the group's platform. Fig: Product Development Issues

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TCS Co-Innovation Network (COIN)
Globalization has lead to higher competitions, in which competitors quickly imitate sources of
competitive advantage. Hence, it becomes necessary for companies to successfully innovate on a
sustained basis. Advanced Information and Communication Technologies (ICT) have made it feasible for
companies to collaborate and do Globally Distributed Network (GDN). The continued progress along the
GDW journey combined with the need for tapping capabilities from other companies and the challenges
of innovation delivery helped Tata Consultancy Services (TCS) move to the next level i.e. ‘IT Services
Partner’ to‘Innovation Partner’.

Disruptive innovations are not a result of a single technology invented by a few people but a
combination of various innovations along the entire spectrum (idea generation to consumption) thus
making it necessary to collaborate. The framework of ‘Innovation Network’ is perhaps the only
sustainable way to deliver innovation in today’s environment. Innovation networks as a concept is not
completely new. Typically it has been the technology delivery entity, e.g. Microsoft, IBM driven
innovation networks, or the research entity, e.g. Gartner, Google driven innovation networks that has
been controlling the network and thus being the principle beneficiary. Client companies end up being
customers of the innovation initiatives coming out. In the case of TCS, it is one of the few instances of a
client driven innovation network where the research and delivery elements are participants.

Fig: TCS COIN

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With that 360-degree outlook in mind, TCS has convened a global, interconnected innovation ecosystem
— the Co-Innovation Network, or COIN — that links businesses large and small, well-established and
new, with a broad network of partners, suppliers, leading-edge vendors, outside consultants, academic
institutions, and venture capitalists. The prime purpose of COIN is to create for IT and the business it
supports the largest possible “funnel” of innovative and profitable ideas from numerous, collaborative
sources inside and outside an organization. The key to generating, sustaining, and profiting from
innovation is to participate in a multi-organization innovation network that creates a funnel of ideas full
and rich enough for some of them to survive the journey from thought to business-transforming action.
A true COIN framework needs to be developed to strengthen two key aspects — the ideation
perspective and the execution capability. One of the principle benefits of COIN is spreading the risk of
new undertakings across multiple partners to reduce each partner’s individual risk, while spreading the
search for new ideas across multiple partners to increase the flow of ideas into the funnel and the flow
of innovation back to the partners. Once the funnel is filled with ideas, management can take ideas from
concept to implementation.

Organization Development at TCS

In organizations worldwide today, there is a greater realization of the importance of Organizational


Developmental (OD) interventions in facilitating the rapid changes brought about in the current
competitive environment. Organizations today struggle to balance the tensions between Voice of
Customer, Voice of Technology, Voice of Strategy and Voice of Employee in the context of a globalized
and dynamic market, which makes competitive advantage and sustainability the key mantras of
corporate survival and success.

At Tata Consultancy Services Limited, (TCSL), too OD interventions have been instrumental in facilitating
change management and bringing about competitive advantage. OD has contributed to redefining the
organization’s relationship to its environment, its markets and key stakeholders.

In the years 1998-99, TCS had grown into the largest Indian software company with revenues of over Rs.
1600 crores and racing towards achieving its vision of being global top ten. As pioneers in the industry,
TCS’s strengths included on time delivery, premier position in the industry in terms of revenues, focus
on training programs, quality initiatives, use of good technical tools and procedures and encouragement
of individual excellence in performance. However, TCS was also, at that point in time, grappling with a
few areas of concern with regard to its operational paradigm.

Mounting revenue pressures: The pressure to retain its strong premier position led the organization to
tend towards short-term revenues, and relatively lesser efforts were being put into medium and long-
term markets and activities (such as products and building up knowledge). Though TCS built
relationships with individual customers, Relationship Managers largely tended to focus on obtaining
short-term projects – there was lesser investment on aligning to long-term objectives of customers. The
approach, by and large, was of reactive project management and we were yet to espouse the approach

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of architecting proactive solutions for the customer.

Selectivity in projects: There was a tangible tension at TCS, between generating revenues and organizing
strategically, on basis of technology and business areas, impacting selectivity in projects accepted.
Pressures from customers on schedules was resulting in faster delivery and hence, snowballing into
further pressure on future schedules.

Focus on specialization: There was diffusion of expertise and we were yet to focus on building strategic
expertise in individual centers. Employees were rotated across domains and skills in the interest of learn
ability as well as for meeting requirements. In a sense, there was heightened focus on Voice of the
Customer, in comparison to the Voice of Employee.

Efforts on Experimentation & Innovation: The management at TCS felt that by and large, employees
tended to go straight by the book. Though Dr. De Bono’s techniques were introduced and employees
trained on these techniques to encourage innovation, there was a need to scale up on perceived
rewards for experimentation.

Rewards and Recognitions: The reward structure at TCS was, at this point in time, primarily focused on
individual performance and we were yet to explore the institutionalization of team based rewards at the
organizational level.

Inter group co-ordination & knowledge sharing: Sharing of knowledge was very centre-oriented, and
although, informally, best practices spread by interaction and word of mouth, we were yet to evolve a
formal system which would capture these for ease of replication across projects. Multiple centers and
multiple projects within the same centre ended up resolving the same sort of issues, resulting in
avoidable rework.

Branding and PR: Image building endeavors were not yet an area of focus and, in a subtle way, this
affected the sense of pride of employees. Among educational institutions, this meant greater difficulty
in terms of attracting quality talent, which further aggravated stress among the few key performers in
the organization.

Scenario Building Workshops: An internal organization workshop was conducted with top management
for scenario building. This program focused at a larger level, on the “The TCS that can be “. The idea was
to challenge the conventional ways of thinking and to give shape to the key drivers of change through
realistic listening and dialoguing. These workshops were followed by dissemination and communication
of the scenarios with teams in order to develop a new language in the organization, consistent with the
envisaged future scenario. As a fallout of this workshop, several representatives of senior management
worked on building scenarios as for e.g. on TCS tools and approach to high end consulting. These looked
at ‘what we were and what we wished to be, our competition, changes and challenges with regard to
our business models, technologies, products and support functions’. Further, the factors that would
facilitate the desired change and focuses that needed to be redefined were clearly laid down.

27
Goal Alignment & Balanced Scorecard: In the interest of better alignment, a need was felt to re-look at a
few organizational processes and systems, as for instance, the performance management and appraisal
system at TCS. A Teach-Train-Transfer workshop on Goal alignment was conducted, with help from
expert OD consultants to build the context, to think through goal setting at TCS with a systems
perspective to goal alignment & to explore means of institutionalizing goal-oriented performance
management within the organization.

PROPEL – The Intervention: Culture Building at TCS. PROPEL was introduced as a revolutionary
intervention with the dual objectives of facilitating the exchange of ideas and helping in immediate
problem solving, while also encouraging bonding and self-development among and within teams.
Value Cards at the Large Relationship Value card for the relationship was fallout of the analysis of
tensions existing in the four dimensions as represented by Voice of Customer, Strategy, Employee and
Technology. A tool called “Value Card” was used to analyze the problems faced by the relationship in
relation to these tensions and to arrive at workable solutions to the identified problems, within
designated timeframes. The Value Card helped to effectively capture and track this through the
following steps:
Improvements through Measurements/ Initiatives: Excellence at the large relationship (AEP)
The Account excellence program (AEP) at the large relationship was modeled on the lines of the
Malcolm Baldridge National Quality Award/Tata Business Excellence Model, which touches upon 7 key
categories viz leadership, Strategic Planning, Customer and market focus, Measurement, Analysis and
Knowledge Management, HR Focus, Process Management and Business Results. This was aimed to help
the relationship to evolve towards meeting changing business needs with agility.

Darpan - Reflect and Improve


With aggressive expansion and dispersion of ever-growing associate strength in the relationship,
communication or the lack of it, had emerged as one of the biggest bottlenecks in employee motivation
and managerial decision-making. In this context, an associate satisfaction survey at relationship level
christened Darpan was initiated, with the objective to “Reflect and Improve “at the relationship level
through a better understanding of the explicit and implicit expectations of associates.
Fig: TCS the Way Forward

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TCS -The Paradigm Shift
Post OD scenario:
Organizational Development interventions have been instrumental in terms of enhancing value to the
customer & employee at Tata Consultancy Services. PROPEL as an organization wide intervention,
encouraged sharing of ownership and empowerment to change, as also the sharing of success stories
and best practices across the organization. Valuing of employees was institutionalized through
establishing processes that enable and enhance individual performance, and lead to empowered project
teams. Issue based mentoring was facilitated, with camps and confluences as enabling frameworks.
While confluences invested in personal transformation for the employee, camps invested in improving
theworkspace.

Through Scenario building, a collective transformation of dreams and concerns into response
capabilities was envisaged. Continuous scanning of environment for opportunities and threats was
proactively looked at, to collectively map the business domain of TCS. Goal alignment through cascading
of Balanced Score Card concept could be achieved organizationwide.

There was continuous investment in learning, and an active sharing of knowledge with the aim to
convert learning into action. Further, the focus shifted to adding knowledge through delighting every
customer. The earlier tendency of self-sacrificing hard work was replaced by a shift of focus to
teamwork and valuing of the employee. The OD interventions at TCS,helped push self imposed
boundaries and limitations through challenging organizational boundaries and limitations constantly.

In a nutshell, the OD interventions at TCS have helped build a culture of fostering systems thinking &
creating forums for dialogue, while encouraging leadership at all levels. For the organization at large, OD
helped to reiterate the merits of valuing enquiry, expressing differences, and constantly generating new
knowledge.
Fig: Together We Can

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References

• www.tcs.com
• www.nasscom.in
• www.mit.gov.in
• www.economictimes.com
• Indo Asian News Service.
• InfoTech, IT News- TCS restructures global operations into five groups and 20 units, 13 February
2008.
• Customer Case Study, Tata Consultancy Services.
• Impact of recession in American economy on India, by Mr. Tanveer Malik and Ms. Shweta
Pandit.
• Press Release- Tata Consultancy Services sets up strategic unit to expand presence in emerging
markets.
• Article on rediff business desk in Mumbai- what’s recession? How will US slowdown hit India? -
February 14, 2008.
• Financial Post- contract with India: welcome to a world of outsourcing- by Karen Mazurkewich,
Friday, April 25, 2008.
• Case Study- Evolution of quality processes at Tata Consultancy Services by Dr. Gargi Keeni,
September, 2004.
• Case Study- Innovation in TCS by Chief Technology Officer, TCS, March 31, 2008.
• Case Study- Process Improvement @ TCS by Pragnya Mishra, 29 January 2004.
• Case Study by Asit C. Mehta investment Intermediaries Ltd. on TCS.
• TCS report by Sygnus Business Consulting and Research Pvt. Ltd.
• White Paper- Evolving IT from “Running the Business” to “Changing the Business”.
• Article on Global Network Delivery Model of TCS.
• Press Release- TCS receives highest possible rating in market scope for BIPM (business
intelligence and performance management).
• Journal- Globalization of IT services by NASSCOM.
• Article- TCS to enter into JV with China government, Business Standard, June 30, 2005.Article-
Microsoft and TCS to open Outsourcing Center in China, Information Week, June, 2005.

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