EMBRACING CHANGE: A CASE STUDY ON TATA CONSULTANCY SERVICES (TCS)

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Tata Consultancy Services was incorporated in the year 1968 and is a leader in Information Technology Outsourcing and Management Industry. In spite of several governmental interferences, the company was able to establish a foothold in the IT industry. The first chairman of the company was JRD Tata himself. Initially, they used to provide computer and other IT services to other companies under their umbrella, such as Tata Steel. Implementing punched cards in Tata Steel was one of its first projects. It also has the distinction of doing the first software project contract in India, i.e. the IBRS (Inter Branch Reconciliation System) for Central Bank of India.

In the 1970's TCS went international by bagging an order to do coding, from a computer manufacturing company called Burroughs. Later, IGIC (Institutional Group and Information Company), gave the upgrade and maintenance contracts of its data centres to TCS.

The Tata Research Development and Design Centre (TRDDC) was established by TCS in the year 1981. Later, in 1989, TCS delivered a highly complex electronic depository and trading system called SECOM for SIS, Switzerland.

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During the 1990's, TCS played a lead role in creating a factory model for Y2K conversion. It also made software programs for automatic Y2K conversion.

In the new millennium, they diversified into E-commerce and Bio-informatics.

In the year 2008, the company underwent an internal restructuring to bring agility in its operations.

History Of The Indian IT Industry

The genesis of the Indian IT industry dates back to the 1960's and the Tata's were the pioneers. They had to face several difficulties from the government, in spite of which they formed TCS, which went on to become the biggest software producer in that period. In the year 1973, Santacruz Electronics Export Processing Zone (SEEPZ) was formed. In the 1980's, most of India's software exports was from SEEPZ. During the 1980's, IT exports from India grew from a mere US $4 million to US $105 million in the year 1989-90.

The Indian economy was opened up in the year 1991, thanks to the then Prime Minister, P.V. Narasimha Rao and the current Prime Minister, Dr. Manmohan Singh, who was then the Finance Minister. Internet usage became more common in India during the 90's, which played a key role in the development of the IT industry. The BJP government, under the leadership of Atal Behari Vajpayee created the Indian National Task Force on Information Technology and Software development, since the development of IT sector was one of its top priorities. In the year 1996, software exports reached US $1.31 billion.

The 90's also saw a lot of young Indian professionals seeking jobs in the US and other developed nations. The IT industry was booming during that time and the technical skills of highly educated, tech-savvy Indians was very much in demand. This movement of skilled labour to other countries helped India develop good diplomatic ties with these nations too.

The growth of the IT industry from the mid 90's to the present has been phenomenal. From US $1.31 billion in 1996, IT exports have grown to US $ 50.41 billion in 2008-2009. A break-up of this amount would show that US $36.03 billion was from the software companies, $11 billion from BPO services, $0.39 billion from hardware exports, and $2.99 billion from other exports like design and training. As of today, TCS, Infosys, CTS, IBM and Wipro are the biggest names in the software business in India.

The Course Of Change

TCS became a dynamic company with a strong governing model and a disciplined management which brought about the following advantages to the organization:

Strong vertical presence

Good spread of service offerings

Large number of clients

Fixed-price projects

Significant market share

TCS also identified that a strong value system, importance to excellence and quality, ability to adapt to latest changes in technology and stress on training helped it climb the ladder of growth quickly and emerge as the market leader in India. It gave due emphasis to the following:

Timely delivery

Good position in market in terms of revenue

Training employees in various domains

Stress on quality

Use of latest technology and tools

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However, as the market grew, more players had entered the market with promises to provide software solutions to vendors at competitive rates. Wipro came out with software products by 1979 and Infosys was founded in 1981. By 1991, the Indian IT industry was up for a revolution with globalization embracing the Indian masses.

By then, TCS had to compete with several global players. With an eroding market share, it had to come up with several innovative solutions and technologies to be in the forefront of the IT industry not only in India but also around the world.

It had to address the following issues:

The company was concentrating more on short term revenues and relatively lesser efforts were made to discover opportunities in medium and long-term markets.

TCS did not have the proficiency in all the technologies till then. Due to this, they undertook projects selectively. Moreover, they couldn't strike a balance between generating revenues and managing the organization strategically.

TCS still had to work on specialization. Entering the niche market was difficult as it lacked expertise.

There was an urgent need to innovate and create new products regularly in order to withstand the mounting market pressures.

The company still had to come up with strategies to identify a proper method of rewarding teams in addition to the system of recognizing individuals.

The company did not have a proper branding and PR strategy.

By the beginning of the 21st century, with several global players in the market, TCS identified the need to evolve and bring in changes in the conventional approach that they were following till then. This was aimed at aligning the company towards working closely to cater to customers' needs aiming at more customer satisfaction and to come up with more efficient business strategies. They also wanted to create a more professional environment conducive to increasing efficiency.

Workshops and brainstorming sessions were conducted, during which the top management was able to come up with some viable solutions for the above said problems.

Integrating and balancing out the four voices was identified as an important issue to be addressed. The four voices refer to:

Voice of Wealth - Financial goals, i.e. creation of wealth and expectations of shareholders.

Voice of Employee - Employee satisfaction, i.e. learning and development of each employee.

Voice of Customer - Customer centric goals like customer satisfaction surveys to be carried out.

Voice of Technology - Technological goals like importance on delivery model, cost, quality, etc.

TCS identified the BSC (Balanced Score Card) as a method to evaluate the organization in the four fields that were identified.

The company identified the need to re-look at some of the pre-designed organizational processes and systems. A Teach, Train and Transfer workshop on Goal alignment was conducted. The workshop further introduced the concept of the Personal Score Card, and it clearly outlined what would define goals, outputs and performance management.

As a forum to bring about employee satisfaction and a method of infusing excellence into everything done in the organization, the company came up with a revolutionizing initiative. It was aimed at bringing about exchange of ideas among employees, immediate problem solving and bringing the employees closer on the same platform.

The initiative was brought about slowly and ingrained in the system with the following stages:

INITIATION

The Project managers in every project were asked to identify the gap that existed in their team and come up with solutions to bridge that gap.

WORKSHOPS

The team was allowed to discuss and identify the current situation of the team and to identify the weaknesses.

GAP ANALYSIS

Each role and designation was reviewed to find out the true function and responsibility of each and to find out the right person for the right job.

IMPLEMENTATION

Meetings were held at 6-8 week intervals to monitor the progress as well as to identify areas of improvement within the team.

NEXT STAGE

The goals identified in the implementation stage had to be incorporated into every action of the team and had to become a process in itself in order to produce quality products.

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The company also decided to implement the TATA Business Excellence Model (TBEM, which is based on Malcolm Baldrige Excellence Model) which was a practice implemented annually in all the TATA companies under the TATA umbrella. TCS was marked in accordance with this model and areas of improvement were identified.

TCS today is a strong player with a nationwide as well as global presence. It has produced extremely good results and has the least attrition rate among its competitors in India. It recently bagged a 130 crore e-governance project from the Govt. of M.P. In the international arena, TCS has received orders from Volkswagen and Toyota.