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Analysis of the Tata Consultancy

Service
Published: 23, March 2015

Tata Consultancy Service (TCS) is the world's leading global Information


Technology consulting firm and business outsourcing organization that
envisaged and forged the espousal of the flexible global business
practices, which nowadays facilitate organizations to manoeuvre more
professionally and construct more value.
The IT industry was not has it is now when TCS started in the year 1968.
TCS was started as the "Tata Computer Centre" a dissection of the Tata
group whose chief business was to offer computer services to other
concerns. TCS marked a tremendous growth with marking its presence
in 34 countries across 6 continents, with a absolute range of services
across diverse industrial fields. TCS ranked in top ten in the fortunes
rank list for the year 2009. The concern shaped consolidated income of
US $5.7 billion for economic year ended 31 March 2009 and is listed on
the Bombay Stock Exchange and National Stock Exchange in India.
TCS expanded into China, Hungary, Brazil, and Mexico in order to
incarcerate the opportunities in financial services and services like
Remote Infrastructure management and BPO in those countries, TCS
always offered a unique manner to its global customers by positioning its
brand in the worldwide market. The zenith of all these lead to the
concern's contributions of TM Global Network Delivery Model(GNDM)
across Europe, China, India, US and Latin America as well as
incorporated full overhaul offerings, all backed by the promise of
certainty of experience for customers. By 2007, the value enunciation of
"Experience certainty" was officially initiated, acknowledged and
authenticated by global customers.
As the Indian financial system sustained to grow in the new century, the
necessity for technology to constrain comprehensive augmentation
became part of national schema. TCS, which had been spending
additional, time in domestic IT from the time when its commencement
was well located to assist the National Government at the central and
state level, in its inventive proposals. TCS, by its own initiative shaped a
digitized delivery system. In a manifestation of the company's ground-

breaking spirit and with an aspiration to extend the benefits of the IT


upraise across the country. TCS aptitude to convey high-quality
overhauls and resolutions are matchless. It is the world's first
organization to accomplished an enterprise-wide Maturity Level 5 on
both P-CMM and CMMI, using the most meticulous assessment
methodology - SCAMPISM. TCS Integrated Quality Management
System integrates process, populace and technology maturity through
various ascertained frameworks and traditions including ISO 9001:2000,
IEEE and SW-CMM, CMMI, 6-Sigma and P-CMM.
For maximum flexibility, speediness, and competence, a vigorous IT
strategy is essential. TCS contribution facilitates companies to construct
the most of their IT investments from providing system testing solutions,
application development, management services, and integration
solutions.

COMPANY BACKGROUND:
TCS has the wide spread economical boundaries around 36 countries
with seven physical centres of operations around the world. TCS was
founded by Tata group which was established by jamstji Tata in 1868 an
oldest and respected group of companies in India. The First chairman
was Jahangir Ratanji Dadabhoy followed by Nani Palkhivala. The first
general manager was F.C. Kohli.
TCS first assigned to offer punch card services to a sister corporation,
Tata Steel (TISCO). It later bagged the nation's first domestic software
project, the Inter-Branch Reconciliation System (IBRS) for the Central
Bank of India. It has also provided bureau services to Unit Trust of India;
as a result TCS became one of the first companies to offer BPO
services. In the early 1970s; Tata Consultancy Services in full swing
exporting its services. TCS's inaugural global order came from
Burroughs, one of the first business computer manufacturers. TCS was
assigned to write code for the Burroughs machines for numerous USbased clients. This knowledge helped TCS to bag its first onsite project the Institutional Group & Information Company (IGIC), a data hub for ten
banks, which served to two million clients in the US, TCS was assigned
to assert and upgrade its computer systems. TCS holds the credit to set
off the first software research and development centre, the Tata
Research Development and Design Centre (TRDDC) in 1981and in

1985 the first client committed offshore development centre was


established for Compaq.
Early 90's was golden era for the Indian IT industry; they grew
tremendously due to the Y2K virus and the introduction of Euro. TCS
lead the way for industrial unit replica for Y2K conversion and built-up
software tools which undertook the automatic conversion process and
facilitated third-party developers and customers to use. In 1999, TCS
fortified the opportunities in outsourcing the E-Commerce and the
connected solutions and set up its E-Business division with ten people.
In 2004 it illustrated a vigorous development of contributing half a billion
US dollars to TCS's total revenue.
In the year 2004, TCS was ranked under public sector, though much
later than its competitors such as Infosys, Satyam and Wipro. TCS
entered into a brand new area of IT services (Bioinformatics). The next
two years that followed TCS aced a huge growth in progress both
nationally and internationally.
TCS assists some of the world's major MNC's to take up the accurate
technology-enabled solution that helps them:
Optimize business recital
Decrease product progress time
Get better product differentiation
Smooth the progress of arrangement of business with technology
Join their extensive supply chains
Offer real-time business handy
Lesser functioning costs.

Tata Consultancy Service Profile:


Type: Public BSE: 532540
Founded: 1968

Headquarters:

TCS House, Rave line Street, Fort, Mumbai


- 400 001 India

Key people:
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
& 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)

Services:
Information Technology Consulting, IT
Services, Outsourcing, BPO, Software
Products

Products:
TCS Bancs, Digital Certification Products,
Healthcare Management Systems.

Revenue: US$ 6.019 billion (in FY 2009-10)


Net income: US$ 1.128 billion (in FY 2009-10)
Employees: 150,000 (As on 1 April, 2010)
Website: http://www.tcs.com

FINANCIAL POSE:
TCS financially persists to demonstrate the steady stand in the top
position of Indian IT firms. As the IT outsourcing market records more
rapid growth pace, TCS expressed a steady growth rate in 2008-09,
whose consolidated revenue grew by 23% to 27% which helped TCS to
cross the $6 billion revenue milestone. TCS operating margins improved
to 23.73% by 109 basis points.
Source: squibd.com
TCS have also increased its dividend share to Rs.14 in the last financial
year. The TCS directors have also recommended an issue of bonus
shares in 1:1 ratio and it was the second bonus issue since 2004. TCS
completely focused in helping their customer's relationship with them
simultaneously adding fresh customers and penetrating in novel market
segments and emerging verticals which made them to add 163 new
customers internationally in the past year. TCS's foremost market North
America crossed new high point of revenue above $3 billion and grew
26% in 2008-09 in spite of recession, While Europe's branches faced a
express growth of 38.5% during the same year. It is very significant for
an organization to certify the differentiation of its revenue stand and to
uphold its augment impetus.
TCS always delivers that the 143,000 TCS employees are the supreme
assets of all which includes 50,000 global associates from 67 countries
and TCS trained 93,000 software professionals of which, 22,000 college
graduates in the past academic year which was tremendous growth.
TCS is incessantly investing to unlock new markets and services which
made them to invest in emerging markets like Asia-pacific, Middle East,
Africa and Latin America. The firm's gigantic team of human resources is
serving the TCS's panorama not only in business but also its contact on
the community. TCS made an effective evolution in corporate
sustainability.

Source :( squibd.com)
TCS persists to be a pioneer of growth for the reason of its established
ability to reinvent the business and organisation. The concern is placed
to exert in collaborative mode, significant assessing all that TCS does.
TCS holds a strong position in the future IT global market.

ORGANIZATIONAL STRUCTURE:
"A basic structure distributes responsibilities among the members of a
company. Its purpose is to contribute to the successful implementation of
objectives by allocating people and resources to necessary tasks and
designing responsibility and authority for their control and coordination"
The three levels of organizations are technical level, managerial level
and the community level. (Mullins, 2008) The organizations are
differentiated based on the task, the employees work and the nature of
company and its HR policies and conditions." A hierarchy is handled in
order to treat people equally in companies; Treating equal is just that
they are literally equal, In order to extract best from an employee, the
person above him will treat them as one and the same to extract the
maximum and best work from them Functional organization, matrix
organization, and line organization are three common types of
organizational structure" (Mullins, 2008). The main intention of
organizations is to distribute the tasks; the main aspect is to preserve the
relationship between employees of different stages in order to drive them
towards the single task and to monitor the progress of the assigned task.
The TCS have a very well designed organization.
The organizations can be classified into two main divisions they are
Centralization.
Decentralization.
Centralization
A simple and effective execution of policies for an entire organization.
Gives a reliable approach over the organization.
Makes trouble-free organization and administration control

Better employ of specialization including better amenities and


paraphernalia.
Decentralization
Facilitated verdict is to be nearer to the operational level of work.
Amplified receptiveness to local conditions.
It persuades inspiration and confidence of the staff.
Observance progress in compliment and more supple structures.
TCS offers services in eight areas of service: Business process
Outsourcing, Business Intelligence and performance Management,
Enterprise Solutions (CRM, ERP, and SCM) IT Consulting, Application
Development and Maintenance, Engineering and Industrial Services, IT
Infrastructure services, Testing and quality Assurance. TCS's are divided
in following divisions Financial Services, Energy and Utility, Banking, Life
sciences and Health care, Insurance, Securities trading system, Retail
and Consumer goods, Telecommunications, Government and
Transportation.
TCS follow a standard organizational growth which helps them to
organize the vast team under single board of directors; the type they
follow is matrix organization.
"The matrix organization is a combination of functional departments
which provide a stable base for specialized activities and a permanent
location for staff and units that integrate various activities of different
functional departments on a project team, product, programme,
geographical or systems basis" (mullins 2007).
(www.tcs.com)

DIS ADVANTAGE
ADVANTAGE
More involvement can cause aggravation and uncertainty among team
members.
Adequate meeting makes this type more time consuming.

A detailed understanding is needed in order to be a part else result in


bad performance which affects the total team work.
A very good ability is needed in order to perform better and draw
attention.
Distribution of possessions is supple among the organization.
Facilitates in intricate verdicts and appropriate for recurrent
transformations occurs in unbalanced atmosphere.
To meet demands from customers and helps to make unity within the
team.
Provides an opportunity to extend both practical and product skills.

ORGANIZATIONAL CULTURE:
Even though the organizational culture will look like a similar saying it's
really solid to describe and elucidate as the word culture is derived from
anthropology. In simple it can be described as the reflection of
fundamental works about the way by which the work is performed.
"The collection of traditions, policies, value, attitudes and beliefs that
comprises an invasive framework for everything we do and believe in an
organization" (Mullins, 2008).
The corporate cultures can be categorised by two influential factors,
The degree of threat coupled with the organization's manners
The pace at which organisations and their employees obtain comment
on the success of verdict or strategies.
If the customs are adopted by the employees, it amplifies the supremacy
and rights of management in three ways.
Categorizes themselves with their organization and consent to its decree
when it's the defined fascination to do.
To integrate the organization's worth when they are right.
Enthused to accomplish the organization's objectives.
The types of Organizational culture are Power culture, Task culture,
Person culture, Role culture.

A well-built organizational culture lies on eight strong pillars of


"OCTAPACE" referring to authenticity, confrontation, autonomy,
openness trust, proactive, collaboration and explicitness. Organization
cultures can be categorized into strong and weak cultures. The
organizational culture of TCS is translucent in stipulations of pay and its
HR policies. There is a towering level of employee engagement as the
concern pay structure stimulates and supports employees to achieve
better to receive an excellent sum of their recital pay. There is an
incessant improvement and growth of workforce through different modus
operandi like the T model. It is a proficiently managed organization with
client fulfilment as its top most precedence.
Workforces are given lofty sum of respect and everybody is addressed
as an "ASSOCIATE" to make them believe that their input really matters.
But there are some minorities who believe that TCS follows a cold
culture, by cold they signify that persons are not concerned about others.
Few think that TCS has an energetic culture and there are lots of
communal performance which the concern takes on to help the
underprivileged and poor. One such initiative is the TCS Maitree, it is a
non-profit auxiliary of TCS which utilize the employees to approach
further on and educate the under privileged children or seize a camp in a
country's rural area to educate them regarding the knowledge on
computers. PS - T Model is new software intended by TCS, all the
workers information pertaining to his possession, competencies, skill set,
etc are fed and then the software gives the three best domains where
the employee would best be suited. This model when launched will help
in smooth inter- departmental relocates. TCS values are ethical, in which
TCS have its own set of rules, policies, values which is called "TATA
Code of Conduct" which was explained by HR with immense efforts
during induction process, in easy words it can be described as that "TCS
is not doing business from people but doing business with the people".
The TCS's culture is dynamic and favourable for vigorous growth and
antagonism.

THE NATURE OF ORGANIZATIONAL


CHANGE:

"Change is persistent manipulate. It is an unavoidable part of both social


and organizational life and we are all subject to continual change of one
form or other" (Laurie j Mullins 2008)
There are factors which are substantial to the organization change are
Global inflation and economic meltdown.
Non-availability of resources.
The limitations on products lifecycle due to frequent revises in
technologies.
Very high competition in escalating and capturing new market places.

BUSINESS STRATEGIES:
TCS names its business divisions as Industry Service Practice. TCS has
it maximum revenue from Banking Financial Services and Insurance
Sector.

GENERIC BUSINESS STRATEGY:


Low outlay of Global delivery 24X7 model.
Delivery with the help of established release and excellence frameworkIQMS in time.
A whole focus on customer retention and client relationship in order to
uphold the business revenue which is 95.6%
Distinguished in low end services in both capital and price
A solid protection from the money fluctuations with currency
prevarication.
Owing to its tough knowledge management system and resource
strength, TCS has been triumphant in attaining the cost leadership in the
Industry.
In recent years TCS has been following a further resolute strategy where
they are moving towards the requirements of customer and the nature of
business as like Middle East, Europe, and Asia-pacific. TCS focus much
on customers and the area rather than being broad.

A full Focus on the centres of Excellence(CoE) to strengthen potential in


order to build the state-of-art elucidation in particular technologies such
as testing, virtualization and architecture. The high end skills and scale
will help TCS to embark upon huge projects aimed at converting clients,
IT applications and Infrastructures.

GLOBAL STRATEGIES:
When the global strategy of TCS is being closely observed, it will
illustrate an influencing labour cost in South America, China and some
parts of Europe. Employing overseas experts into the post of Directors in
order to obtain the frequent changes in the business is also can be
referred as one of the key strategies of TCS
Clayton M Christensen(HSB Professor, joined TCS in 2006)
Dr. Ron Sommer (former chairman of the board of management of
Deuteshce telecom AG, joined TCS in 2006)
Laura M cha (Member of Executive Council of the Hong Kong special
Administrative Region(SAR) and Non-Executive Chairman of HSBC
investment, Asia ltd)
TCS have a keen view in looking US and UK for the Business Revenue
markets and India for the skilled employees. TCS is very keen in
establishing global delivery centres outside India which can demonstrate
TCS as a Global company. TCS was the first one to set the global
delivery centre in China which distinguished TCS from other corporate
companies. In recent years TCS was frequently changing its approach
towards global market; recently TCS reconstructed its structure towards
its global operations to implement a Customer centric and integrated
approach which is anticipated to assist in avoiding the risk factors arising
from the Economic Meltdown in western countries. TCS's operation units
are mainly divided into five main divisions.
The well established markets are North America, U.K and Western
Europe and the new markets are Latin America, Middle East, India and
Eastern Europe. The new restructured plan was considered as the very
good change by the TCS as it is attaining impetus in Europe and other
markets, which is obvious in the company's marked growth rate of 40%
every year. The operations In Middle East and Latin America had also

seen a substantial growth. TCS had built new delivery and offshore
centres in Latin America like Uruguay, Mexico and Brazil.

STRATEGIC ALLIANCES:
TCS is always keen in upholding the strategic relationships with various
International technology vendors. These relations are distinguished in
various magnitudes such as service provider, customer, supplier, and
alliance partner. The relationships with the international technology
vendors have made TCS to maintain a holistic. TCS made a joint venture
with these vendors on joint research influencing each other strengths to
research and to develop the best breed offerings.
Joint advancing engagements.
Significantly new or improved solutions.
Joint go-to-market strategies for the solutions.

ACQUISITION STRATEGY:
TCS is concentrating the growth in two ways the organic means and
inorganic means. The Inorganic way is in the course of acquisitions of
companies which craft business sense to TCS. The concerns should
adjoin great value to TCS. The Business with CMC is assisting TCS
taking a very sharp gaze to the domestic Industry. Both companies have
synergies in the government sector. They made various agreements with
various companies some of them are the agreement with the citi group
to transfer 12,000 employees in banking sectors for cash and external
support in IT. Tata InfoTech Limited (TIL) was merged in early 2006. It
was also a software service company like TCS which have branches
around the world like America, Europe and Australia. Comparable to the
financial venture made greater than, TCS yet again prolonged its
banking commodities and shared its European operations after attaining
a 75% equity wager in its Switzerland-based partner, TKS-Teknosoft.
TKS was the marketing representative for TCS in Europe.

TCS: CO INNOVATION NETWORK (COIN):

TCS is following a coin strategy in order to face the competition as the


globalisation has created a elevated competition among the IT
companies. It is necessary for the IT companies in order to follow an
innovative technology thus resulted in the Advanced Information and
Communication Technology which made practicable for companies to
collaborate and perform "Globally Distributed Network (GDN)".
Disorderly improvements are not the consequence of a solitary
technology pretended by the minority of people but the combination of
similar technologies may result in getting a combined innovative
technology which will be much more effective and useful for the
companies to perform globally. This concept of innovation network is not
novel; classically it was the technology releasing body e.g. IBM's driven
Innovation Networks and Google's Gartner Innovation networks are
already been in existence, for TCS it is the customer driven innovation
network where the participants are delivery rudiments and explorations.

SWOT ANALYSIS:
SWOT analysis is a prearranged loom to calculating the strategic
position of a business by identifying its strengths, weakness,
opportunities and threats. SWOT offers an uncomplicated way of
analysing the results of marketing review. Internal strengths and
weakness are abridged as they communicated to external opportunities
and threats. (Jobbers; 2007)
It analysis the complete strategy of the company based on policies and
the business method which they follow. This pictures the companies
advantages and disadvantages in companies perspective.
The SWOT for TCS is as follows,

STRENGTH
widespread universal reach
Strong economic presentation
Human management skills
Innovative lab system
The Fame of the founder

WEAKNESS
Momentous publicity to financial service markets.
Deficient in level of consulting operations.

OPPURTUNITIES
Expansion in worldwide IT services
Focus on SMB segment
Expanding maneuvers in countries like china
Focus on high end business and consulting

THREATS
The Hike in Employee costs
Powerful competition from overseas firms like Accenture, IBM etc.
Merge in the end markets
Currency gratitude
Increase in competition from low wage.

STRENGTHS:
The popularity and the reach all over the global markets made TCS a
reputed and known firm in the Global IT Market. The TCS had launched
the branches all over the world which can be considered as the primary
strength for the TCS. TCS made clear and strong economic
presentations around the globe which makes its clients a financial
confidence about the company. The International base of TCS, India is
known for its skilled employees in IT field which naturally made TCS very
strong in Human resource. TCS is also skilled in the management skills
as its board of directors are from overseas countries in order to adopt
the strategies from all the parts of the world. TCS have a very good
infrastructures and innovative labs with all the latest technologies which
help TCS employees to update the latest technologies and to make

research in various fields. The fame of the founder is also an added


strength for the TCS.

WEAKNESS:
The excess exposure on the financial service markets which usually
need to be kept confidential is considered as the main weakness of TCS.
TCS is also lack in effective consulting team which show a strong
reflection of decline in the growth cycle of the TCS, Being a company
which works on Outsourcing projects usually needs a very good effective
consulting team which acts as the bridge between the clients and
company. TCS really lacks in that.

OPPURTUNITIES:
TCS being a fast growing IT firm is very keen in establishing and
expanding its business to almost all the parts of world right from India,
China, Latin American countries, Asia-pacific and etc which opened up a
great business opportunity for TCS. The Focus in the SMB segments is
also lays a very good business opportunity for TCS. Expanding the
global branches to void countries like china, Asia-pacific will extend the
business opportunities of TCS in future. TCS have a very good
opportunity in high end business and consulting in the future if they
rectify their weakness in consulting service.

THREATS:
The rapid growth and development in India and other global areas, A
common demand for employees arise which result in the increase of
cost for employees. TCS has to face a very high competition from
overseas and well established companies like IBM, Accenture and etc.
The complete merge in the End markets is also a biggest threat for TCS.
The advantage on rupees always stands as the biggest threat to all IT
companies in general. Increase of competition from low wages is
another threat. The similar Indian firms like Wipro, Infosys are also at
their full phase of capturing global markets. TCS has to face a cold war
against the threats which the company faces. As all the competitors of

TCS are equally strong and effective in which TCS can't ignore the
supple one.

PORTER'S ANALYSIS ON TCS:


Porter's tool will help to analyse the main five competitive factors which
affects the company's growth
("www.emeraldinsight.com)
Being TCS itself is an supplier, it do not have problem with the suppliers,
the other four forces which are problematic to TCS are the threat of new
entrants, the bargaining power of customers, the threat of substitutes
and the spirited rivalry between the existence.
In the untimely days the software exports, the software wholesale market
was overlooked by very few massive like Accenture, EDS and IBM,
where the Indian concern were outlined as small level companies in
result the TCS and other Indian software companies competed
themselves in the lower end of the business, which resulted TCS and
other organizations to choose small projects and tasks which are simple
to do.
TCS also faced a customer market that was conquered by the insurance
companies and huge banks. While TCS keenly hunted for alliances with
larger sellers as a competitive strategy, TCS most successful approach
was to honestly loom clients and admit the minor charges that its
competitive pose dictated.
The entry of new companies have reduced rapidly as the huge
companies like TCS, Infosys and Wipro have developed and grown huge
in their market share, size and reliability with their customers. Though,
the companies struggle to decrease their straight rivalry through
demarcation of manufactured goods, in every market there has been
enormous competitors.
TCS has to work seriously upon reducing the bargaining power of
customers. TCS can prevent price strategy in mixing up with purchase
decision. It means that TCS should bring more than undifferentiated
indoctrination by moving up the cost sequence. Such approach might be
difficult in the software outsourcing business as the clients have an indepth domain enterprises and rights of inclination to hold on to the work

allocated under considered consulting. The clients very well know that
the complete bargaining power lies in the strategic consulting;
outsourcing that may reduce their bargaining power. TCS have to build
up enough knowledge so as to construct outsourcing these errands a
convincing worth plan. Of course, it is exactly in this empire that the
multinational outsourcing firms such as Accenture, IBM, and EDS are the
most vicious customers.
Falsifying groupings are often viewed as a superior approach to offset
client's bargaining command. Though, constructing alliances with
companies functioning in client's sites have to be low-priced as this
would advance focus on TCS in application progress. On other side, the
attainment of a medium-sized US firm with sturdy customer relations and
domain expertises could offer a striking opportunity. Even if expenses
per employee would increase, the go up would be minute since workers
needs are lesser for higher value-added jobs.
The main anxiety for TCS is opposition from existing companies like
Wipro, Infosys and CTS as it has produced rivalry for active dealings and
twisted noteworthy pricing stress. Internationally, Companies like EDS
have sited themselves as competent of handling huge, "turnkey"
ventures which can distinguish themselves from contestants such as
Accenture and IBM that spotlights on superior value-added jobs such as
consulting. This proposes an organically-driven expansion strategy for
TCS: as TCS should persist to do the similar sort of job that it presently
do, but should attempt to arrest a better section of the value-addition by
accepting huge projects. Although it has exhibited a potential in distant
project management, TCS would be requisite to increase the same
capability.
But, there are also few risks which prevail in this strategy. TCS's huge
dimension implies that it might have already exploited wealth to amount
in applications improvement. Adding to that, the strategy may tender the
latent for huge growth since it essentially engages elevated value-added
actions. Before, this was hard, partially owed to the technical complexity
in rejecting the value-chain away from the modularization of appliances
programming. In recent years, though, systems design, manufacturing
services, and systems integration job have increasingly been outsourced
suggestive of that, if the abilities are at hand, those works could be
completed in India.

The threat of substitutes are mainly from the China, Philippines and
eastern Europe which emerge as a biggest threats to the Indian IT
companies, which is mainly due to the low cost. The companies from
these countries quote very low price for the same quality of products as
the Indian Companies do, which creates a great impact on medium to
long term projects. It is difficult for TCS being operated from India to
attain the organic growth.
As the globalization is at its peak growth TCS view on competitors
should be broad and effective. The domestic competitors itself is capable
of offering a strong competition for TCS.
The uncontrollable fact that IT companies face globally in the
competition is the bargaining power of customers as the increase in the
competition and globalization resulted in the production of quality
products with low price which finally makes the customer to gain the
maximum profits. As the IT global market is broad with very high
competitors it is unavoidable to prevent the new entrants into the market.
The TCS may not have competition in the domestic market but globally
TCS is still viewed as the company which works low- level projects.

PESTEL ANALYSIS:
Pestle analysis will analyse the organizations political, economic, socioculture, technological, Environmental and legal analysis of organizations.
The TCS being a Multi National company, these changes will affect the
company's strategies.

Political:
The three major revenue zones of TCS are US, Europe and India. The
political structure in India is constant as the ruling party started to rule
again after a majority win in the 2009 General Election which is a
positive view for the company as the political influence will remain
constant in this zone. In US the government had announced a new rule
on outsourcing as the companies which outsource the work outside US;
they will not get the Tax benefits which even creates a negative phase.
TCS is very well established in US as it can work from US itself, But
even then the ratio of outsourcing the new projects will be much reduced

in future. The government organizations and PSU had decided to give


more domestic projects to TCS which is positive strategy.

Economic:
The Steady fluctuation in the International market and the fluctuation in
the country's currency rate are considered to be the major negative
influences. The Global meltdown which paused the IT's vigorous growth
had reduced the IT business internationally. But even then the TCS and
other firms where managed to maintain their breakeven profits. The
Domestic Markets had grown by 20% and approximately reached USD
25 billion in 2009-10 which was estimated by NASSCOM which is an
advantage for the Indian companies in order to maintain the equilibrium.
The crash in the Real estate market is also considered as one of the
advantages for the companies as they can buy sites for new branches
for lesser rates and the reduction in the Rental costs. The rapid increase
in the complexities in IT Industry, the new innovative services and
products from competitors. The new competitors entering the IT market
is not a very big threat but also to be taken in account.

Social:
English is taken as the official language of TCS which made the
organization to make the business dealings with the English speaking
nations like US and Western Europe. The manpower available in India is
an added advantage for the Indian IT firms. The availability of
Technicians in India is bit more than the resources available to the other
countries. India is going to lead the next twenty years of spam for
holding the highest working population globally, which is a major
advantage for all the IT companies. The recent job cuts in US and other
European countries where TCS widen their business boundaries which
lead to give new job offers to the native peoples, which created a soft
bond towards the company. The availability of high quality manpower
globally, the frequent and rapid transform in consumer lifestyles, the
improvement in the relationships between the clients.

Technological:

India is considered to be a well developed country in the


telecommunication field which provides the lowest call rate(1-2 US
cents)which makes Indian firms like TCS to thrive high in the field of
BPO, as the core of these business is to communicate among customers
and company representatives. India holds the largest population with
mobiles and an average population expected to have the subscriber
base of 503 million. TCS holds its global head quarters in India which
has the highest telephone network after china.TCS is much more
concentrating in the next generation on wireless which the global
technology is attracted towards that.

Strategic Partners
Microsoft - Global System Integrator Partner
IBM - Global System Integrator Partner
Oracle - Global System Integrator and Global Certified Advantage
Partner
SAP - Global Consulting Partner

Growth Engine Partners


Siebel - Consulting Partner
SUN - System Integrator Partner, GSS Partner
BEA - TCS is BEA' Strategic Partner
Web Methods - Global System Integrator, Preferred Offshore Partner

Legal:
IT firms in India is frequently facing the legal issues from the employees
and other mutual competitors, Each Indian IT Company is extended their
boundaries globally and have their own global HR policies, all the IT
companies including TCS have undergone the issue of legal bonding
made to make the employee to stick into their companies for long term
which is an negative aspect on TCS. Except in US TCS is getting tax
benefits globally.

Environmental:
The Environmental concern of TCS shoots from the Tata Group which is
also added in the "Code of Conduct". TCS considers the change in the
climate is considered as the main aspect which affects the economic
stabilities. TCS is much more concentrated on the environmental issues
like global warming, energy utilization, water consumption and etc.

FUTURE PLANS:
TCS UK division and its subsidy is focusing on the Insurance market in
the BPO, the Diligenta's deal with the pearl conformed their future plans
of entering into the Insurance Industry. TCS is planning to expand further
in the globally in order to capture new markets like China, Philippines,
Asia-pacific, South America, Mexico and Eastern Europe. TCS has
invested around INR 500 crore in India in order to develop its domestic
infrastructure within India. TCS has invested around approx 150 billion in
order perform research on next generation technology and wireless
"We are strengthening our product line-up to position the company for
the future, (Mr.Ramadorai, CEO)". As the CEO of TCS said TCS has
invested an respectable amount of money in order to strengthen their
product line-up

RECOMENDATIONS:
The first and prior recommendation is to change its vision statement as it
views and felt like a short viewed, as TCS should need a vision which
reflects vigorous thinking and enduring thinking. Anticipate observing the
site persist to merge. Customers will hunt for reducing expenses and
focus on less supplier relationships as the market deteriorates. TCS
should take this occasion to get better its market positioning. Certify
promotion communicative it's worth intention to all stakeholders fretful
led. In market Meltdowns, marketing can work as a differentiator.
TCS should alter focus from Low cost advantage to high quality services
imposing a quality being the initiator in the industry. Offer more high-end
works in price chain. Rapidly adjust and expand client assurance in high
growth markets. In Financial Year 2009, Indian home market grown by

more than 20%, as well as TCS income from India augmented only by
6.46%. TCS should influence its success (IRCTC success done by its
subsidiary - CMC, Passport project etc.) to constrain the augmentation in
this market.
TCS should not be influenced exclusively by short-term shareholder
pressure. The depression is at the top of each company's schema, but
those suppliers that receive a long-term outlook will employ this occasion
to organize for the primary modifications in business dynamics that will
appear. Those suppliers geared up for the recent ecosystem will be the
ones to prosper once the dark part of economic chaos have lifted.

CONCLUSION:
TCS founded as the small computer centres now emerged as a very big
multi- national IT company in the span of 40 years. TCS which is
considered as the one of the oldest and biggest MNC from India is still
growing in the spot-light with a new dimension. The roots of TCS are
also can be taken in account for this massive growth. The growth of TCS
in global market creates a positive impact on India and Indian economy.

Acquisitions[edit]

Name

CMC
Limited

Acquisiti
on date

2001
October

Activiti
es

Count
ry of
HQ

IT
Services

IND

Pri
ce

$33.9
m

Employe
es
(at
acquisiti
on)

3,100

[32][33][34]

BPO
expertise in
Airline and
Hospitality
sector

[35][36]

Acquire
expertise in
insurancedomain
consulting

[37][38]

2004
January

BPO

IND

$5.1
m

400

Aviation
Software
Developme
nt
Consultanc
y India
(ASDC)

2004
March

IT
Services

IND

$3.1
m

180

2004 May

Business
Process
Outsourci
ng

IND

$13 m 400

IT
Services

SW

$4.8
m

Swedish
Indian IT
Resources

2005 May

Referen
ce

Gets
Embedded
Expertise &
good
Domestic
customer
reach.
CMC
Amalgamat
ed with
TCS on
April 28,
2015.[1]

Airline
Financial
Support
Services
India
(AFSI)

Phoenix
Global
Solutions

Notes

n/a

Acquire
blue-chip
European

[39][40]

Name

Acquisiti
on date

Activiti
es

Count
ry of
HQ

Pri
ce

Employe
es
(at
acquisiti
on)

Notes

AB (SITAR)

customers
like
Ericsson,
IKEA,
Vattenfall
and
Hutchison;
SITAR was
TCS
exclusive
partner in
Sweden
and a nonexclusive
partner in
Norway.

Pearl
Group

2005
October

Acquired
life and
pension
outsourcin
g business
from Pearl
Group;
Domain
knowledge
of life and
pension
underwritin
g business.

Financial
Network
Services
(FNS)

2005
October

Insurance

UK

$94.7
m

Core
Banking
Product

AU

$26 m 190

950

TCS
acquired
core
banking
solution
product
(BANCS)
and access
to 116
customers

Referen
ce

[41][42]

[43][44]

Name

Acquisiti
on date

Activiti
es

Count
ry of
HQ

Pri
ce

Employe
es
(at
acquisiti
on)

Notes

Referen
ce

in 35
countries;
FNS was
an existing
partner for
TCS.

Comicrom

2005
November

Banking
BPO

CHL $23 m 1,257

Tata
Infotech

2006
February

IT
Services

IND

$259.
2m

TCS
Manageme
nt

2006
November

IT
Services

AU

$13 m 35

3,600

Entry into
Latin
America;
Access to
payment
processing
platform.

[45][46]

The
merger of
Tata
Infotech
added 15
new
Fortune
500 clients
and
enhanced
TCS
systems
integration
and
infrastructu
re service
capabilities
.

[47][48][49]

Access to
Australian
clients

[50][51]

Name

TKSTeknosoft

Citigroup
Global
Services
Limited

Supervalu
Services
India

Acquisiti
on date

2006
November

2008
December

2010
September

Activiti
es

Banking
Product

Captive
BPO
ofCitigrou
p Inc.

Captive
IT/BPO
unit of
Supervalu
Inc. in
India

Count
ry of
HQ

CH

IND

IND

Pri
ce

$80.4
m

$512
m

$100
m

Employe
es
(at
acquisiti
on)

Notes

Referen
ce

115

Expand
product
portfolio by
acquiring
rights to
Quartz and
ownership
of Alpha
and eportfolio,
enhanced
presence
in
Switzerlan
d and
France

[52]

12,472

TCS
acquired
key
Banking
and
Financial
Services
(BFS)
domain
knowledge.

[53][54]

600

TCS had a
deal with
Supervalu
to have
their
Software
Outsourcin
g to TCS
and
acquired
Supervalu
India.

[55]

Name

Computatio
nal
Research
Laboratorie
s

Alti SA

Acquisiti
on date

2012
August

2013 April

Activiti
es

High
Performa
nce
Computin
g

IT
Services

Count
ry of
HQ

IND

FRA

Pri
ce

Employe
es
(at
acquisiti
on)

Notes

$34 m 80

Acquire
expertise in
High
Performan
ce
Computing
(HPC)
application
s and
Cloud
services

$97.5
Mn

Access to
blue-chip
French and
European
clients in
banking,
luxury,
manufactur
ing and
utilities
sectors

1200

Referen
ce

[56][57]

[58]

Akhilesh Tripathi, who heads TCSs operations in


Canada, talks about spreading roots in a business
environment where you are what you deliver
Canada is distinct from the US and Akhilesh Tripathi has a fine understanding
of this not-always recognized fact. As country manager, TCS Canada, Mr
Tripathi heads a business that stands separate from its big brother to the
south, and there is a lot to be said about that reality.

Mr Tripathis primary responsibility with TCS Canada is expanding the


organizations business footprint in an emerging market, but theres more to it
than that, and it includes building relationships with industry, government,
academia and the social sector. In this interview with Christabelle Noronha,
the 12-year TCS veteran who lives in Mississauga, Ontario, with his wife
and son spreads the good word about operating in a country that came late
to the outsourcing party.
Could you tell us how TCSs Canada operations have evolved?

There is an emotional value attached to TCSs presence in Canada. In 1948,


FC Kohli did his undergrad studies in Canada and in 2007 he got his honorary
doctorate from Queens (his second in Canada after Waterloo University). We
had friends here even before beginning operations in 1993. A second factor
that helped us is that Canada is a commonwealth country; the legal setup, the
ways of doing business, the manner in which people behave all of these
are easy to relate to. The third advantage for us is our proximity to TCSs
largest market, which is North America.
We started operations back in 1993-94 with Nortel. This was interesting
because Nortel started working with us in advanced technological areas at a
time when outsourcing was unheard of in these parts. The second inflection
point happened when the Canadian Depository for Securities began looking
for a global partner to help it with solutions for clearing and settlement; it
floated a global bid which we won. Thats the time we opened our office in
Toronto; we now have sales offices in Montreal and Calgary, a presence in
Vancouver and Ottawa and development centers in Mississauga and
Montreal.
TCS now has some 2,000 people supporting our business in Canada. About
half of them are physically present in Canada while the rest are involved in
servicing Canadian customers from our global locations, largely out of India.
We have done well in the banking sector, in insurance and in telecom. We
also have a footprint in the provincial government, in manufacturing and a few
other verticals. Business has been good; if you look at aggregated growth
over the last three years it has been roughly 100 per cent year on year.

What about the energy segment?

Energy is a big market and a focus area for us, as is utilities. Canada is one of
the first countries in the world to implement what are known as smart-metering
initiatives, the latest in terms of technology and environment friendliness and
with a system that allows users to streamline their consumption patterns.
How do you view the market here?

First of all, Canada is experiencing the benefits of globalization. It has been a


bit late in adopting global practices, specifically in the context of outsourcing,
but the value of the dollar has given the country an economic reason to
pursue this aggressively. Second, there is a skill gap that exists in this
marketplace. Enrolment in the mathematics and science streams is not as
high as it should be, which translates into a greater demand that needs to be
fulfilled. This can be accomplished by service providers with the capability to
deliver value. The third aspect is that the market does not have many players
like us, organizations with a track record of executing projects on time while
realising all objectives. Its a market where vendor maturity to bring benefits of
globalization to clients has not been too pronounced.
Whats the difference between TCS in Canada and in the US? Do you have a lot of
competition?

The Canadian market is different from that in the US. Its easy to mistake
Canada as the 51st American state, but thats not the reality; this is very much
a Commonwealth country. Youll find a lot of similarities with the UK, for
example, or Europe. Relationships have a lot more value. Perseverance
rewards well. Its a well-integrated society and market; it doesnt punish you or
look at you differently because of where you come from.
Is the economic recession in the US affecting your business in Canada?

There are two sides to this. Given the strong dollar, we believe demand
should improve. Given the commodity and energy prices where Canada is
so rich we think demand should improve. At the same time, we have seen
cautionary measures creeping in because things are not going well south of
the border. Canada is not affected directly, but there is an indirect effect due to
the fall in stock prices and cost-control factors. The US is Canadas largest
trading partner, so there will be a reaction to what goes on there, but there
hasnt been any softening of the economy as such.

How strong is the brand awareness that TCS enjoys?

Its growing, and its a continuous exercise. We are much better known where
the markets are sizeable enough, in greater Toronto, for instance. We have
embarked on a campaign experience certainty that features the
Canadian Depository as a customer. We are visible in forums and industry
bodies across Canada. Additionally, we are active in the academic and
government segments.
What exactly are you doing with academia?

We engage with students and faculty through various initiatives, we are hiring
people from academia in various roles at TCS, and we are doing collaborative
research in many areas.
Do you have any business alliances here?

We work closely with SAP and Microsoft, among others. These are our
primary partners and we work with them to create opportunities and provide
services to customers.
What percentage of TCSs employees in Canada are locals?

Our development center has some 150 people, of which about 50 are locals.
What are your focus areas going forward?

We have significant room to grow and win new customers, given that we
started looking at Canada as a consolidated market only in 2005. Its a large
enough market for us to multiply our customer base. We have done well in
banking and insurance and we will continue to solidify our position there. In
addition, we are confident of our growth in energy, resources, utilities,
healthcare and retail.
How supportive is the government to businesses such as TCS Canada?

The government knows our role and has been extremely supportive. They
recognize the skill gap that exists and the challenges that need to be faced. It
also understands that there is a lot of interest in doing work with India and
increasing bilateral trade (the Commonwealth factor). There is a lot of respect
in Canada for the Tata brand.

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