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COVENTRY UNIVERSITY
Faculty of Engineering and Computing
M40EKM – CHANGE MANAGEMENT
Session: 2010
Module Leader:
Dr. Rajeev.K.Bali
Module Assignment
Prepared by:
ABHILASH MUKUNDHAKSHAN (2996950)
Submission Date:
21 may 2010
TABLE OF CONTENT
1
Preamble 3
Company Background 4
Financial Pose 6
Organisational Structure 8
Organisational Culture 11
The Nature of Organisational change 13
Business Strategy 13
Global Strategy 14
Co Innovation Network (COIN) 16
SWOT Analysis 17
Porter’s Analysis on TCS 19
PESTEL Analysis 23
Future Plans 26
Recommendation 26
Conclusion 27
References 28
PREAMBLE:
2
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
3
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 organizations to tender BPO services. In 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 US-based 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
4
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
5
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,
Health-care 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.
6
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
Middle East, Asia-pacific, 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.
7
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
8
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.
9
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).
10
(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.
11
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
12
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
framework-IQMS 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
13
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
14
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
15
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 company’s advantages and
disadvantages in company’s perspective.
16
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.
17
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
18
(“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
19
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 in-depth 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
20
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.
21
PESTEL ANALYSIS:
Pestle analysis will analyse the organizations political, economic, socio-
culture, technological, Environmental and legal analysis of organizations. The TCS
being a Multi National company, these changes will affect the company’s strategies.
22
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
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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 the end of 2010. 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:
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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
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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.
REFERRENCES:
David Jobber (2007) 5thEdition edn. Principles and Practice of Marketing. : Mc
Graw-Hill Education.
Laurie J.Mullins (2008) second edition edn. Essentials of Organizational Behaviour.
England: Pearson Education Limited
Open university (1993) ed. by Christopher Mabey and bill mayon-white Managing
change. England: Paul chapman publishing ltd
Robert A.Paton and James McCalman (2008) Change Management-A guide to
effective Implementation. London: SAGE publications limited
Esther Cameron and Mike Green (2004) 2009 edn. Making Sense Of Change
Management. London: Kogan page limited
George Blair and Sandy Meadows (1996) A real life Guide to Organizational
Change. Hampshire,England: Gower publishing Limited
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