tcs: TCS will unveil a new operating structure with four distinct business groups

Mumbai/New Delhi: Tata Consultancy Services will unveil a new operating structure with four distinct business groups being created to drive the next phase of growth for India’s largest software exporter as it targets the next stage of $50 billion in revenue, told ET senior executives in the know.

From April, the IT giant will organize all of its activities into groups called – acquisition, relationship incubation, business growth and business transformation – presenting an industry-first model that moves away from the “traditional three-dimensional framework of geography, verticals, or services,” sources said, while focusing on customers, their changing digital needs, and faster delivery times.

“The operating model will be aligned with the customer journey at every stage, leaders who have been primed (for this model) will lead these new groups,” one person quoted above said.

Susheel Vasudevan, currently Group Head of Manufacturing and Utilities, will lead the relationship incubation group while Krishnan Ramanujam, President and Head of Business and Technology Services, will lead the growth of the business. Business transformation for long-term and large customers will be overseen by Debashis Ghosh, who is currently president of life sciences, healthcare, energy and utilities. Kamal Bhadada, who is president of the communications, media and information services business unit at TCS, will lead a group focused on new business models.

“Leaders of the four groups will report directly to CEO Rajesh Gopinathan who is leading the transformation,” said people with direct knowledge of the changes underway at the $25 billion company, which has seen its market capitalization double to $200 billion. dollars since April 2018.

In 2017, when Gopinathan took over, TCS had a calendar year revenue of $18.5 billion.

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Currently, TCS reports its business by verticals like Retail & CPG, Banking Financial Services, Communication, among others.

“Existing models have reached a level of maturity that has allowed us to free up management bandwidth in new areas of opportunity,” one of the sources said.

In response to ET’s questions about the restructuring plan, a representative for TCS said, “We cannot comment on internal corporate plans or strategies.”

Aim for a growth spurt

This is not the first time that TCS has restructured its business framework. In 2008, the company created 23 smaller units of around $250 million each, a structure that helped push growth from $6 billion in fiscal year 2008-09 to $19 billion for the 2018-19 financial year.

In 2018, the company restructured its Industrial Services Units (ISUs) to focus on long-term strategies, so a group of around 200 executives were given responsibility for 3-to-3 growth plans. 5 years.

“The success of this (latest) restructuring will depend on how quickly we bring them,” said a person with direct knowledge of the plan, adding that “the big idea is to ensure that the company, which has almost 6,00,000 people, more agile and in tune with changing customer needs,”

“The new units will be quite independent and self-sufficient. They will have domain expertise, consulting, vertical know-how, HR, finance, marketing expertise,” the person added.

Performance measurement

However, existing customer service and sales teams as well as external vertical and geographic reporting will remain unchanged.

The current customer “acquisition” unit will attract new customers, while the new “incubation” business group will welcome customers who are at an early stage of engagement with the business, typically those whose turnover is less than 20 million dollars.

Customers requiring a wider range of services will be overseen by the existing “growth” unit which includes 200 ISUs.

Finally, larger customers with long-term commitments – ideally over $100 million – will be moved to the new “processing” unit.

“This structure will help the company measure its performance in terms of the number of customers moving into each business group,” the sources said.

At the end of the December quarter, TCS had 58 customers in the $100 million+ category, 118 in the $50 million range, and 255 in the $20 million+ range.


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