“Everywhere we go overseas, Tata quite often means TCS,” Ratan Tata had said last year while launching a book written by TCS’ former CEO S. Ramadorai.

Tata’s comment underlines the importance the IT firm today occupies not only in the Tata Group but also in the Indian industry. TCS crossed the $10-billion revenue mark in 2011-12 and is now aiming to add another $10 billion in the next five years.

What-next strategy

But it was not always good for TCS. The story of TCS began in the mid-1960s when Colonel Sawhney, brother-in-law of the then Chairman of Tata Group, JRD Tata, suggested to pool the Tata group’s need for data processing in a single business unit. By 1968, the data-processing unit was formally given a name — Tata Consultancy Services. In Ratan Tata’s own words: “TCS basically was a company that put documents into punch cards and back. It had very little international exposure back then.”

It was only in the mid-1990s, after Ratan Tata took over as the Chairman, that the company undertook some transformational changes.

One of the key decisions was taken in 1996 to appoint Ramadorai as the chief executive of TCS, then only a $160-million company.

Ramadorai introduced a shift in the leadership style, one which was built around sharing of ideas.

“In these think tank sessions, I kept pushing everyone to think about what we needed to do next...I wanted to set a new vision, a goal which would rally the TCS workforce towards doing something audacious, something big,” Ramadorai says in his book The TCS Story…And Beyond.

The big idea came at a meeting in 1999 that marked the start of a strategic rethink for TCS that eventually crystallised into a bold new mission in 2003, when the company set its sight on being among the top 10 IT software and services companies in the world by 2010.

The leader

The fresh infusion of ideas and the transformation soon enough started paying dividends paving the way for the most dynamic period in TCS’ history. By 2002-03, TCS became India’s first $1-billion software company. But 90 per cent of this was coming from IT services. TCS had to expand its portfolio to achieve the 2010 target. Soon, it added five new business areas, including global consulting, infrastructure services, asset-based offerings, engineering and industrial services, and business process outsourcing.

Encouraged by its new strategy, in 2004, TCS launched its initial public offering, which received the biggest response recorded at that time. Just five years later in 2009, TCS reported revenues of $6 billion catapulting it to the top 10 IT companies’ list, one year ahead of the set target.

“We had ridden the wave of ‘establishing credibility,’ pulled up the gears to ride the wave of ‘establishing scale’ and moved confidently to face the next wave of ‘establishing leadership,’” writes Ramadorai.

Clearly, the company has taken the leadership in the Indian market ahead of giants such as Infosys and Wipro.

At a time when most IT firms are struggling to beat the slowdown in the overall market, TCS has posted consistent results for the past eight quarters.

CEO and Managing Director N. Chandrasekaran is ensuring that the company is moving ahead of the curve.

“There is no single point of arrival, where we can say everything is done. It’s a journey.

“We are much better today than yesterday,” Chandrasekaran told Business Line recently.

(This article was published on December 27, 2012)
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