‘TCS will do very well in Europe'

Even though the global environment will remain “worrisome” for some time, Indian IT industry has huge opportunities with both its marketspace expanding geographically and its share in the global technology spend increasing, Mr N. Chandrasekaran, CEO and MD of TCS, told Business Line in an interview. Excerpts:

What is the global environment for the Indian IT industry after the fresh wave of gloom in Europe?

It is quite worrisome. And different parts of the world are going through different problems. I think it is going to be like this for quite some time. So all businesses — not the IT industry alone — will have to be very watchful and develop strategies to grow under the given circumstances.

Have things improved from the 2008 scenario?

There are different kinds of problems today.

Such as the crisis in Europe?

Yes, the European sovereign debt crisis is a much bigger issue today. And the unemployment issue, West Asia has different issues. Global businesses have factored in all these things. CEOs in the US, Europe, Latin America and Asia recognise that the world is going through uncertainty and a series of challenges and it's going to be like this for a while. So everybody is developing clear strategies to operate in such an environment following some basic principles across the board.

For example, everyone is extremely serious about operational excellence. How can I do more with less and be as efficient? Can I be the best in class in my industry or emulate the best, and manage the cost structures? Also, everyone is very careful about conserving cash and liquidity and any capital expenditure is scrutinised. But companies also want to grow and a lot of time is being spent on focused strategies on where and how to grow.

But, on the other side, there are businesses that are hugely successful. Take the case of all the mobile smartphones and tablets … the iPads, etc. They've done incredibly well. None of us would have predicted two years ago such a revolution of tablets.

That means there is a lot of money around…

Exactly, that's the point. People realise there is a set of things they can do… digital consumerism is an encouraging phenomenon.

So linking growth to digital consumerism, people are asking: ‘How do I offer my products and services in a cool way on the mobile anytime, anywhere.' That's a very big area.

The IT industry has a great opportunity. If somebody wants to be more efficient, it's always about changing and digitising your business process. And every company that is striving to achieve this kind of efficiency is turning to IT. Also, when anybody wants to change its business model, the technology component in that change is far more today than a few years ago, and will be even more two years down the line. So technology companies, in general, have huge opportunities.

How will the Indian IT industry benefit?

We have many more opportunities because of three aspects.

One, the overall spend on technology is increasing because people want to do new things, create new business models and use more technology.

Two, technology is changing so fast that it is difficult for corporations to do it by themselves and have to depend on technology companies. Three, till a few years ago, Indian IT companies were not able to do everything that is defined as ‘technology'. In the past, we were able to address only a limited part of the overall spend, which is over $1.5 trillion. But our capabilities have gone up and are continuing to go up. So what we address in the pie is increasing constantly, with our geographical markets expanding too.

Can you put this opportunity in context vis-a-vis TCS?

As long as we understand what is required, remain very close to customers and continue to invest in building capabilities and invent new business models, we are on the right path.

We tell our employees they have to be very passionate about both TCS and the client. At the end of the day, you have to make a difference to him. How do you bring the best of TCS, the work culture, the intellectual property of TCS to solve a GE, Citi or Target's problems?

What have been your most satisfying moments as TCS CEO, and the challenges?

We've been able to empower the company. Our biggest strength is our people. Yes, we have processes, intellectual property, a huge customer base, a brand, a track record and a global footprint.

All these are big strengths. But at the end of the day, if I am able to give the space to every one of our 2.2 lakh people (by the end of this quarter) to achieve whatever they want to achieve, that will automatically transfer into a huge impact for the company. We have to help employees to believe they have potential. That's a challenge.

How did you meet it?

By breaking TCS into 23 smaller units and sub-units, each with about 3,000-5,000 people.

So you have the advantages of a big company, along with the agility of a small one! And empower each unit to do what it thinks is right... allow it to operate, take risks, etc. This has worked phenomenally, both qualitatively and quantitatively. We see the results in the marketplace; we've delivered very well financially. More important, it has created many leaders.

What are the other challenges?

Obviously, scaling is a challenge. We are now growing in Latin America. So our share in the emerging markets, which was around 10 per cent, is now 18 per cent and will go up to 25 per cent.

Is the Europe meltdown responsible for your concentrating on Latin America and other emerging markets?

No, no! We think we'll do very well in Europe and the US. Because the companies there too will partner with us to achieve their game plan. It is a question of understanding their needs and strategic goals.

It's been satisfying on many counts — product organisation, the huge leadership bench we've created, and the impact in the market in terms of financial performance. TCS had a very strong platform; I have to leverage and strengthen it for the future.

>rasheeda@thehindu.co.in

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