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    StrategicManagement - TCS

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    Mohit Lakhotia
    Strategy Analysis of Tata Consultancy Services

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    StrategicManagement - TCS

    Uploaded by

    Mohit Lakhotia
    98 views11 pages
    Strategy Analysis of Tata Consultancy Services

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    © © All Rights Reserved

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    PPTX, PDF, TXT or read online from Scribd

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    Strategy Analysis of Tata Consultancy Services

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    98 views11 pages

    StrategicManagement - TCS

    Uploaded by

    Mohit Lakhotia
    Strategy Analysis of Tata Consultancy Services

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    Strategic Management Assignment

    Mohit Lakhotia

    2014B16

    Manu Sundara

    2014A33

    Vikram Sakhuja

    2014D35

    Chinmay Mittal

    2014C48

    Krishnaroop Dey

    2014D03

    Akshat Goel

    2014B21

    Mayank Rathi

    2014B48

    Company Profile
    NAME

    Tata Consultancy Services

    TYPE

    Public

    INDUSTRY

    IT Services, IT Consulting

    FOUNDER

    J R D TATA (Jehengir Ratanji Dadabhoy Tata) in 1968

    KEY PEOPLE

    Cyrus Mistri (Chairman)


    Natarajan Chandrashekaran (CEO & MD)

    AREAS SERVED

    Worldwide

    PARENT COMPANY

    TATA Group

    SUBSIDARIES

    CMC Limited, TCS China ,TRDDC, TCS eSERVE Ltd.

    HEADQUATER

    Mumbai, Maharashtra, India

    REVENUE

    US$ 15.5 billion (2014-15)

    OPERATING INCOME

    US$3.7 billion (2014-15)

    PROFIT

    US$3.5 billion (2014-15)

    NUMBER OF EMPLOYEES

    319,000+ (April 2015)

    As on Sept14 TCS had 230


    offices across 46 countries and
    147 delivery centers in 21
    countries.At the same date TCS
    had a total of 58 subsidiary
    companies.

    TCS offers a consulting-led,


    integrated portfolio of IT and
    IT-enabled services delivered
    through its unique Global
    Network Delivery Model
    (GNDM).

    Business Drivers of
    TCS
    REV
    ENU
    ES

    7th Qtr; 5% 8th Qtr; 3% 1st Qtr; 3%

    KEY DRIVERS

    PERFORMANCE

    Repeat Business

    More than 95% of TCS revenues


    comes from repeat business
    16 Acquisitions since 2001 and 2
    recent acquisitions
    $200 M contract from India
    Posts (Automation)
    $43 M from Norway Posts
    350 M Pound Network Rail
    Contract (IT Transformation)
    Big contracts recently
    $33 per hour ( FY 2012) on the
    lower side
    11.4% Attrition Rate, Employee
    cost as a % of Revenue is 38%
    and among the lowest among
    peers
    SG&A cost is 18.7% and is on
    the higher side among peers

    Inorganic Growth
    Bid and win new
    contracts

    6th Qtr; 8%
    5th Qtr; 11%

    98.6% repeat business

    2nd Qtr; 43%

    4th Qtr; 15%

    Billing Rates

    3rd Qtr; 12%

    REVENUE
    BREAKUP

    MAR Employee Costs


    GIN

    SG&A Expenses

    Competitive Strengths

    Focused on volume growth using cost as a leverage and has the


    largest workforce among IT service companies

    TCS has adopted a model of going into new geographies and new
    service lines. ( Risk appetite is high )

    In the year 2008 it made big acquisition to the tune of $512 million all
    by cash to buy out Citi Global Services. This helped TCS to become
    number 1 in BPO service. Recently TCS acquired CRL which would
    allow it to offer more differentiated services to its global clients

    Growth was led by markets like the UK and Europe, growth markets
    like India, Asia-Pacific, Latin America and the Middle East
    performed well

    While financial services verticals relative performance is not as


    expected, retail, manufacturing and telecom have performed well

    Strategy For Long Term


    Growth

    Customer-centricity:Seek to build, nurture and deepen customer relationships to become trusted


    strategic partners to the customers. As an industry-segmented, customer-centric organization is an
    important enabler that has ensured high levels of accountability, superior customer service and
    intimacy

    Full Services Capability:TCS has been investing in building a comprehensive, integrated portfolio
    of services to capture the entire value chain of IT, presenting a compelling value proposition for
    global enterprises making it a one-stop shop for many key clients, significantly deepening the
    relationship

    Non-linear Business Models:TCS has been building non-linear growth businesses that can enable
    revenue growth without commensurate headcount growth. Non-linearity in the existing businesses
    comes from productivity-enhancing tools, frameworks, solution accelerators and managed services
    engagements

    Global Network Delivery Model Facilitate cost arbitrage across geographies

    Strategic Acquisitions For quick growth across segments and geographies

    The Game Changer

    Global Network Delivery Model


    (GNDM)

    TCS' GNDM lets them seamlessly and uniformly deliver services to global customers from
    multiple locations across India, China, Europe, North America and Latin America
    Teams separated by time zones collaborate on projects, leveraging all of TCS' assets while subscribing
    to one global service standard
    Ituses multiple levers of time zone, language, skills and local business knowledge to deliver high
    quality business solutions seamlessly across the globe, using a globally connected workforce,
    integrated delivery processes and multi-tiered infrastructure
    This model developed by TCS is now recognized as the benchmark of excellence in software
    development
    For large clients expanding beyond their home markets, the scale and depth of GNDM capability
    makes them their preferred strategic partner

    Strategic Acquisitions

    While primarily focusing on organic growth, TCS is also open to selective strategic acquisitions in order to
    penetrate select markets, strengthen verticals and enhance service offerings
    Name

    Supervalu Services
    India

    Acquisition date

    2010 September

    Computational
    2012 August
    Research Laboratories

    Alti SA

    2013 April

    Activities
    Captive IT/BPO unit
    of Supervalu Inc. in
    India

    High Performance
    Computing

    IT Services

    Country of HQ

    India

    India

    France

    Price

    Notes

    $100 m

    TCS had a deal with


    Supervalu to have their
    Software Outsourcing to
    TCS and acquired
    Supervalu India.

    $34 m

    Acquire expertise in High


    Performance Computing
    (HPC) applications and
    Cloud services

    $97.5 m

    Access to blue-chip French


    and European clients in
    banking, luxury,
    manufacturing and
    utilities sectors

    Strategic Partners

    IBM GLOBAL SYSTEM INTEGRATOR PARTNER

    ORACLE GLOBAL SYSTEM INTEGRATOR AND GLOBAL CERTIFIED


    ADVANTAGE PARTNER

    MICROSOFT GLOBAL SYSTEM INTEGRATOR PARTNER

    SAP GLOBAL CONSULTING PARTNER

    Growth Engine Partners

    SIEBEL CONSULTING PARTNER

    WEB METHODS GLOBAL SYSTEM INTEGRATOR, PREFERRED OFFSHORE


    PARTNER

    BEA TCS is BEAS STRATEGIC PARTNER

    SUN- GSS PARTNER , SYSTEM INTEGRATOR PARTNER

    Steps taken for Transformation


    Establishing a Sense of Urgency

    Empowering others to act on the vision

    Market reality: Globalization is todays essence


    Major opportunities lies in overseas market

    TCS is aggressively pursuing companys globalization


    effort
    To that extent TCS have to keep innovation engine
    growing, grow global delivery centres, and leverage any
    talent or resource in the right way

    Forming a powerful Guiding coalition


    Strategic alliances with global leaders in technology and
    eBusiness, such as IBM, Netscape, Microsoft, SAP, Oracle
    and Compaq
    Creating a vision
    To get an extra dimension to address the global delivery
    need

    Planning for and creating short term wins


    TCS stresses on aspects like localization, ability to deliver
    the same quality on a global basis
    Consolidating improvements and still
    producing change
    People who become part of this organization too have to
    be global in nature

    Communicating the vision


    TCS is aggressively pursuing companys globalization
    effort. This vision is communicated by press releases,
    information on internet.

    Institutionalizing new approaches


    TCS want companys alliance partners to feel that they are
    dealing with the best solution providers

    What TCS can improve upon

    Large proportion of revenues from developed markets, especially the US, that are facing
    economic difficulties - volatility

    Lags peers and multinational rivals in high-end consulting offerings cannot go premium

    Heavy exposure to banking, financial services and insurance vertical plenty of dependency

    Lower outsourcing costs in neighboring South Asian markets could see contracts move away
    from TCS threat of new entrants

    There are no visible leaders beyond N Chandrasekaran leadership issue

    Lack of scale in consulting operations scalability

    Appendix

    http://en.wikipedia.org/wiki/Tata_Consultancy_Services

    http://www.tcs.com/about/corp_facts/Pages/default.aspx

    http://www.tcs.com/investors/Documents/Annual
    %20Reports/TCS_Annual_Report_2014-2015.pdf

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