Professional Documents
Culture Documents
HISTORY 2
ORGANISATIONAL DEVELOPMENT 4
REALIGNMENT AND RESTRUCTURING AT TCS 5
SERVICES 7
ORGANIZATION AMBIENCE AND DÉCOR 12
VALUE CREATION MODEL FOR TCS 14
THE SYSTEM CALLED ”TCS” 19
CHALLENGES FACED BY TCS 23
STAR MODEL OF ORGANIZATION DESIGN FRAMEWORK 25
STRUCTURE 27
TCS BUSINESSES 31
Behavior and Formalization 32
COMPETENCIES 33
Advantages and disadvantages of the structure at TCS 37
CONTEXTUAL DIMENSIONS OF ORGANIZATIONAL DESIGN 39
SUGGESTED CHANGES IN ORGANIZATION DESIGN 43
HISTORY
Tata Consultancy Services Limited (TCS) is a global IT services, business solutions and
outsourcing company headquartered in Mumbai, India. It is the largest provider of
information technology in Asia and second largest business process outsourcing
services provider in India. TCS has offices in over 47 countries with more than 142
branches across the globe, with over 65 offices outside India. TCS employs more than
18,000 consultants and serves hundreds of clients, providing information technology
and business consulting services to organizations in government, business and industry
around the world. TCS accounts for India’s 20 per cent IT exports. It is a subsidiary of
textiles and manufacturing conglomerate Tata Group.
F.C KOHLI was the first general manager under whose leadership TCS pioneered its
Indian effort to create a globally recognizable brand for the Indian software industry in
1968. J.R.D TaTa was the first chairman, followed by Pankaj Roy. During its initial years
it tried building strong links with academia underlined the intellectual underpinnings of
the consulting business. Professionalism was promoted through participation in the
activities of professional societies, peer recognition and in-house training.
One of TCS' first assignments was to provide punched cards services to a sister
concern, Tata Steel (then TISCO). It later got the country's first software project, the
Inter-Branch Reconciliation System (IBRS) for the Central Bank Of India. It also provided
bureau services to Unit Trust Of India thus becoming one of the first companies to offer
BPO services.
Over the past decade, TCS has grown dramatically, doubling its revenues every two
years, and is on the verge of becoming a billion-dollar company.
1974. TCS's first international order came from Burroughs, one of the first business
computer manufacturers
In 1979, TCS delivered an electronic depository and trading system called SECOM for
SIS SegaInterSettle, Switzerland. TCS followed this up with System X for the Canadian
Depository System and also automated the Johannesburg Stock (JSE).
In 1981, TCS set up India's first software research and development centre, the Tata
Research Development and Design Center (TRDDC) in Pune. The first client-dedicated
offshore development center was set up for Compaq (then Tandem) in 1985.
In the early 1990s, the Indian IT outsourcing industry grew tremendously due to the Y2K
bug and the launch of a unified European currency, Euro. TCS pioneered the factory
model for Y2K conversion and developed software tools which automated the
conversion process and enabled third-party developers and clients to make use of it. In
1999, TCS saw outsourcing opportunity in E-Commerce and related solutions and set up
its E-Business division with ten people. By 2004, E-Business was contributing half a
billion dollars (US) to TCS.
On 9 August 2004, TCS became a publicly listed company, much later than its rivals,
Infosys, Wipro and Mahindra Satyam.
During 2005, TCS ventured into a new area for an Indian IT services company -
Bioinformatics.
In 2008, the company went through an internal restructuring exercise that executives
claim would bring about agility to the organization.
In 2011, the company entered the Small and medium enterprises (SME) market with
cloud-based offerings.
ORGANISATIONAL DEVELOPMENT
In the years 1998-99, despite the fact that TCS had emerged as the largest Indian
software company it still suffered on its operational side.
The expertise was diffused and in order to meet the needs the employees were
rotated across domains and skills. A lot of emphasis was paid to the Voice of the
Customer, in comparison to the Voice of employee
Absence of a formal system where in the knowledge could be shared for ease of
replication across projects.
By 2002, the need to align with the market, customer and business requirements was
felt at an
organizational level and hence a OD intervention was sought.
As the market decides the strategy to be adopted, structure decides the form,
technology decides capacity and synergy in output comes from the culture, an
organizational design is needed to carry all these together in a holistic manner.
Darpan
The presence or lack of communication or the lack of it became one of the biggest
hurdles in employee motivation and managerial decision-making during the aggressive
expansion strategy. In response to this Darpan, was initiated (objective to Reflect and
Improve). A Questionnaire was prepared to collect the preliminary data which included
capturing associate feedback across 5 categories :Career &Job, Communication,
Culture & Pride, Leadership: and Supervisor.
SERVICES
The business environment today is more dynamic than ever, with mergers and
acquisitions, consolidation and regulatory changes. To succeed, an enterprise needs to
develop an ability to sense these changes, and thus respond to them quickly and
smartly. TCS' Business Intelligence and Performance Management solution helps
enterprises in fulfilling the aspirations of being agile, adaptable and efficient.
With TCS SOLAR Framework, the enterprise can achieve the following:
Have the ability to easily adapt to current and new regulatory needs
As most organizations today value the merit of staying “lean and fit,” they are
increasingly looking at outsourcing non-core operations. Adopting this approach allows
them to focus on their core competencies and respond with agility to the ever-changing
market and business needs. At TCS BPO, a strong understanding of industry-specific
BPO services and cross-industry solutions is provided with new business processes and
innovative models that seamlessly align with the business requirements.
It studies the business processes and identifies how they can provide innovative
solutions that will best fit the business needs and address the challenges the
client organization may face.
Boosting your bottom line through automation, productivity arbitrage and wage
cost arbitrage
Leveraging its existing talent pool and industry experience to become part of the
client’s think tank.
Building agility across your organization through strategic initiatives that adapt to
accelerating market trends
The robust and mature processes coupled with technical and functional expertise in
several industry verticals have placed us at the forefront of providing best-in-class
services for the following industries:
Insurance
Telecom
TCS Connected Marketing Solutions aim to bridge marketing and IT, providing reality-
based innovations—delivered in partnership with our customers’ marketing organization,
leveraging global best practices and deep domain expertise, thus enabling you to
engage, measure and optimize interactions with target audiences across all the touch
points. The solutions allow for enhanced marketing velocity, an overall increase in
Return on Marketing Investment (RoMI) and enable you to tap the evolving digital
channels such as mobile and social media marketing. Our solutions include consulting
services, business solution frameworks and cloud-based platforms, all of which are
backed by strong domain and delivery expertise in areas including enterprise marketing
management, interactive marketing and marketing analytics.
CONSULTING
TCS Global Consulting delivers integrated, end-to-end IT solutions and services to help
client transform business in the right way. they leverage their unparalleled technology
expertise and deep industry knowledge to develop best-in-class, custom solutions that
make your business more efficient, agile and responsive to customer needs and market
demands.
IT SERVICES
TCS delivers excellence and certainty across all of your enterprise’s IT needs. Learn
more about the following areas:
Application Management
System Integration
Testing
Performance Engineering
Bring computing and data to your “point of need” in your enterprise business
processes
MISSION OF TCS-
The annual report 2010-11 states the mission of the company as follows-
“TCS has built a global reputation for its ability to help customers achieve their business
objectives – by providing innovative, best-in-class consulting, IT and IT-enabled
solutions and services. TCS’ core set of values underpin all activities in the Company
and these include leadership with trust, integrity, excellence, respect for the individual
and learning/sharing.The Company plans to further strengthen and consolidate its
position in the global IT industry as an integrated full services player with a global
footprint interms of innovation, operations and service delivery.”
ORGANIZATION AMBIENCE AND DÉCOR
The organization and the office decor in TCS is modern at Noida sector 3 office.
Starting from the reception to the work stations has a modern look. The paintings and
the displays with mission and vision of the company enhances the employee
relatedness with the company. The work stations have a modern look with cubicles in
which provide better utilization of space and also add to the look and feel of the place.
There are many conference rooms with stare of art facilities. Canteen area has a big
sitting area which can accommodate 100 people as there are no different timings for
lunch hours and employees of all designations can go in at same hours. Also TCS has
invited proposals from renowned caterers like Sodexho, RKHS etc.
VALUE CREATION MODEL FOR TCS
There are certain features that are unique only to TCS that help the organization in
creating value. TCS serves large and fast-growing organizations who share a common
set of objectives:
Global Network Delivery Model is the engine that allows TCS to provide reliable,
scalable and cost-effective delivery of services and solutions. This time-tested model
has helped it to achieve a client satisfaction rating of 89% for meeting quality
expectations and an average project budget variation of just 3%, both figures ranging far
higher than industry standards.
With TCS' Global Network Delivery Model™, clients can choose a sourcing strategy best
suited to your most important business considerations, e.g., cost optimization, cultural
alignment, proximity of location, language capabilities or risk mitigation.
A pioneer in software R&D, TCS has an innovative environment that offers you research-
based solutions in leading-edge technologies that will help you meet your IT
expectations and support business objectives.
Innovation Events: “Innovation Days” help key customers and TCS researchers to
collaborate on research toward specific solutions. “Innovations Forums” held annually
in the UK and USA serve as confluences of thought leaders and researchers from
academia, start-ups and customers, bringing value through shared experiences and
offering a preview of technologies and solutions of the coming decade.
Intellectual Property: TCS has created a strong IPR base and has stepped up
investments in building assets such as patents, copyrights and trademarks.
In the interest of better alignment, a need was felt to re-look at a few organizational
processes and systems, as for instance, the performance management and appraisal
system at TCS. A Teach-Train-Transfer workshop on Goal alignment was conducted,
with help from expert OD
consultants to build the context, to think through goal setting at TCS with a systems
perspective to goal alignment & to explore means of institutionalizing goal-oriented
performance management within the organization.
The workshop further introduced the concept of the Personal Score Card, and clearly
outlined what would define goals, outputs, performance management, Economic Value
adds & the ways and means for facilitating goal alignment.
The Balanced Scorecard approach was proposed, introducing corporate
goals, which touched upon the following:
Voice of the Shareholder - Financial Goals e.g. Wealth creation
Vector of Technology – Technology Goals e.g. Quality, Cost,
Delivery dimensions
Voice of the Customer – Customer/ Market Goals e.g. Customer
Satisfaction
Voice of the Employee – Learning & Development e.g. Employee
Satisfaction
Identification of talent for higher responsibility was also seen as a key focus area,
highlighting the need to have a focused Career Planning and Mentoring process. The
process of role alignment was further thought through, as well as the need for
assessment and coaching for role transitions. Towards employee satisfaction and
towards ensuring sustained availability of sufficient managerial and leadership talent,
the need to create succession plans at all levels and to track and reward high fliers was
brought out.
PROPEL-
Value card for the relationship was fallout of the analysis of tensions existing in the four
dimensions as represented by Voice of Customer, Strategy, Employee and Technology.
A tool called “Value Card” was used to analyze the problems faced by the relationship in
relation to these tensions and to arrive at workable solutions to the identified
problems,within designated timeframes.
Output(tangibles):
Increased revenue
profitability
Services-
Enterprise solutions
Assurance engineering
IT infrastructure services
BPO
Consultancy
TCS Clin-e2e
TCS Enterprise Integration and Control Environment Solution/ Energy and Utilities
Process clouds-TCS is offering solutions with relation to the cloud paradigm in the
human resource management, procurement, analytics as well as finance and
accounting.
Output(intangibles)-
Operational excellence
PROCESSES
HUMAN RESOURCE PROCESSES
INPUTS
People resources-
TCS has a workforce of around 400,30% of which is comprised by women. The average
age of a TCS employee is 28yrs and the minimum experience is close to around two
and a half years. The attrition rate as calculated by the company is less than 12% for the
year 2010.People from diverse backgrounds work in the company.
CHALLENGES FACED BY TCS
The major challenges faced by TCS are:
1. ATTRITION: Attrition rate at TCS is at all time high of 16%. Talent retention is the
major challenge faced by TCS. The competitive advantage for a service
organization is from its employees. Losing its efficient employees to its
competitors is major downfall for TCS.
3. REVENUE PRESSURE: To be the top IT Company in India, TCS has to beat the
growth of the other IT companies. This has lead TCS to focus on short term
goals, rather than pursuing long term strategy. TCS is focusing on getting the
short term project, to sustain its revenue and a lesser investment was done to
satisfy the long term objective.
The organization design is a source to the challenges TCS faces today. The mechanistic
structure at TCS has restricted employees to exhibit their creativity. Lack of autonomy
and control amongst employees has caused lead to lower levels of intrinsic motivation
on the job. This had lead to lower satisfaction levels of employees at TCS which in turn
has been leading to higher attrition levels.
The functional structure and the hierarchal structure don’t support team work. Lack of
cross functional teams at TCS also discourages generation of new ideas. TCS hasn’t
been able to focus on R&D due to the mechanistic structure, as a result TCS is still
struck with the same kind of work it has been doing. A key concern for TCS is
competition from existing players as it has generated competition for existing business
and created significant pricing pressures. Mechanistic structure has made the
organization rigid and is discouraging TCS to foray into taking up high value projects.
The structure has been preventing TCS to adapt to the changing environmental needs.
Globally, firms such as EDS have positioned themselves as capable of undertaking large,
product development projects in order to differentiate themselves from competitors
such as Cognizant and Accenture that focus on higher value-added work such as
consulting.
STAR MODEL OF ORGANIZATION DESIGN FRAMEWORK
DESIGN ELEMENTS
STRATEGY: The Company’s strategy specifies the goals and objectives to be achieved
as well as the values and missions to be pursued. It sets out the basic direction of the
company. TCS follows a cost leader strategy. The focus for TCS is to attain competitive
advantage is to reduce the per employee cost and attain economies of scale. This is the
reason TCS doesn’t lay much importance to R&D.
STRUCTURE: The structure of the organization determines the placement of power and
authority in the organization. TCS has a mechanistic structure wherein the there is a
formal structure and control is imposed on employees. Rules, procedures and a
hierarchy of authority help in getting work done in time and with minimum cost. TCS has
a matrix structure where is departments exists based on specialization. Decision
making is centralized.
PROCESSES: TCS has vertical processes. The needs of different departments are
centrally collected, and priorities are decided for the budgeting and allocation of the
resources to capital, research and development, training, and so on. Communication
tends to follow formal channels and employees are given specific job descriptions
delineating their roles and responsibilities. Coordination is maintained through the chain
of command.
Vertical processes
PEOPLE: People in star model depict the human resource policies of recruiting,
selection, rotation, training, and development. Human resource policies when in the
appropriate combination produce the talent required by the strategy and structure of the
organization, generating the skills and mind-sets necessary to implement the chosen
strategy. The employees in a service organization are the biggest source of competitive
advantage. There is continuous investment in learning, and an active sharing of
knowledge with the aim to convert learning into action.
REWARDS: The purpose of the reward system is to align the goals of the employee with
the goals of the organization. It provides motivation and incentive for the completion of
the strategic direction. The organization’s reward system defines policies regulating
salaries, promotions, bonuses, profit sharing, stock options, and so forth. Reward
structure at TCS is primarily focused on individual performances. Team rewards is not a
part of the compensation.
STRUCTURE
The organization structure adapted by TCS is mechanistic in nature. A mechanistic
organization is characterized by the following structural factors:
CENTRALIZATION VS DECENTRALIZATION:
TCS as an organization is decentralized as there are many functional groups and the
main head/corporate office does not have the entire ownership of various processes.
When it comes to different functional the process is centralized within this functional.
For example Recruitment, L&D and MATC are centralized. For process standardization,
TCS used industry standards to define the fundamental governance processes for
centralized services to be implemented across locations.
Different sectors and companies use the centralized approach. The centralized
approaches have several limitations like an enormous amount of knowledge would be
required to be able to deal effectively with user information requests that cover variety
of tasks. A centralized system constitutes:
A processing bottleneck
A single point of failure
DEPARTMENTS IN TCS:
The divisions in TCS are referred to as ISUs or Industry Solution Units. Different ISUs are
mentioned below:
Manufacturing
Hi-Tech
BFS
NGM-India
Retail
TCS BUSINESSES
Services:
IT Services
IT Infrastructure Services
Enterprise Solutions
Consulting
TCS BaNCS
Integration Mechanism:
To improve the collaboration between the Industry Solutions Units (ISUs) and
Horizontal Service Delivery Units (HSDUs) and to enhance the efficiency of sales and
delivery functions, the Contract Management System (CMS) and the Project Accounting
(PA) modules have been updated. The changes enable involvement of the HSDUs right
from the beginning that is from the contract and the WON-creation stages of an
engagement, to bring in early visibility and ownership. The HSDUs included are
Infrastructure Technology Infrastructure Services (IT IS), Business Process Outsourcing
(BPO), Engineering and Industrial Services (EIS), Assurance Services, and Global
Consulting Practice (GCP).
The behavior in the organization is standard but not very standard and there is some
room for flexibility and adjustment plays an important role in coordinating people and
activities.
People: The standard working hours for the organization is 9 hours from 9 A.M. to 6
P.M. and a proper time swipe- in and swipe- out is maintained through swipe cards. Also
officially there is no provision of flexi hours within the organization. However, in
exceptional cases some amount of flexibility is allowed by the line managers and HR so
as to accommodate the employees.
Activities: The activities carried out are very standard and has very low level of flexibility.
Some of the examples are compensation, recruitment and appraisal systems.
The degree of formalization is not very high in day to day activities and oral
communication and written communication when these communications are internal.
However, when the interactions are with client all communications are formal to a very
large extent. The rules and regulations are to be followed with certain degree of
flexibility in working hours and application of leaves.
COMPETENCIES
A core competency can take various forms, including technical/subject matter know-
how, a reliable process and/or close relationships with customers and suppliers. It may
also include product development or culture, such as employee dedication, best Human
Resource Management (HRM), good market coverage etc.
The most important competency of tcs which help it in gaining competetive advantage
is through the use of their TCS innovation labs and co-innovation network,their
collaborative r&d and innovation engine that works to successfully exploit and
commercialize new ideas,technologies and best practices. TCS Innovation Labs provide
environments in which new domain solutions can be developed, incubated, and piloted
using the latest technologies in a cost-effective environment before enterprise-wide
deployment. They give TCS customers ‘on-demand’ access to innovation and creativity
with a team comprising of domain experts, business process analysts, technology
specialists, and an R&D team.
TCS Innovation Lab, Mumbai: Focuses on speech and natural language, wireless
systems and wireless applications (BREW Centre of Excellence).
Another important competency of tcs is its Global Network Delivery Model™ which has
helped it to gain client satisfaction rating of 89%. It is the engine that allows them to
provide reliable, scalable and cost-effective delivery of services and solutions.
Global Workforce
Highly effective and scalable talent management: recruiting, staffing,
training and retention
Integrated Processes
CMMI Level 5 quality processes
World-class security procedures
Project Management processes and tools (iQMS, etc.)
Multi-Tiered Infrastructure
Multi-continental and interconnected global development center network
(local, regional, global model) to allow for better risk management and
follow-the-sun coverage
State of the art telecommunications network
Global collaboration tools
Another chief competency of tcs is its solution accelerators. Some examples of how
TCS' Solution Accelerators help clients realize tangible benefits:
TCS BaNCS is a comprehensive portfolio of solutions for the financial services
industry that provides enterprises with greater operational control, reliable
technology support, continuous process improvements and enhanced speed to
market.
TCS SOLAR Framework is a service-oriented framework that helps us strategize
and deliver Business Intelligence and Performance Management solutions.
TCS Code Generator Framework (TCS MasterCraft) provides an integrated
environment along with a product or application development life cycle. With
a significant reuse of codes, it speeds up new application development, legacy
system integration, and/or the enhancement process.
TCS is known for its human resource practices in India as well as globally. In the EU, it
continues to be the employer of choice and has the lowes tattrition rate of 9.9 per
cent.The company laysemphasis on the overall development of its employees and also
offers multi-lingual capability training modules.TCS enables its employees to meet their
career objectives through rotation across projects, functions and locations globally.It
also helps employees in building new skills and competencies, and promotes
knowledge sharingand team building.
ADVANTAGES AND DISADVANTAGES OF THE STRUCTURE AT TCS
1. The formal structure and control imposed on employees allows TCS to conform
to clients' requirements and various compliances.
2. There is immense time and margin pressure from clients. Rules, procedures and
a hierarchy of authority help in getting work done in time.
1. Mechanistic organizations are often rigid and resist change, making them
unsuitable for innovativeness and taking quick action.
3. The structure limits individual autonomy and self-determination, which will likely
lead to lower levels of intrinsic motivation on the job. This had lead to lower
satisfaction levels of employees at TCS which in turn has been leading to higher
attrition levels.
The total strength of the organization is around 214,770 while the size of the
development center at noida that we visited has a strength of around 1000, out of which
30% are females. TCS is one of the largest private sector employers in India with a core
strength 214,770 individuals.TCS has turned into the second-largest employer among
listed companies after Coal India Limited. But the biggest employer in the country is
Indian Railways with 16 lakhs employees. TCS's BPO arm had revenues of $925 million
in the year that ended in March 2011, and has 34,000 employees.TCS has one of the
lowest attrition rates in the Indian IT industry.
KEY VALUES-
Visionary Leadership
Customer-driven Excellence
Agility
Focus on the Future
Management by Fact
Social Responsibility
Systems Perspective
POLICY-
CODE OF CONDUCT
ENVIRONMENT
SUPPLIERS-
Academic Institutes are Key partners who help the organization with human
capital and technology updates.
Suppliers relationships are managed through MOU or service contract and major
the requirements are timeliness of service and cost.
INDUSTRY-
Key local competitors are – Infosys Technologies, Wipro Technologies and Satyam
Computer Services – TCS revenue is highest of all.
STRATEGY:
IT business in India is saturated with players which follow a cost leader strategy.
The increasing margin and time pressure from clients warrants that TCS shifts
its strategy from that of a cost leader to differentiator. This would help TCS to
target projects which are high on value chain.
STRUCTURE:
TCS needs to have organically driven structure which would foster collaboration
and team work. Cross functional teams are necessary to deliver products which
are above the value chain. The environment is highly uncertain, unstable or
subject to vary rapid changes in market conditions. There is a need that
personnel are empowered to make decisions and resolve problems themselves.
REWARDS:
The reward system must be congruent with the structure and processes to
influence the strategic direction. Reward systems are effective only when they
form a consistent package in combination with the other design choices. The
reward system at TCS has to change from individual to team based. Incentive for
the employees to perform as a team needs to be there for delivering superior
products.
The performance projections for measures and indicators have not been fully
evolved, the absence of these measures. This hampering the goal setting
process .
PROCESSES:
PEOPLE:
Human resource policies also build the organizational capabilities to execute the
strategic directions. The employee needs to be given autonomy and control over
their work which would help in encouraging creativity. Valuing of employees
should be institutionalized through establishing processes that enable and
enhance individual performance.
The productivity levels of people is lower than that of its competitors majors so
improving an employee’s realization would enable it to achieve its stated vision
.
REFERENCES
1. www.TCS.com
2. http://www.wikipedia.org/
3. TCS Ultimatix