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COM
THE ASIAN BUSINESS CASE CENTRE

TATA CONSULTANCY SERVICES: A

SYSTEMS APPROACH TO HUMAN HBP No. NTU022
RESOURCE DEVELOPMENT Publication No: ABCC-2008/12-004 Print copy
version: 30 Mar 2012
Wee Beng Geok & Ivy Buche

Tata Consultancy Services Ltd (TCS), India’s largest IT services provider, reached a major
milestone when manpower strength crossed the 100,000-employee mark in October 2007. Based on
a business model heavily reliant on low-wage software engineering talent, TCS tapped with great
success, India’s large pool of engineering graduates, mainly from top universities, for its human
capital needs. These software project consultants formed the backbone of the company’s service
delivery system and the lynchpin of TCS’ growth as a global IT company.

TCS used a systems approach to design a training and development framework that had enabled
the firm to scale up the human capital requirements to meet rapid business growth. By the end of
March 2008, TCS’ global employee strength was more than 111,000. Ninety percent of its IT
consultants were Indian nationals, as were majority of the TCS consultants in the USA.

However, as TCS followed its multinational clients and set up operations in China, the Chinese
government expected TCS to tap on local engineering talent as much as possible. The challenge for
TCS was whether the training framework it had used to build its India-based human resource pool
would also be effective in the Chinese context where TCS hoped to grow its second global delivery
hub after India.

Topics for discussion include: human resource development as competitive advantage; the use of
systems thinking in the design of training and development framework; strategic human resource
management and cross-cultural issues.

Associate Professor Wee Beng Geok and Ivy Buche prepared this case based on public sources. As the case is not
intended to illustrate either effective or ineffective practices or policies, the information presented reflects the authors’
interpretation of events and serves merely to provide opportunities for classroom discussions.

COPYRIGHT © 2012 Nanyang Technological University, Singapore. All rights reserved. No part of this publication may be copied,
stored, transmitted, altered, reproduced or distributed in any form or medium whatsoever without the written consent of Nanyang
Technology University.

For copies, please write toThe Asian Business Case Centre, Nanyang Business School, NanyangTechnological University, Nanyang
Avenue, Singapore 639798
Phone: +65-6790-4864/5706, Fax: +65-6791-6207, E-mail: asiacasecentre@ntu.edu.sg
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COMPANY BACKGROUND
Tata Consultancy Services (TCS), Indias’ f rst software
services company, was set up in 1968 as a division of one
of India’ s oldest, largest and most respected conglomerates
– The Tata Group. (See Appendix 1 for information on
the Tata Group).
TCS was set up to serve the Tata group’s internal
needs for management consulting, data processing and other
IT services. However, in the 1970s, it began soliciting
external business, mainly in the provision of IT application
development and maintenance services to customers in
developed markets such as the US and UK.1
A decade later, TCS was the largest software services
provider in India and continued to grow in line with
developments in global computing technologies. When
UNIX became accepted as the programming standards for
companies in the West, Indian IT service providers were on
hand to ofer cost-effective solutions for migration jobs. TCS
was at the forefront, pioneering the ‘remote project
management’ model.
By early 1990s, TCS’ IT services (including system
integration solutions, migration and re-engineering,
application development and management services, and
testing solutions) for overseas clients from India rose
sharply, relying on India’ s huge supply of low- cost skilled
engineering talent. As more multinational companies
(MNCs) jumped on the outsourcing bandwagon to improve
eff ciencies and cut costs,TCS led the pack of Indian
Business Process Outsourcing (BPO)2 service companies,
reaping the bene f ts of this move.
In the 1970s and 1980s, TCS was exporting IT talent by
sending Indian programmers to serve overseas clients for
short assignments. However, by the 1990s, advances in
telecommunications and the availability of
a large pool of low-cost and skilled technical manpower in
1 India Brand Equity Foundation. (2007, June).Tata Consultancy Services. Retrieved May 15, 2008, from http://www.ibef.org/download/
tata_consultancy_29june07.pdf
2 BPO refers to the transitioning of specif c business processes or functions to third-party providers. BPO providers offer economies of scale,
category expertise, and infrastructure that many f rms lack resources to develop. BPO that is contracted outside a company’ s own country is
sometimes called offshore outsourcing.
3 A crore (cr) is a unit in the Indian numbering system and is equal to 10 million.
4 TCS’ market capitalisation more than trebled from around US$8 billion at the IPO price to US$28 billion at the end of March 2007.
5 Tata Consultancy Services Ltd. Annual Report 2007-08, p. 60.
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India were major impetuses for the development of the IT
outsourcing industry, with India as its nexus.
As the IT outsourcing boom continued,TCS’ revenue in
2003 exceeded US$1 billion (i.e. 5,102 crore 3 rupees),
and the company consolidated its position as Asia’s
largest software and IT services company. Buoyed by
good growth prospects, in August 2004, the company
launched its IPO on the Bombay Stock Exchange.TCS
made a major impact on listing with the of fering then
billed as India’s largest IPO4.
TCS’ growth in the last four decades mirrored advances
in the f eld of computer and information technology and
the impact of these developments on global industry and
commerce. India-based software and IT service providers
were well positioned to ride these changes to service the
IT needs of global corporations centred on the intensive
development and deployment of India’s large pool of
engineering talent.
Over this time, TCS employees had progressively moved
up the competency ladder taking more complex tasks as
the f rm responded to a fast changing IT
landscape. These experiences and knowledge
accumulated resulted in the development of essential
organisational capabilities that enabled TCS to grow
from a local outsourcing service provider to a global IT
software f rm. (See Exhibit 1 – TCS Building IT
Competencies and Organisational Capabilities).
TCS’ BUSINESS AND OPERATIONS
In 2008, TCS was headquartered in Mumbai with 144 off
ces (43 off ces in US and Canada) operating in 41
countries worldwide. 5 TCS’ international client list
encompassed a broad range of industries – from banking,
f nancial services and insurance, engineering,
manufacturing, transportation, government sector ,
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retail, telecommunications to healthcare. Its clients
numbered 929 corporations 6, including 6 of the top 10
companies on the Fortune 500 list. Its services covered the
entire ITvalue chain including: ITservices; IT infrastructure
services; enterprise solutions, asset-based services,
consulting; BPO; business intelligence, and engineering
and industrial services.7
TCS’ vision was to be among the world’ s top 10 software
service companies (measured by revenue) by 2010. In 2007,
the company was ranked 1 1th by revenue and 4th by
market capitalisation in the world (IBM, HP and Accenture
occupied the top three positions with Infosys in f fth place).8
In the f nancial year (FY) ended 31 March 2008, TCS
recorded revenue of US$5.7 billion with pro f t after tax of
US$1.25 billion. 9 (See Exhibit 2A – Overview of TCS’
Financial Performance and Exhibit 2B – TCS’ Services
Mix FY2007-08.)
HUMAN RESOURCE DEVELOPMENT
COMPETITIVE ADVANTAGE
Low-Cost Talent Pool
TCS’ ability to scale up its business operations profitably
depended on a steady supply of low- cost skilled IT
personnel. These IT professionals – comprising mainly of
consultants (who created and supported the IT solutions)
and their supervisors (the project managers), were key to
the company’s ability to deliver required services to clients.
In March 2008, TCS’ employee strength was 111,407 with
90.9 percent being Indian nationals. Non-Indian nationals
made up 9.1 percent of the total workforce compared to
less than 0.5 percent in 2002 and this was expected to grow
to 15 percent within two years1.0
Eighty-seven percent of TCS employees worldwide, as at
December 2006, had engineering or other technical
education. (See Exhibit 3 – TCS’ Human Resource
Pool.) In 2008, TCS had an attrition rate of 12.6 percent
compared to India’s industry average of 15 percent.11
Since 2003, the rate of growth of non-Indian employees
in TCS increased rapidly as the company set up
operations in developing countries and began to tap on
local engineering talent for its human capital pool.
TCS as an Employer in India
TCS was the largest employer among private sector
companies in India and as a member of Tata Group,
enjoyed a reputation for having strong values, ethics and
business principles. It was widely recognised for its well-
developed training programmes for engineers. With many
international clients, there were ample opportunities for
overseas travel and numerous career prospects ranging
from technical to management positions.
AND
TCS was highly successful in recruiting engineering
talent in India, hiring more than 35,000 from
April 2007 to March 2008. 12 In
employer surveys, it often emerged as the top Indian
company of choice for engineering graduates. In 2007,
DataQuest-IDC Best IT employer survey in India rated
TCS above the industry average on all
metrics for employee satisfaction. These
included company image, company
culture, job content, salary , appraisal
system and job security.
According to the CampusT rack T-Schools survey
conducted by ACNielsen ORG-MARG, TCS ranked f
fth among recruiters at India’ s technical campuses. This
placed TCS behind Microsoft and Google, but ahead of
Oracle and IBM.13

6 Tata Consultancy Services. Operating Metrics for Financial year 2007-08. Retrieved November 18, 2008, from http://www .tcs.com/
investors/Documents/Financial%20Statements/TCS_OperatingMetrics_Q4_08.PDF
7 Tata Consultancy Services. Retrieved May 12, 2008, from http://www.tcs.com/offerings/Pages/default.aspx
8 Presentation by S. Ramadorai, CEO, Tata Consultancy Services. TCS AGM 2007.
9 Tata Consultancy Services Ltd. Annual Report, 2007-08.
10 Leahy, J. (2006, November 2). Tata unit set to double foreigners on staff. Financial Times.
11 Tata Consultancy Services. (2008, April). TCS clocks Rs22,863 cr (US$5.7 billion) in revenues in FY08; up 22 percent, PAT at
Rs 5, 026 cr (US$1.25 billion); up 19 percent [News & events: Press release].
12 In FY2007-08, TCS added 14,349 trainees and 16,893 experienced professionals in India, and 4,869 employees in its overseas sub- sidiaries and
branches.
13 ACNielsen. (2005, September 23). All about consumers [ACNielsen ORG-MARG CampusTrack T-Schools Survey]. Retrieved January
5, 2007, from http://in.nielsen.com/news20050923.shtml
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Recruiting IT Talent in India
In India, an estimated 450,000 technical graduates entered
the job market each year .14 To tap on this pool, TCS had
deep campus interaction with leading universities and
colleges. These ranged from internships, sponsorships and
scholarships, research investments, workshops, seminars,
and other informal activities. TCS representatives also
participated in academic-industry interfaces, exploring
training models for new generations of graduates to meet
the evolving needs of the global IT industry.
TCS’ offer of employment was highly valued by students
across the country. In 2006, TCS recruited from 251
institutions in India and made about 12,000 offers to
students entering their f nal academic year. In the following
year , this f gure grew to 22,451 at 272 institutions.
Campus recruitment was targeted at employing junior
consultants who were selected a year before they
completed their university studies. About 25 percent were
from computer science while 60 percent were from other
engineering disciplines.
A key feature of TCS’ recruitment programme was the focus
on company-specif c training. Once applicants passed its
stringent selection process, they were given access to TCS’
training materials during theirf nal year at the university and
were expected to spend time studying these materials.
To fulf ll its manpower needs, TCS also tapped the Indian
market for more experienced ITpersonnel. This type of
recruitment was conducted through the usual channels, such
as newspaper advertisements, Internet job-boards and
headhunters. These recruits were expected to be able to
move into project management positions within a shorter
time frame.
As India’s IT outsourcing industry took of, demand for
engineering graduates from Tier-1 cities15 increased.
To meet its growth targets, TCS broadened its search and
began hiring engineering graduates from colleges in Tier-
2 and Tier-3 cities in India. For the year ending March
2008, engineering graduates from such cities accounted
for 50 percent of its talent needs.
With intense competition for engineering talent among
the industry players, and rising human capital needs to
match soaring business growth rates, TCS turned to
India’s science and mathematics graduates. The company
launched a training programme targeted
at transforming these graduates into software
professionals. In August 2007, 500 science and
mathematics graduate recruits completed an intensive
seven-month training programme– Ignite.16 TCS planned
to hire 2,000 science graduates in 2007-08 and 4,000 in
2008-09.17
DEVELOPING IT CONSULTANTS
The mission of TCS’ Learning and DevelopmentTeam
was to enhance the competency capital ofTCS through
the co-creation of learning experiences continuously and
consistently:
The mission statement exemplifies our
conscious move away from Learning
and Development as a support
function. We are now positioned as
partners, and work closely with the
business at every level to enhance our
competency capital.18
V.Navelkar
Head of Global Continuous
Learning
Programme,TCS
TCS’ employee training and development (T&D)
programmes were well recognised and highly sought
after by Indian college graduates. The company spent
more than six percent of its revenue on talent
development annually. Over the last 30 years, the

14 Leahy, Joe. (2006, November 2). India’s IT groups start move to ‘near-sourcing’. Financial Times.
15 Industry analysts broadly def ned metro cities as being theTier-1 category cities (e.g. Mumbai, Delhi, Chennai, Kolkata, Bangalore and
Hyderabad), state capitals and urban towns endowed with suf f cient human, natural and infrastructural resources as Tier-2 cities, and other
semi-urban and rural centres as Tier-3 cities.
16 TCS brought in instructors ranging from retired scientists, teachers, professors and faculty from various universities as p art of an exchange
programme with the company. The trainees went through a continuous assessment with each trainee required to answer 1,000 questions
after every four months in real time.
17 Tata Consultancy Services (2007, August 22). Tata Consultancy Services to scale up Ignite program after successful completion of
7-month pilot. Retrieved January 31, 2008 from http://www.tcs.com
18 Simple is Beautiful. (2007, October). TCS Training and Development, 61 (10), 62-64.
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company had continually fine-tuned its training programmes

programme that will equip them for any
for developing IT talent, keeping pace with technology
kind of project.19
trends and the changing demands of a growing client list
and business environment.
Dr S.
Neethi Programme Director for Global
In 1997, TCS opened its first integrated training campus at a
ILP, TCS
cost of 5 billion rupees in the southern Indian state of
Kerala.The 58,000 sq ft campus located at the Trivandrum
The recruits received training in ‘hard’skills consisting of
technopark had 18 classrooms and 300 personal computers
a Foundation module (e.g. operating systems, data
connected to servers. By end- 2007, TCS’ Trivandrum
structures, analysis of algorithms, etc.), Software
campus was independently certif ed under IS0 9001 for
Engineering module (e.g. software development process,
various training related activities. Ten thousand recruits
systems approach to consulting, system design, etc.) and
were trained there annually and there were two major T&D
Advanced Technology module (e.g. web design basics,
streams:
scripting languages, etc.), 20 as well as ‘life’ skills such as
problem-solving and client management. The curriculum
• Induction programme – to develop software
was designed so that the trainees would be able to cope
professionals with project management competencies,
with a variety
and
of assignments that they could be expected to be working
on. The aim was to avoid any bias towards any platform,
• Continuous Learning Programme – essential skills
technology or application domain. The content was
upgrading for career development of consultants.
continuously updated and supplemented with examples
and case studies from actual
The Induction Programme
TCS projects. All training was conducted in English.
The new college recruits (calledfreshers) and the more
experienced recruits were put through an induction
After induction training and prior to being deployed to a
programme. Freshers received more technical training
project, recruits went through ‘Just-in-Time‘ training so
while the experienced hires spent more time learning
that they would be well-prepared with the most up- to-
business skills.
date technologies related to the project domain and would
be productive from day one on the job.21
Prior to a job assignment, new recruits went through a six-
week Initial Learning Programme (ILP) conducted
Another induction objective was to transform young
principally at the Trivandrum campus. The training served
recruits from all parts of India into cosmopolitan world
as a bridge between academic and professional life as a
citizens, able to conf dently take on job assignments in
junior software consultant.
any part of the world. The freshers came from diverse
social and cultural backgrounds in India, spoke different
There is a gap between what academia native languages, had their own food habits, dressed
produces and what is expected from differently and followed various religious faiths.
recruits from the professional point of Participant groups were designed to ref ect this in order to
view. We have to create a process engender greater tolerance of co-workers’attitudes and
orientation and discipline where they styles, given that they were likely to work together in
create software from an industry future projects. About 30 percent of the induction training
perspective. Also, while each project may duration was devoted to building a teamwork culture,
require different skills, they need a developing positive attitudes, improving communication
common minimum
and conf ict management skills, as well as cross-cultural
behaviours. The induction programme

19 Rodrigues, C. (2006, September 7).Grooming global managers. Retrieved April 17, 2008 from http://www.tata.com/0_our_commitment/
employee_relations/articles/20060907_grooming.htm
20 Source: Narayanan, R. & Neethi, S. (2001). Building Software Engineering Professionals: TCS Experience. Software Engineering Education
and Training, 2001 [Proceedings, 14th Conference]. IEEE Computer Society, 162-171.
21 ibid.
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also aimed at developing the business acumen of young
trainees:
TCS is fully aware how engineering-
graduate trainees are trained in terms of
approaching a particular problem. They
may not, however, have the least idea
how a stock exchange or an insurance
company functions. Hence, the accent is
on business knowledge component.22
R. Narayanan
Corporate Manager, Training and
Education, TCS
Although TCS assessed the fitness of trainees during the
induction programme through continuous assessments and
examinations, the real test was how they performed at work.
Thus, four to six months after they had started their job
assignment, the freshers
as well as their project leaders were surveyed on freshers’
conf dence and comfort level in handling their job
assignments. The combined feedback was then given to
TCS’ HR management to review the accreditation of the
institutions from which the recruits had been selected.
The Continuous Learning Programme
TCS employees were encouraged to spend at least 20 days
per year inTCS’ continuous learning programme. This
addressed technology and domain-type of training,
management and leadership development and diversity
management courses.
TCS’ ‘f rst level’ management education was based on the
Tata Business Excellence model, which focused on
managing in the TCS business environment:
E-learning: TCS invested heavily in Computer Based
Training (CBT) and about 65 percent of the companys’
skills training was conducted through this medium.
Trainers: Except for a small group of core resource
persons, instructors were drawn largely from
22 India: Business Knowledge added to Tata Consultancy Services training menu. (1999, May 3). The Hindu Business Line, India.
23 A comprehensive approach to competency development at all levels of the organisation has been a thrust area in talent manamgeent at TCS. With
the objective of becoming a role-based organisation,TCS launched the Integrated Competency and Learning Management System (iCALMS) in
2005 to create a single, digital window for learning, deliver,ycompetency management and skill assessment.This integrated system facilitated a
one-stop shop for all the learning and competency development needs of the employee.
24 Tata Consultancy Services. Corporate Sustainability Report 2006-07.
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its business operations. Typically trainers were
consultants who had returned to India after completing
assignments abroad (prior to moving to the next project).
Train-the-trainers courses were conducted periodically to
develop the instructors’ facilitation skills. Soft skill
courses were conducted by external trainers who were
internally certi f ed to teach at the TCS campus.
Competency-based training and development: In
2005, TCS implemented iCALMS23 – a repository of all
role prof les, competency requirements, and learning
programmes for the company’ s talent pool. This
provided employees with an integrated mechanism to
capture their individual skill levels and ongoing training
needs, translating them into individual learning plans,
tracking learning delivery and f nally assessing
competencies.24 Quarterly learning targets were set by the
company for each employee. (See Exhibit 4 – TCS’
Competency Development Model.)
TCS TRAINING MODEL – A SYSTEMS APPROACH
In the late 1990s, TCS devoted much ef fort and
investment towards training its workforce, with the
value-added considered from two perspectives:
contribution to the company’ s revenues and the
individual employee’s desire to upgrade and be up- to-
date.
The ILP’s primary goal was to transit new recruits from
campus to the diverse business and corporate
environments of TCS clients. With consultancy projects
across a wide range of industries and an average annual
increase of about 22,000 new employees from 2005 to
2008, the training requirements were large, varied and
dynamic, both in terms of total training hours as well as
the number and range of topics coveredT. he six-week
induction programme had to effectively map out for each
recruit the technology and organisational requirements of
each project, as well as to match their individual needs of
each recruit.
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TCS adopted a systems approach to design the T&D
model as the designers saw this approach as an effective
means to integrate and manage the dynamic requirements
of key stakeholders including management, clients,
training groups, employees, R&D, marketing, and the
wider society.
The systems approach used to develop the companys’
training model was based on cybernetics, with an emphasis
on qualitative modelling. The process to arrive at the TCS
training model was as follows:25
1. From discussions with the firm’ s stakeholders, TCS
systems designers identi f ed 16 factors and inter-
relationships with training as a central factor . The
factors ranged from customer satisfaction, business
results, competitive edge to technology trends, R&D,
individual learning, organisational learning to the art and
science of living. A systems diagram representing the
‘cybernetics of training’ was then developed.
(SeeExhibit 5A – Cybernetics of Training.)
2. Cybernetics Influence Diagrams (CIDs) 26 were
developed to make sense of the relationships between
various factors. 27 Arrows were drawn to indicate the
direction of in f uence and a causal loop diagram for
training was built link by link with participation of
stakeholders. (See Exhibit 5B – Causal Loop Diagram.)
The polarities of each loop [+ or -] ref ected what the
systems designers perceived were the relationships as
articulated at that point in time.
3. Using the Causal Loop Diagram and through analysis
and f eld observations of the feedback loops, areas for
interventions were identi f ed and the TCS Training
Model was evolved (see Exhibit 5C – TCS’ Training
Model). The model crystallized the factors and their
inter-relationships into 10 key areas/parts of TCS’
training system, which had to
be working in sync to provide the essential human
capital with the appropriate skills and suf f cient
numbers to feed the needs of the business.
Terms of Employment for IT professionals
The compensation structure was based on experience
in terms of skills, technology and domain expertise and
was at par with the industry .28 Being a results- oriented
company, TCS operated an Economic Value Added
(EVA)-based incentive programme for employees.
According to the income structure of most TCS
employees, 30 percent of the salary was variable in
nature. This variable component was paid at the
beginning of each quarter , in anticipation that the
company would achieve the pre-set EVA target.29 Despite
muted growth in the last quarter of 2007-08, TCS planned
to undertake salary hikes of 8-10 percent in the following
f scal year.30 The technology sector saw an average wage
in f ation of 15 percent per annum, mainly due to a
shortage of talent. Such level of wage inflation was a
cause of concern for TCS, which
expected to recruit 30,000 in FY2008-09.
Employee benefits included subsidised canteen
facilities and health insurance for employee and family,
among others. The company also extended the benef ts of
its ‘Adoption Leave Policy’ to male associates, which
meant that all employees were eligible for three months
paid leave, should they adopt a child.TCS also provided
other add-ons such as sabbaticals, joining spouse
overseas, part-time or work from home facility, holiday
homes and welfare trust facilitation for higher education.
For women employees, continuity of service was
considered in case they chose to quit temporarily due to
family commitments and intended to rejoin late.r
‘Bond’ system: Some Indian IT companies including
Infosys, Wipro and TCS imposed a ‘bond’ on fresh
recruits that required the employee to work for a period of
time, after he or she had completed thef rm’s training

25 Source: Narayanan, R. & Neethi, S. (2001). Building Software Engineering Professionals: TCS Experience. Software Engineering Education
and Training, 2001 [Proceedings, 14th Conference]. IEEE Computer Society, 162-171.
26 A Cybernetic Inf uence Diagram (CID) is a qualitative model of the in f uence relationships that exist between various stakeholders in a given
complex topic or situation. CID was f rst developed by Prof. P.N. Murthy at the Systems Engineering and Cybernetics Centre of TCS, which was
later renamed the Business Systems and Cybernetics Centre under Prof. Kesav Nori.
27 Unlike causal loop diagrams used in Systems Dynamics and which attempted to capture feedback information quantitatively , CIDs were
essentially qualitative descriptions of the relationships.
28 Need to address wage inf ation in sector: TCS. (2006, September 16). The Hindu Business Line, India.
29 TCS staff to lose 1.5 percent of total salary. (2008, January 31). The Hindu Business Line, India.
30 TCS to hire 35,000 this f scal. (2008, April 22). The Hindu Business Line, India.
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programme.31 As these companies hired thousands every
year and invested signif cantly in training, they stood to lose
the most as well. According to TCS, it
had “service agreements that were more like a
memorandum of understanding between the individual and
the company”.32 The bond period was restricted to two
years. However, industry experts believed that it was very
diff cult to enforce a bond. Most employees, who left before
the stipulated period, did pay up but when they resisted
paying, the recovery record was poor.33
Should the employee leave thef rm during this period, he or
she was liable to pay a certain sum to the f rm. This bond
system was largely imposed on trainees or fresh recruits
and not on senior employees and lateral hires. From the
company perspective, as it had invested signif cantly in
physical and knowledge infrastructure, programmes,
processes and systems for training new recruits, the bond
period served to ensure that companies recovered some
return on investment on the recruit’s training.
Career development: TCS offered a clearly de f ned
career growth path. This included the opportunity to work in
diverse geographies, learning new technology platforms in
dif ferent domains such as banking, telecom, life sciences
and retail. Trainees were deployed to client sites overseas to
understand the work demands and then came back toTCS’
respective development bases to serve the same clients’
global operations.34 In terms of career development, junior
consultants (freshers who had completed training and were
on their f rst jobs) who made the grade were gradually
moved into more senior roles within the company. This was
facilitated by a performance-based promotion policy.35
A policy was in place to facilitate job rotation and
movement across dif ferent job roles, functions, domains,
technologies and services. For example, employees could
rotate across roles from business development to project
manager to domain or technology specialist. They could
also move from a technical role to human resources, f
nance, training
(Learning and Development), to build their competency
repertoire and requirements, as well as to satisfy their
individual aspirations. TCS also of fered continuous
learning programmes for employees to develop their
skills through certif cates, masters or doctorates.
GLOBAL HUMAN RESOURCE MANAGEMENT
STRATEGY
Outsourcing was driven by a value proposition of cost
savings for the client, which was achieved through
inexpensive labour, the largest cost component. However,
by the 2000 decade, moreTCS clients were demanding
localised solutions. They wanted their outsourced IT
project personnel to speak the local languages of the
countries where they were based and to operate in the
same or nearby time zones. In some cases, they also
wanted to avoid the apparent cultural disconnect of
outsourcing to India.
In developed countries, the TCS outsourcing model was
cost ef fective for clients. However , as MNCs moved to
set up factories and business in emerging countries, the
cost advantage might not be substantial as wage costs
could be lower in these locations. In other cases, the entry
bar for foreign employees was raised to encourage
employment of local nationals.

Certif cation at your

doorstep

One of TCS’ retention initiatives, aimed at consultants and managers with 6 to 10 years’
experience, was to of fer opportunities for training and examinations that would lead to

31 Kandeval S. & Sabharwal S. (2011, March 4). Wipro gears up for talent war, scraps employment bonds for fresh graduates. Economic Times
Bureau, India.
32 Ties that bind. (2005, November 1). The Telegraph, Calcutta, India.
33 Raman, K. (2004, October 4). Fettered for Prof ts. The Hindu Business Line, India.
34 TCS to place trainees at client sites overseas. (2008, January 24). The Hindu Business Line, India.
35 Interview by S Padmanabhan, Executive VP and Head (global HR), TCS. (2007, February 27). Hindustan Times, India
36. Simple is Beautiful. (2007, October). TCS Training and Development, 61 (10), 62-64.
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Working visas became expensive and/or hard to obtain. In
Romania, for example, a local entry-level engineer might
cost US$9,000 to US$10,000 per year, compared with
US$6,000 to US$8,000 in India in 2006.37 However,
additional costs of working visas, expatriation and
repatriation for Indian workers abroad often tipped the
scales in favour of local workers. In China, salaries for
programmers in Beijing, Shanghai and Shenzhen were only
half the salaries for similar positions in India.38 Finally, local
language requirements often ruled out the Indian
expatriates.
Overall, Indian IT professionals continued to dominate the
global outsourcing workforce, including TCS. In November
2006, non-Indians represented about two to three percent of
the industrys’ workforce,39 according to industry body
NASSCOM.40
However, responding to the industry-wide trend of ‘near-
sourcing’, TCS set up operations closer to clients’ locations,
and to maintain the cost advantage, these operations were
based in nearby developing countries with lower labour
costs. TCS’ operations were established in Eastern Europe
(Hungary) to serve the Western European market, in
LatinAmerica (Brazil, Uruguay) to serve the local and
NorthAmerican markets, and China (Shanghai, Hangzhou)
to serve the domestic and other Asian markets. This
evolved into its ‘near market’ strategy in 2006.
In 2007, TCS set up a regional training centre at
Montevideo, Uruguay, to serve its extensive global delivery
network in Latin America. The centre would serve as a
training platform to upgrade the technology
skills of TCS employees acrossArgentina, Brazil, Chile,
Colombia, Mexico, Uruguay and other countries in the
region. The centre planned to train over 3,000 local
personnel in four years in a wide range of technologies,
methodologies, language skills and cultural sensitivity in
serving offshore clients. It was modelled closely on the
Trivandrum training framework. The goal was to
duplicate the human capital development model that had
been a major engine for its growth over the last decade.
GLOBAL NETWORK DELIVERY MODEL
To enable f exible global delivery of IT services, TCS’
strategy was to deliver value to its customers through a
Global Network Delivery Model (GNDMTM):
The GNDMTM enables our delivery
centres to collaborate on projects,
leverage all assets, work on a ‘follow-
the-sun model’ if necessary, and
through their homogeneity in terms of
quality, skills as well as look-and-feel,
give customers the same experience of
certainty, irrespective of whether they
work in Chennai, China or Chile.41
S.
Ramadorai CEO and Managing
Director, TCS
Delivery centres in this network were categorized into
three groups based on scale, breadth of skills required and
proximity to customers (see Figure 1). The aim

Figure 1
Global Network Delivery ModelTM

Source: Adapted from Tata Consultancy Services, Annual Report 2006-07, p. 51.

37 Leahy, J. (2006, November 2). India’s IT groups start move to ‘near-sourcing’. Financial Times.
38 McDougall, P. (2006, July 31). Indian outsourcers acquire a taste for Chinese fusion. InformationWeek.
39 Leahy, J. (2006, November 2). India’s IT groups start move to ‘near-sourcing’. Financial Times.
40 NASSCOM ® is the premier trade body and the chamber of commerce of the IT -ITeS industries in India. NASSCOM has more than 1,200
members, of which over 250 are global companies from US, UK, EU and APAC. NASSCOM’s member and associate member companies are
broadly in the business of software development, software services, software products, consulting services, R&D services, ITeS-BPO services, e-
commerce & web services, engineering services offshoring and animation and gaming. NASSCOM’s membership base constitutes over 95
percent of the industry revenues in India and employs over 1.6 million professionals.
41 Tata Consultancy Services. Management Discussion and Analysis. Annual Report 2006-07, p. 51.
Page 10 AsIACASE.COM
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was to “do the work where it can best be done by the right
Indian engineers. That leaves China as
people”, and provide the ideal mix of competency
an untapped talent pool.44
capability, cost and country mix for each client across the
world.42
Girija P.
Pande Asia Pacific
For TCS, GNDMTM’s multi-continent and inter- connected
Director, TCS
global development centre network (local, regional and
global) allowed for better risk management. This also
TCS had started service delivery operations in China to
lowered the total cost of ownership of the information
support GE Medical’ s software needs. This was quickly
technology by managing different service streams (such as
followed by a marketing of f ce in Beijing to support
consulting, IT services, IT infrastructure services), through a
clients in northeast and northwest China, as well as an
unif ed delivery framework.
Off-shore Development Centre in Hangzhou to provide
services to clients in theAsia-Pacif c region, in
However, TCS’ new global delivery network would require
coordination with TCS delivery centres in India. 45 By
the internationalisation of its human capital management
2008, TCS had three service delivery centres in China –
strategy and in particular , its highly scalable T&D model:
Beijing, Hangzhou and Shanghai.
We have pioneered a successful offshore
It became apparent to TCS (as well as other Indian
model in India… We are now investing in
outsourcing f rms) that China’ s domestic software
moving this expertise to all our
market, estimated to be worth US$50 billion in 2007,
international locations to complete our
offered great potential.
global delivery network.43
Furthermore, given China’s low-cost labour and large
N. Chandrasekaran
pool of engineers, China could become an ofshore IT
Executive Vice President of Global
outsourcing hub for theAsia-Pacif c region, in particular
Sales and Operations, TCS
– Japan, Korea and Taiwan. Moreover, salaries for
programmers in Beijing, Shanghai and Shenzhen were
only half the salaries for similar positions in India and
TCS CHINA OPERATIONS
there was no cost advantage in tapping on India’ s IT
talent pool.46
Among Indian companies, TCS was a pioneer in China. In
2002, TCS established a wholly-owned subsidiary in
Other issues such as working visa requirements and
Shanghai, China following multinational clients who were
processing costs, local language and culture prof ciency
setting up large scale operations there.TCS’ goal was to
requirements set by clients along with the added costs of
build the China operations into the company’s second
expatriation and repatriation of Indian IT consultants,
global delivery centre after India:
meant that TCS would have to tap on China’s low-cost
This is a business of skill and scale.
IT talent in a big way. (See Appendix 2 – Overview of
There aren’t many countries with both. In
China’s IT industry.)
Asia, you have India and China… TCS is
already employing tens of thousands of
In February 2007, with an eye on China’ s domestic
software market, TCS formally established a joint
venture (JV) with three Chinese IT companies owned by
the local governments of Beijing and Tianjin along

42 Tata Consultancy Services. Management Discussion and Analysis. Annual Report 2006-07, p. 51.
43 Bertoglia, D. (2007, February 1). Tata Consultancy Services, India’s largest technology f rm, invests in training centre to boost technol- ogy
competitiveness in Latin America. Montevideo, Uruguay.
44 Einhorn, B. (2006, March 8). India turns to the Middle Kingdom. BusinessWeek.
45 Ganapati, P. (2003, June 26). TCS has big plans for China. Retrieved 31 January 2008 from www.rediff.com/money/2003/jun/26tcs. htm
46 McDougall, P. (2006, July 31). Indian outsourcers acquire a taste for Chinese fusion. InformationWeek.
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with Microsoft as an investor. The new JV was folded in to be increased substantially . The
with TCS’ existing Chinese operation to create a single
company set a target to grow the ITworkforce strength
entity which would provide ITservices, BPO and
from 800 (in February 2007) to 6,000 by 2010/11.49
engineering to China’s domestic outsourcing market.

In the same year , TCS won substantial domestic contracts

CHINA’S IT TALENT POOL
including a US$100 million contract for Bank of China and
another multi-million dollar contract to implement a
Educational institutes were the major source of software
comprehensive international trading system for the China
engineers (see Figure 2) with 71 percent trained in
Foreign Exchange Trade
universities or research institutes in 2003.50 About
System.47
650,000 engineers graduated each year from China’s
tertiary institutions compared to 450,000 in India.51 In
We are finally able to make real inroads
December 2005, it was reported that China produced
into the banking and financial sectors in
400,000 computer science graduates a year, compared to
the domestic market in China. In banking,
181,000 IT engineering graduates in India.52
insurance and finance, we can take over
the majority of the market. So far, we
Despite this, the demand for skilled software engineers in
have been walking; now it is time for us to
China outstripped supply . China needed about 120,000
run.48
entry-level software engineers per year , whereas there
were only 60,000 available in 2002. 53 Furthermore, a 2005
Jonathan Lam, CEO, TCS (China)
report by McKinsey & Co highlighted that China’s
education system emphasised theory over practical
By then, TCS China had nearly 800 IT consultants serving
solutions, leaving fewer than 10 percent of job candidates
more than 25 clients in theAsia-Pacif c region. To achieve
suitable for work in foreign companies as engineers,
its strategic goal, TCS’ Chinese IT talent pool would have
accountants, analysts and

Figure 2
Source of Software Engineers in China

Source: CISA (2003). Annual report of China software industry 2002-2003, p. 153.

47 Aiyer, P. (2007, September 17). China joint venture, advantage Tata Consultancy Services. The Hindu, India.
48 ibid.
49 Tata to set up Asia banking technology centre here. (2006, April 24). The Business Times, Singapore.
50 Liu, X. (2004). Technology Policy, Human Resource and Chinese Software Industry. National Research Center for Science and Tech-
nology for Development. Retrieved January 29, 2008, from http://www.iipi.org/Conferences/Hawaii_SW_Conference/Liu%20Paper.pdf
51 Aiyar, P. (2007, September 17). China joint venture, advantage Tata Consultancy Services. The Hindu, India.
52 Einhorn, B. (2006, March 8). India turns to the Middle Kingdom. BusinessWeek.
53 Kharbanda, P.V. & Suman, Y. (2002, December 25). Chinese initiative in the software industry – Quest to leapC. urrent Science, 83(12).
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other careers. This overemphasis on theoretical subjects
produced graduates with limited practical experience, who
were unlikely to be immediately productive in a
commercial environment.
Responding to this, China’ s Education Ministry established
35 national pilot software colleges (each with an annual
student enrolment of 800) to produce industry-oriented
graduates.54 Cities like Shanghai and Jinan were also
actively developing software engineering curricula for
training centres and enlarging existing training institutions
to support the demand from local industries.
cooperation with Pudong Continuing Education Centre,
the education arm of the Shanghai municipal government.
In 2001, it was given permission by the Chinese
government to set up a Wholly-Owned Foreign Entity
(WOFE), enabling NIIT to become the first Indian
company to set up wholly-owned professional education
centres in China. NIITworked in partnership with local
companies, leading universities and software technology
parks, and also customized its education offerings
(available in Mandarin) to target all segments of IT
training in China. By 2006, the company had 120 centres
and planned to open 25 more in the f scal year 2007.56

Another trend, after China’s entry into the WTO, was the Attracting Software Engineering Talent in China
emergence of training centres set up by foreign software
companies of fering specialised software and IT training. In India, TCS and the Tata Group in general had been
For example, IBM had a joint training programme with consistently rated among the top employers. In China,
Shandong University (Shandong-IBM software training prior to 2002, the Tata name was largely unknown.
base); Microsoft collaborated with China’s Education
Ministry to implement a “Great Wall Plan”, while Oracle A 2007 survey 57 by ChinaHR.com, one of China’ s
and Sybase also set up similar training platforms. leading web-based headhunters, revealed that seven out
of the top 10 best employers were indigenous Chinese
Similarly, Indian IT training companies were moving into companies (see Figure 3). The survey reported that
China to tap on the potential in the manpower training space. training and development opportunities, brand impact,
India-based Aptech Ltd entered China in 2000, through a JV favourable salary and welfare packages were considered
with Beijing University –Aptech Beida Jadebird IT Co Ltd. the three most important employer criteria by university
By 2006, Aptech had over 250 centres in 57 cities in China graduates. In competing for top talent, indigenous
and had since trained over 200,000 students, adding another Chinese companies emphasised employees’ career growth
131,789 students to its rolls in 2006. 55 Not only was Aptech and building their own employer brand.58
running IT-training classes through local centres, it was also
redesigning curricula for several universities (about 50 There was also f erce competition among Indian IT
colleges). service providers for local Chinese ITtalent. Bangalore-
based Infosys Technologies Ltd, another early Indian IT
Another Indian company, NIIT Technologies launched its services pioneer in China, also had software
first training centre in Shanghai in 1998, in development centres in Shanghai and Hangzhou. In early
2006, the company employed 450 people in

54 O’Leary, C., Lawless, D., Gordon, D., Li, H. & Bechkoum, K. (2006). Developing a software Engineering Curriculum for the emerging
software industry in China. IEEE Computer Society.
55 Aptech Limited. (2007, April 24). Aptech captures 32 percent market share in China [Press release]. Retrieved February 11, 2008, from
http://www.aptech-worldwide.com/press-release_2007/24042007.htm
56 As per the International Data Corporation (IDC) report, the top f ve players of the Chinese IT education and training service market made up 51.8
percent of the market share -Aptech with 32.1 percent (retaining its No.1 position in China for the 5th consecuvtie year), NIIT with 7.6 percent,
Xinhua Computer Education with 4.6 percent, Qinghua Wanbo with 3.8 percent and Si Yuan IT Education with
3.7 percent.
57 About 50,000 graduates from 656 domestic universities took part in the survey.
58 Chinese companies are better employers. (2007, June 29). Retrieved January 29, 2008, from http://www.recruitment advertising.cn/
news/132.html
AsIACASE.COM
THE ASIAN BUSINESS CASE CENTRE
Figure 3
Best Employers for Chinese
University Students 2007
Ra Compa
nk ny
1 Lenovo China
2 China Mobile
3 Haier Group
4 Huawei Technologies Co Ltd
P&G China (Rank#5), IBM China and Microsoft
China were the three foreign-invested companies in
the top 10.
Source: ChinaHR.com
China out of 50,000 worldwide.According to James Lin,
Chief Executive of Infosys China operations, Infosys would
ramp up recruitment over the next f ve years to meet a target
of 6,000 employees in China by 2010-1.
Another Indian IT services company , Satyam Computer
Systems – a Hyderabad-based company , had operations in
Shanghai, Beijing, Dalian and Guangzhou, and was looking
to set up operations in second-tier Chinese cities such as
Chengdu, Xian and Nanjing. Raghavendra Tripathi, General
Manager of Satyam’s China operations, claimed that
moving away from the major cities would help Satyam
reduce costs by 20 percent. Satyam’ s headcount as at end-
2006 was about 400 which was expected to be ramped up to
10,000 by 2010.59
Furthermore, f nding local IT managerial talent In China
was also a challenge:
While it is easy to find code writers with
competence levels and salaries at par
with Indian equivalents, qualified middle-
level managers are in short supply. They
are, thus, more expensive and more
difficult to retain than their counterparts in
India.60
Jonathan Lam, CEO, TCS (China)
59 Einhorn, B. & Lakshman, N. (2006, November 16). Patience is virtue in China, India IT learns. BusinessWeek.
60 Aiyar, P. (2007, September 17). China Joint Venture, advantage Tata Consultancy Services. The Hindu, India
61 Ganapati, P. (2003, June 26). TCS has big plans for China. Retrieved 31 January 2008 from www.rediff.com/money/2003/jun/26tcs. htm.
62 Tata Consultany Services. (2007, February 13). TCS inaugurates new JV in China; clinches deal to set new currency system trading
system [Press release]. Retrieved March 15, 2008, from http://www.tcs.com/ics/releases/20070213.htm
63 Talgeri, K.N. (2008, February 23). United colours of TCS. Outlook Business. Retrieved December 15, 2008, from http://busines s.
outlookindia.com
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Developing IT Consultants for TCS China
By mid-2003, 74 out of about 100 employed at TCS
China-based delivery centres were locals. 61 The rest were
Indians, mostly at the managerial level. By February
2007, of the more than 800 consultants and project
managers employed by TCS, 90 percent were local
Chinese staff.62
TCS took various steps to establish a presence on
Chinese campuses as it felt that it was important to
understand “the pattern of education in a region”. 63 The
company collaborated with leading universities to carry
out joint applied R&D projects. Seminars were conducted
at many leading schools on topics such as Six Sigma,
CMMi and Open Source, which were not taught as part
of the regular curricula. The company also sponsored
students and faculty to conduct research at its R&D
centre in India.
At the local community level,TCS Chairman Ratan N.
Tata was appointed as Honorary Economic Advisor to
the government of Hangzhou, while CEO S. Ramadorai
was appointed as Honorary IT advisor to the
governments of Hangzhou and Qingdao.
To achieve TCS’ assurance and commitment to
customers of homogeneity in terms of quality , skills as
well as look-and-feel in its global service delivery, the
Chinese IT recruits were put throughTCS’ training
regime.
The first few batches of recruits were trained by
instructors from India, the curriculum closely following
the Indian ILP programmes, and with English as the
medium of instruction. However, to build and sustain a
China-based training programme, beginning with the f
fth batch of local recruits, some ILP training
was conducted by Chinese TCS consultants and project
managers who had acquired the requisite expertise and
experience. Eventually, ILP China had its own faculty
and all business-oriented classes were
Page 14
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conducted by Chinese trainers as were many of the technical
sessions. The Trivandrum team oversaw the curriculum and
tracked overall progress.64
TCS also integrated HRM systems and processes into its
global enterprise resource planning (ERP) system, drawing
employees in its locations all over the world into the global
TCS family. The aim was to make its IT talent pool aware of
the “possibilities across geographies”.65
MANAGING HUMAN RESOURCES ACROSS
BORDERS
As a knowledge-intensive business, TCS needed to tap on
and disseminate the knowledge and expertise accumulated
in its 55 local delivery centres all over the world in order to
enhance the competencies of its global human resource
pool. TCS’ policy was to send staff from diverse
geographical locations to India to work on projects for
understanding how TCS functioned.66
To feel the pulse of local sentiments, the company
periodically assessed employee-inclusiveness across its
delivery centre networks, with the aim of monitoring specif
c cross-cultural nuances or reasons that might impact on
employee satisfaction or dissatisfaction.67
Similarly, for its China operations, givenTCS’ promise to
customers of seamless service delivery , the
challenge was to manage and balance the local and
64 Rodrigues, C. (2006, September 7). Grooming global managers. RetrievedApril 17, 2008 from http://www.tata.com/0_our_commitment/
employee_relations/articles/20060907_grooming.htm
65 ibid.
66 ibid.
67 Talgeri, K.N. (2008, February 23). United colours of TCS. Outlook Business. Retrieved December 15, 2008, from http://busines s.
outlookindia.com
68 ibid.
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THE ASIAN BUSINESS CASE CENTRE
global:
We have to appreciate the traits of
each and every culture, but also
ensure that certain values of TCS are
overlaid at the top.68
N Chandrasekaran
Chief Operating Officer and Executive
Director, TCS
TCS’ GNDMTM meant that a global perspective was
critical for TCS China. For TCS talent management
initiatives to succeed in China, this meant adapting its
HR practices to local customs as well as economic and
social conditions in China, while attempting the global
integration of its Chinese IThuman capital pool.
Furthermore, although cross-cultural and cultural
diversity training was featured in TCS’ training
programmes, the challenge was to manage learning and
knowledge transfer across dif ferent cultures,
employment contexts and values, and dif ferences in job
role expectations.
Would the TCS Training Model, based on systems
thinking and developed in-house by its Engineering and
Cybernetics Centre as a tool to scale up the rising demand
for IT software professionals in India (see Exhibit 5C –
TCS’ Training Model), work as well and add value to
TCS’ IT capability building in China?
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APPENDIX 1

THE TATA GROUP

The Tata Group was one of India’s oldest, largest and most respected conglomerates. It traced its origins back to 1868
when Jamsetji Nusserwanji Tata founded a private trading f rm. In the nearly 14 decades that followed, the venture grew
and diversif ed into a variety of industries. Those industries included textiles, hotels, iron and steel, electricity, consumer
goods, aviation, chemicals, locomotive and vehicle manufacturing, watch making, software services,
telecommunications and insurance.

By 2006, the Tata Group comprised of 96 operating companies in seven business sectors: Information Systems and
Communications, Engineering, Materials, Services, Energy, Consumer Products and Chemicals.The Group companies
employed over 200,000 people. They were active in over 50 countries and exported products and services to over 120. The
Group’s consolidated 2005-2006 revenue of US$21.9 billion was equivalent to 2.8 percent of India’s gross domestic
product.

Twenty-nine of the operating companies were publicly listed with over 2.8 million shareholdersT. heir combined market
capitalisation exceeded that of any other business group in India, in either the public or private sector.

The Tata Group was controlled by eight philanthropic trusts endowed by members of the Tata family. These trusts held
approximately 66 percent of the share capital ofTata Sons, a holding company and promoter for the Group companies.
TCS was a division of Tata Sons, which controlled Tata Industries responsible for promoting the Group’s entry into new
and high-tech industries.

The Tata Group had a philosophy of aligning business practices with nation building and with the good of the Indian
people. The Group companies were known for their adherence to business ethics and their commitment to corporate social
responsibility. Business decisions were guided byf ve core values: Integrity, Understanding, Excellence, Unity and
Responsibility.
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APPENDIX 2

OVERVIEW OF CHINA’S IT INDUSTRY

By 2000, China’s IT industry had emerged as the third largest in the world. The average growth rate of the IT industry
was 31.4 percent while the national economy grew at the annual rate of 8-10 percent. At the national level, government
attention had been skewed towards the hardware sector of the ITindustry. China had become an established
manufacturing base for computers, mobile phones and information productsT. he software sector with total sales of the
software industry amounting to $20 billion yuan (US$2.42 billion) was only one- f fth the size of the hardware sector
(according to a report by China Software Industry Association).1

Many of the hardware f rms had established software arms. Another major group of software f rms originated from
enterprises involved in the systems integration of software and hardware in customized arrangements.

By 2000, China had over 10,000 software companies out of which 5,700 were software producers. Of these, only about 50
had more than 1,000 employees, the largest number being approximately 10,000, while 70 percent employed less than 50
people. Revenue grew at 20 percent per annum.2 By 2005, 8,700 software enterprises were registered with the government.
In 2007, China’s software sector generated $580 billion yuan (US$80.8 billion) in revenue, an increase of 20.8 percent
over the previous year.3 Despite achieving double digit annual growth rate, the industry remained fragmented and lacked
scale.

Furthermore, in terms of software development processes, by 2005, less than 10 software services organisations had
achieved the software engineering institute’ s capability maturity model (CMM) level 3 certi f cation for software process
maturity.

Beijing had the largest concentration of software f rms. Although Shanghai had fewer software f rms, it was China’s
premier commercial andf nancial centre with a high concentration of overseas investments and the most developed f nance
and high-tech industries. Other cities with a higher concentration of softwaref rms included Xian (a leading industrial
centre in the western part of China), Jinan (in the Shandong province), Shenzen (near Hong Kong) and Guangdong (in the
south Coastal area).

1 Kharbanda, V.P. & Suman, Y. (2002, December 25). Chinese initiative in the software industry – Quest to leap. Current Science (83, 12).
2 Software war: China guns for Indian IT. (2012, April 3). Bloomberg. Retrieved April 2, 2012, from www.expressindia.com/news/print. php?
newsid=48855
3 Software industry pro f t up 20%. (2008, February 12). China Daily. Retrieved April 2, 2012, from www .chinadaily.com.cn/bizchi- na/2008-
02/12/content_6450210.htm

TCS – BUILDING IT COMPETENCIES AND ORGANISATIONAL CAPABILITIES
Timeli
ne
First decade
1968: TCS started as Tata Computer Centre, a division of the
Tata Group. Servicing in-house data processing requirements of
the Tata Group. It started ofering Electronic Data Processing
(EDP) services to outside clients in 1969. The following year, it
secured an exclusive licence to sell and maintain mainframe
computers (manufactured by Burroughs) in India.
TCS f rst overseas software export job in 1974 was from
Burroughs to migrate a hospital information system for
Burroughs’ US client. From this TCS gained competence in
migration jobs and began moving clients’ existing systems to
IBM hardware.
1980s decade
In 1980 TCS accounted for 63 percent of Indias’ software export
services.
Indian software export services rose from US$4 million in 1980 to
US$25.3 million in 1984. New competitors emerged with 35 f rms
in India providing software services but Tata remained the leader.
During this decade TCS carried out more of fshore work for
overseas clients. By 1988, only 10 percent of this work was done
in India.
EXHIBIT 1
M
As IA C ASE . CO
Human Resource Developement – Major IT competencies and the
development of key organisationa capabilities
In a period when mainframe computers dominated, TCS focused on
commercial EDP work using programming language such as COBOL. Jobs
carried out at TCS, Mumbai, with IT programmers sent to sites of overseas
clients, when needed.
In 1979, TCS set up of f ce in New York, the f rst overseas off ce by an
Indian software service provider and by end-1970s, it emerged as the largest
software service provider in India.
With UNIX accepted as the programming standard, a shift from large
mainframes to workstations by major f rms in US and Europe – f rms looked
to Indian IT service providers, including TCS, to do migration jobs
converting installed applications into UNIX compatible programmes.
TCS pioneered the ‘remote project management’ model of dispatching Indian
programmers to sites of overseas clients for short assignments.
Page
17
 EXHIBIT 1
(CONTINUED)
TCS – BUILDING IT COMPETENCIES AND ORGANISATIONAL CAPABILITIES
Timeli
ne
1990s decade
By 1991, TCS had 2,300 employees and US$28 million revenue. With the
end of UNIX migration work, TCS focused on writing application
programmes. It also signed deals to distribute various software packages for
manufacturing and f nancial f rms in 1993.
Y2K concerns benef ted TCS and for the later part of 1990s, the company
focused on Y2K jobs.
2000s decade
2000: TCS had 15,000 staff and revenue of US$400 million, 86 percent
derived from abroad.
2004: TCS listed on Bombay Stock Exchange.
2005: TCS’ annual revenue hit US$2.24 billion with staffstrength of 45,714.
The company set up development centres in Europe, Latin America and
Japan but most employees were still based in India.
2006: Announced launch of Chinese Joint Venture.
2007: Largest private sector employer with more than 100,000 employees.
Launch of its f rst global marketing campaign ‘Experience Certainty’.
2008: TCS had 144 of f ces in 41 countries; 1 11,407 employees; annual
revenue of US$5.7 billion with US$1.25 billion in prof ts.
Source: Created by authors.
Page 18
Human Resource Developement – Major IT
competencies and the development of key
organisational capabilities
TCS invested heavily in software engineering practices and
standards, software quality assurance, project management,
software processes and allied metrics, and R&D. It was awarded
ISO 9000 certif cation and f ve TCS delivery centres were
assessed at SEI-CMM level 5.
TCS pioneered India-based of fshore development centres to
take on large turnkey projects for clients, the largest being the f
nancial services industry. Turnkey projects were largely
operated by India-based staf f with overseas expertise who
supplied industry-specif c expertise.
2003: TCS offered new services – real-time database
management, quality assurance and web services.
In 2006/07, TCS launched a new service delivery strategy of
“Global Network Delivery ModelTM”.
By 2008, its business operations included IT
M
As IA C ASE . CO
services; Enterprise solutions; IT infrastructure services; IT
consulting; BPO; Business intelligence and Engineering and
industrial services.
With rapid improvement in telecoms, competencies and
capability building focused on e-business platforms; Mobile
computing; Grid computing; Internet technology and W eb
communications; and Enterprise micro-processor developments
 AsIACASE.COM Page 19
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EXHIBIT 2A

OVERVIEW OF TCS’ FINANCIAL PERFORMANCE

Source: Compiled from TCS Annual Reports 2004-05, 2005-06, 2006-07 and Quarterly Results QIV FY2007-08 Analysts’
Presentation.

EXHIBIT 2B

TCS’ SERVICES MIX FY2007-08

Services Perce
nt
Application Development and Maintenance 46.2
Business Intelligence 9.7
Enterprise Solutions 13.7
Assurance Services 4.2
Engineering and Industrial Services 5.3
Infrastructure Services 6.7
Global Consulting 3.6
Asset Leverage Solutions 4.3
Business Process Outsourcing 6.3

This document is authorized for educator review use only by Shyamali Satpathy, IILM Graduate School of Management, Greater Noida (IILM-GSM) until Nov 2023. Copying or posting is an
infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860
 Source: Tata Consultancy Services. (2008, April 21). QIV 2007-08 Analysts’ Presentation. Retrieved May 15, 2008 from
http://www.tcs.com/investors/Documents/Presentations/TCS_Analysts_Q4_2008.PDF

This document is authorized for educator review use only by Shyamali Satpathy, IILM Graduate School of Management, Greater Noida (IILM-GSM) until Nov 2023. Copying or posting is an
infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860
 Page 20 AsIACASE.COM
THE ASIAN BUSINESS CASE CENTRE
ABCC-2008/12-004

EXHIBIT 3

TCS’ HUMAN RESOURCE POOL

i Employee Strength and Prof le

Year Number of
Associates
FY0 23,089
2
FY0 27,536
3
FY0 33,774
4
FY0 45,714
5
FY0 66,480
6
FY0 89,419
7
FY0 111,40
8 7
Sources:TCS’ EVP & Head, Global Human Resources, S. Padmanabhan (2007, May 7) Sustaining Profitable Growth
[New York Presentation] and TCS QIV FY2007-2008 Analysts’ Presentation.

ii Qualif cations of Associates

Qualifications Perce
nt
Engineering 61.6
Masters 25.1
Masters (Non-Technical) 1.0
Management Graduates 5.3
Doctorates 0.2
Chartered Accountant 0.6
Others 6.2
Source: S. Padmanabhan (2007, February 5) Talent Management [Presentation on Analysts’ Day].

ii Composition of International Workforce

Nationality Perce
nt
Chilean 14.7
Brazilian 14.3
British 11.3
Ecuadorian 10.8
American 10.4
Chinese 10.1
Uruguayan 7.0
Mexican 4.8
Hungarian 3.9

This document is authorized for educator review use only by Shyamali Satpathy, IILM Graduate School of Management, Greater Noida (IILM-GSM) until Nov 2023. Copying or posting is an
infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860
 Australian 1.1
Others 11.6
Source: Tata Consultancy Services. (2008, April 21). Quarterly Results QIV FY2007-08 [Presentation].

This document is authorized for educator review use only by Shyamali Satpathy, IILM Graduate School of Management, Greater Noida (IILM-GSM) until Nov 2023. Copying or posting is an
infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860
 AsIACASE.COM Page 21
THE ASIAN BUSINESS CASE CENTRE
ABCC-2008/12-004

EXHIBIT 4

TCS’ COMPETENCY DEVELOPMENT MODEL

Source: Dr Gargi Keeni. (2004, September). Evolution of Quality processes at Tata Consultancy Services. SEPG Japan.
Retrieved May 15, 2008, from http://www.jaspic.jp/event/2004/SepgJapan/proceedings/ISA1.pdf

EXHIBIT 5A

TCS’ CYBERNETICS OF TRAINING

Source: Narayanan, R. & Neethi, S. (2001). Building Software Engineering Professionals: TCS Experience. Software Engineering
Education and Training, 2001 [Proceedings, 14th Conference]. IEEE Computer Society, 162-171.

This document is authorized for educator review use only by Shyamali Satpathy, IILM Graduate School of Management, Greater Noida (IILM-GSM) until Nov 2023. Copying or posting is an
infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860
 Page 22 AsIACASE.COM
THE ASIAN BUSINESS CASE CENTRE
ABCC-2008/12-004

EXHIBIT 5B

TCS’ CAUSAL LOOP DIAGRAM FOR TRAINING

Source: Narayanan, R. & Neethi, S. (2001). Building Software Engineering Professionals: TCS Experience. Software Engineering
Education and Training, 2001 [Proceedings, 14th Conference]. IEEE Computer Society, 162-171.

EXHIBIT 5C

TCS’ TRAINING MODEL

Source: Narayanan, R. & Neethi, S. (2001). Building Software Engineering Professionals: TCS Experience. Software Engineering
Education and Training, 2001 [Proceedings, 14th Conference]. IEEE Computer Society, 162-171.

This document is authorized for educator review use only by Shyamali Satpathy, IILM Graduate School of Management, Greater Noida (IILM-GSM) until Nov 2023. Copying or posting is an
infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860