Bs case study

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Bs case study

  1. 1. CASE STUDY FOR DESIGN OF STRATEGIC PLAN FOR AN IT MAJOR IN INDIA Presented by: - Mukta .S. Agarwal- PG-10-01 Sonam Kulkarni – PG-10-23 Malvika Virmani – PG-10-25 Shibani Menon – PG-10-26 Nishita Paul – PG-10-37 Alisha Sanghvi – PG-10-41
  2. 2. About Tata Consultancy Services (TCS)Tata Consultancy Services is an IT services, consulting and business solutions organization thatdelivers real results to global business, ensuring a level of certainty no other firm can match.TCS offers a consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineeringand assurance services. This is delivered through its unique Global Network Delivery Model,recognized as the benchmark of excellence in software development. A part of the Tata Group,India’s largest industrial conglomerate, TCS has a global footprint and is listed on the NationalStock Exchange and Bombay Stock Exchange in India. o IT Services o Business Solutions o Outsourcing 2
  3. 3. 1. Find out the top 10 global IT service providing companies today and TCS rank as of date According to Global Software Top 100 – Edition 2011 1. Microsoft 2. IBM 3. Oracle 4. SAP 5. Ericsson 6. HP 7. Symantec 8. Nintendo 9. Activision Blizzard 10. EMC Rank of TCS has improved from 24 to 21 RTN Asia article on TCS, Infosys, Cognizant, Wipro and HCL pulling away from the rest, improve global standing. 3
  4. 4. 2. What are the emerging technologies in IT and IS Ans: User experience and interaction. New styles of user interaction will drive new usage patterns, giving organizations opportunities to innovate how information and transactions are delivered to customers and employees. This includes devices such as media tablets and 3D flat- panel TVs and displays, and interaction styles such as gesture recognition and tangible user interfaces. Data-driven decisions: -The quantity and variety of digital data continue to explode, along with the opportunities to analyze and gain insight from new sources such as location information and social media. The techniques themselves, such as predictive analytics, are relatively well established in many cases; the value resides in applying them in new applications such as social analytics and sentiment analysis. Cloud-computing implications: - The adoption and impact of cloud computing continues to expand. In Hype Cycle for Emerging Technologies, cloud computing overall appears just topping the peak, and private cloud computing is still rising. Cloud/Web platforms are featured, along with mobile application stores, to acknowledge the growing interest in platforms for application development and delivery. Gartner Hype Cycles provide a graphic representation of the maturity and adoption of technologies and applications, and how they are potentially relevant to solving real business problems and exploiting new opportunities. Each Hype Cycle drills down into the five key phases of a technology’s life cycle. 4
  5. 5. 3. Changing customer expectations In the software development business, the typical customer is usually a company looking for an outsourcing vendor/partner. It’s not a specific individual who has expectations that need to be managed in order to succeed. The “company” is a stakeholder list with a hierarchical structure and internal corporate politics that need to be taken into account. For example, project manager expectations differ from CIO and CEO expectations. People within the company have different levels of influence that also need to be considered. Managing customer expectations is a key to aligning IT with business Understand Customer Expectations: - The organizations demonstrate a commitment to understanding the customers perspective. Most of the benchmarking partners send surveys to customers who have complained recently to see how satisfied they were with how the complaint was handled. Some call the customers to determine satisfaction. The organizations supplement surveys of people who complain with routine and often extensive data collection tools in order to understand their customers. Manage Customer Expectations: - The organizations do not wait for complaints to come in the door. They try to anticipate the needs and problems of customers and to set realistic expectations through customer education and communication strategies. Using customer feedback to understand customer expectations and needs, organizations educate their customers and/or the public on what they can expect from their products and services and what obligations and responsibilities their customers have. Customer Expectations management process in IT Outsourcing Analyze Identify your stakeholders from the customer side. List all the contacts you have and those you want to acquire in future. List all the positions, based on the customer’s organization chart, of your stakeholders and assign roles and influences. Identify your champions and those that oppose you and understand their motives. 5
  6. 6. When you begin negotiations with your new customer, it’s easy to obtain detailed information.At this stage, people are very open to expressing their expectations. The only thing you need todo is ask. The service provider may identify contradictory expectations from differentstakeholders and these should be prioritized and examined closely.Set After you’ve analyzed and clarified customer’s expectations, it’s time to align them withyours by setting expectations for the services you will provide. You need to build the rightmanagement hierarchy, and escalation and communication schemes to reflect the client’smanagement. In addition, the project manager should align the team structure and team work,prioritizing expected result areas and building the right Software Development Lifecycle (SDLC)processes. When dealing with offshore outsourcing, you’ll need to identify cultural differencesand provide special training to better align teams and collaboration expectations.All these critical steps and actions should be covered early on – during a stabilization andcollaboration phase. It’s best to take care of these requirements before the actual projectstarts.Manage When the project starts, you’ll need to manage expectations dynamically, becausethey will change as the project moves from one stage to another. As you achieve results andpass project milestones, you need to periodically check expectations and synchronize newdevelopments with new expected results and actions.…And Analyze Again At some point you’ll need to analyze expectations again. You may haveseveral triggers that re-initiate the ANALYZE phase such as:Organizational changes on either side of the tableStakeholder lists may changeCompleted milestones might trigger new analysis (i.e., contract re-negotiations, new servicereleases, new opportunities, new product lines, etc.) 6
  7. 7. Changing customer expectation in TCSTCS’ telecom offerings and solutions help telecom companies respond better and faster to thefast-changing business environment and growing opportunities.Customer Relationship ManagementCurrent Challenges: Aggressive competition for customers with many options. What TCSprovides: Solutions aimed at the most effective possible customer relationship and lifecyclemanagement that retain customers and keep costs downExample: - TCS Creates Future-proof Customer Service Platform for MotorolaIn today’s competitive business environment, the ability to deliver superior customer servicebecomes imperative to stay ahead. Motorola’s Connected Home Business wished to upgrade itsexisting customer management platform Amdocs CRM to a newer version, in order to maintainits high standards of customer service.Key Insight: How TCS partnered with Motorola to carry out the upgrade and helped with thetransition of the application to a future-proof customer service platform.In today’s competitive business environment, superior customer service can act as adifferentiator. Motorola’s Connected Home Business, wished to upgrade its existing customermanagement platform Amdocs CRM, to a newer version, in order to maintain its high standardsof customer service.TCS partnered with Motorola to carry out the upgrade and transition of the application to anew datacenter. 7
  8. 8. 4. Changing accounting norms and what kind of internal controls will IT solutions need to be compliant to Ans: Effect of accounting changes is relevant only to a companys financial statements and the reporting of its net income or net loss. When a company changes or updates the accounting principles it uses to calculate its income, this can affect the companys reported income in previous reporting periods. TCS continues to closely look at acquisitions that are strategic in nature. Through inorganic means the company may look to strengthen gaps in its services portfolio, enter new geographies or market segments as well as in-source domain and technology expertise. TCS has established a unique Global Network Delivery ModelTM (GNDMTM) that allows the Company to deliver services to customers from multiple global locations in India, China, Europe, North America and Latin America. The GNDM™ enables the Company’s delivery centers to collaborate on projects and leverage all its assets in order to ensure ‘One Global Service Standard’. Like TCS all the companies today are focusing on expanding their presence around the world and increasing their customer base. Change of the accounting standards from GAAP to IFRS was essential. The reasons for the change are as follows: GAAP and IFRS The Securities and Exchange Commission (SEC) announced it plans to switch U.S. companies from generally accepted accounting principles (GAAPs) to international financial reporting standards (IFRSs). Switching to IFRS will help companies, investors, and the public globally compare their financial statements easier. “By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier” (American). If every country has a different set of financial standards, while multinational companies exist in different countries, it is difficult to compare how each company stands because there is no consistency. 8
  9. 9. Consistency is a key factor in comparing statements. Without the one set of global standards, itwill be more difficult, if not impossible, to compare with their competitors due to extra financesand time. With an international accounting standard in place it allows companies andcompetitors to be able to compare with each other.Consistency is not only important for comparability, but also for everyone to understandfinancial statements internationally. International financial reporting standards make financialstatements easily understood.Secondly, the United States is the only country that always does things differently. For example,the United States does not use the metric system (i.e. meters, kilometers, etc.); instead we usethe customary system (i.e. inches, feet).Lastly, we must not forget that the markets and the economy of today are much more on aglobal level and not a domestic level. With the U.S. switching over to IFRS from GAAP, it allowsour country (the United States) to become a part of that global economy.IT companies can implement SAS 99. 9
  10. 10. 5. Need to offer value added management consulting solutions and package it with IT solutions Ans: Currently, IT companies are focus more on IT audits are also known as "automated data processing (ADP) audits" and "computer audits". They were formerly called "electronic data processing (EDP) audits" but management consulting will help them in analyzing their weaknesses and constraints which may lead to bottlenecks for the system and also help in understanding their capabilities and convert them into opportunity. Calculations such as finding the Human asset worth Scrap value generated: Which will tell the management the inefficiency of their processes Idle time: Non-Value added activities: Which tell the management about resources and time being wasted in activities which are not contributing to the revenue and are increasing the expenses of the company. Excess inventory in days: Lot of capital is blocked, interest is added, storing cost increases, material may even get obsolete. Debtors and creditors turnover ratios: Raw materials consumption index: Informs you about the efficiency of the processes and machines. 10
  11. 11. 6. What kind of IT computing scenario will prevail then and what security provisions need to be incorporated? Ans: The prevailing scenario would be of cloud computing. In order to ensure that data is secure (that it cannot be accessed by unauthorized users or simply lost) and that data privacy is maintained, cloud providers attend to the following areas: Data protectionTo be considered protected, data from one customer must be properly segregated from that of another; it must be stored securely when “at rest” and it must be able to move securely from one location to another. Cloud providers have systems in place to prevent data leaks or access by third parties. Proper separation of duties should ensure that auditing and/or monitoring cannot be defeated, even by privileged users at the cloud provider. Identity managementEvery enterprise will have its own identity management system to control access to information and computing resources. Cloud providers either integrate the customer’s identity management system into their own infrastructure, using federation or SSO technology, or provide an identity management solution of their own. Physical and personnel securityProviders ensure that physical machines are adequately secure and that access to these machines as well as all relevant customer data is not only restricted but that access is documented. AvailabilityCloud providers assure customers that they will have regular and predictable access to their data and applications. Application securityCloud providers ensure that applications available as a service via the cloud are secure by implementing testing and acceptance procedures for outsourced or packaged application code. It also requires application security measures (application-level firewalls) are in place in the production environment. PrivacyFinally, providers ensure that all critical data (credit card numbers, for example) are masked and that only authorized users have access to data in its entirety. Moreover, digital 11
  12. 12. identities and credentials must be protected as should any data that the provider collects orproduces about customer activity in the cloud. 12
  13. 13. 7. What kind of core and distinctive competences will be required to be built and developed in order to achieve competitive advantage and what should be the IT strategy as per Michael Porters Competitive advantage i.e. Cost Advantage , Differentiation , Niche Market? Outsourcing as means to competitive advantage Of late, IT departments have been under huge pressure to deliver more business value by accelerating the delivery of new applications and at the same time improving services levels of existing application for users. Organizations are looking seriously at outsourcing as a strategy to reduce IT costs and secondly to enable in- house IT team to focus on strategic new initiatives. There are also organizations which also have benefited by transfusion of knowledge from outsourced vendor to in-house IT team. Michael Porter’s Five Forces: -In the case of software outsourcing, for TCS there are few important suppliers, because TCS’ inputs are standard commodities and there is little opportunity for differentiation on the input side. The four forces that are most problematic are the bargaining power of customers, the threat of new entrants, the threat of substitutes, and the competitive rivalry with existing players. To examine each of these four forces in their turn for software services outsourcing. Software Services Concept, Technology determination and system architecture Engineering Services, System Specification and design Applications programming and Quality Assurance System integration in the context of competitive forces helps to explain why TCS built its business around applications programming: given the problems of distance, and operating from India, this was the easiest component of the business to build. In the early days of the software exporting business, the software vendor market was dominated by a few large global suppliers such as IBM. Indian firms were viewed as too small to matter for obtaining significant business. In addition, they competed actively with each other at the low-end. The result was that TCS and its Indian peers chose components of the business that were relatively low value-added and relatively simple to do. 13
  14. 14. TCS also faced a client market that was dominated by the large banks and insurance companies.While it actively sought alliances with larger vendors as a competitive strategy, its mostsuccessful strategy was to directly approach clients and accept the lower rates that itscompetitive position necessitated. Looking ahead, TCS must continue to work to reduce thebargaining power of customers by trying to move the purchase decision away from price. Thismeans that TCS must deliver more than undifferentiated programming by moving up the valuechain. Such a movement is difficult in software services because the customers have deepdomain expertise and almost invariably wish to retain the tasks grouped under strategicconsulting. Moreover, customers understand that if they outsource the strategic consulting,then their bargaining power will be reduced. TCS must develop sufficient expertise so as tomake outsourcing these tasks a compelling value proposition. Of course, it is exactly in theserealms that the multinational outsourcing firms such as IBM, Accenture, and EDS are the mostferocious competitors.Forging alliances is often viewed as a good strategy to offset clients’ bargaining power.However, building alliances with firms working in clients’ locations should be discounted as thiswould further focus TCS in applications’ development. On the other hand, the acquisition of amedium-sized American firm with strong client relationships and domain skills could provide anattractive opportunity. Although costs per employee would rise, the rise would be small sincelabor requirements are lower for higher value-added work. Meanwhile, the threat of newentrants is declining rapidly as the larger firms have rapidly increased their size, market share,and credibility with customers. However, although firms strive to reduce their directcompetition through product differentiation, in each market segment there continue to benumerous players.A key concern for TCS is competition from existing players as it has generated competition forexisting business and created significant pricing pressures. Globally, firms such as EDS havepositioned themselves as capable of undertaking large, “turnkey” projects in order todifferentiate themselves from competitors such as IBM and Accenture that focus on higher 14
  15. 15. value-added work such as consulting. This suggests an organically-driven growth strategy forTCS: that TCS continue to do the same kinds of work that it currently does, but try to capture agreater portion of the value-addition by undertaking larger projects. Though it has alreadydemonstrated a capability in remote project management, it would be required to furtherincrease this capability. However, there are some risks to this strategy. TCS’ large size suggeststhat it may have already maximized economies to scale in applications development. Addingscope, however, offers the potential for large gains since it necessarily involves higher value-added activities. In the early days, this was difficult, partly due to the technical difficulty in de-integrating the value-chain beyond the modularization of applications programming. Over thepast few years, however, engineering services, systems design, and systems integration workhave increasingly been outsourced (within the U.S.), suggesting that, if the skills are at hand,such work could be done in India. Most American providers of such services offer domain andsoftware skills. TCS already has the software skills to move into these areas. But domain skillsare a challenge. This is illustrated by TCS’s focus on a few industries, notably banking andfinancial services. This reflects a general lack of domain expertise outside the financial servicessector in India. Put differently, India does not have global-class, nontechnical knowledge invarious other industries. As a result it is difficult to offer the full panoply of services a firmwould want when it considers outsourcing a software development activity. This may be beingrectified as the liberalization of the Indian economy since 1991 has led to the development of ahost of new industry capabilities, such as in insurance. This promises an expansion of domain-specific skills in fields outside the traditional industries – but these will develop only gradually.These facts indicate that it will be difficult for TCS as an organization based and staffedprimarily in India to change its revenue mix through organic growth. Acquiring Indian firmsdoing higher value-added business is a possibility, but there are few such firms in the Indianbusiness environment. Essentially, the constraint that TCS faces is environmental rather thanfirm specific. In most sectors, Indian business conditions are sufficiently dissimilar to overseasclient conditions that local domain expertise is of low relevance. The threat of substitutes insoftware services does exist as technology tools to speed coding etc. However, at this time thethreat of substitutes seems rather remote. 15
  16. 16. The IT strategy as per Michael Porters Competitive advantage i.e. Cost Advantage ,Differentiation , Niche Market to be implemented by various IT firms can be described asfollows:In summary, the answer to the question posed above is that TCS should grow in softwareservices through (1) Acquisition of a medium-sized American firm with strong clientrelationships focusing on software-intensive areas complementary to TCS, such as systemdesign and systems integration in financial services; A natural direction is to move first intoareas adjacent to applications programming that require more IT-related skills and fewerdomain skills, such as system design and systems integration. There are several such firms inthe U.S. that could be attractive acquisition targets. However, managerial and cultural issuescould also play a significant role. (2) Organic growth through undertaking larger projects; (3)Adding domain capabilities in step with the development of such skills in India. However, itshould not consider overseas strategic alliances in allied domains or overseas acquisitions thatprovide new industry skills. (4) Firms should further move up the value chain by accumulatingknowledge about the industry segments for which they currently develop software. (5) Firmsneed to invest a great deal in hiring, training and retaining their employees, in expandingoverseas and establishing subsidiaries in countries such as the US and Western Europe, as wellas in acquiring the technological and business expertise needed. These firms will also be able toexecute large, complex projects on their own with little or no supervision from US clients andthereby establish a point of differentiation with respect to its sector peers. (6) Established firmsshould try and acquire resources from other firms and provide IT services such as, consultancyservices and technical support at low cost compared to its sector peers. Also, in time, they mayeven be able to anticipate the business needs of their clients and offer them solutions. Thesefirms can acquire other Indian software firms (or their assets), or employ the latter assubcontractors. TCS is one such firm that follows this approach and has a cost advantage overother companies like Infosys, Wipro, and Cognizant etc. 16
  17. 17. 8 Develop strategies and action plans for TCS to achieve their vision....Vision Statement of TCS"TCS will be recognized and respected as professional, innovative, profitable information, andknowledge based logistics/services enterprise. TCS embeds internet based technologies into itsinternal operating structures and as business solutions for customers; with customer, employeeand shareholder interests at the core of its operations; demonstrating a clear concern for ethicalconduct and good corporate citizenship; with the objective of growing into a regional and globalplayer, with emphasis on the Middle East, Europe and North America".Looking at TCS with respective to Indian market. As mentioned in its vision statement also thattheir objective is to grow regional and globally as well. TCS and BPO sectorUnlike software services, TCS is a relatively small player in the BPO industry in India. The BPObusiness is divided into broad segments: call center work (which includes a large component ofIT-intensive technical support work) and back-office work. TCS entered the business much laterthan its traditional software rivals and initially focused primarily on call-center work.Nevertheless, TCS has some advantages over others in the industry. The first is that it can useits software business to improve its competitive position in the industry. Many of its softwareclients might become BPO clients due to their familiarity with TCS and its credibility in doingwork overseas. On the other hand, the BPO business might affect TCS’ software business aswell.These linkages are analyzed as follows: a) Retaining client relationships: BPs, unlikesoftwaredevelopment, is transaction-oriented rather than project oriented.Once a software project is completed, it is common for the client to put the next project up foropen bidding (despite a satisfactory experience). However, it is less likely that a client will 17
  18. 18. switch its BP provider, as the migration process involves high initial costs and a long migrationcycle.Hence, the software division may retain clients better if the firm also provides BP services.b) Obtaining work linking software and BP: Some BPs, but not all, involves a considerableamount of software work. For example, TCS might automate a client’s payroll system (asoftware project) and then manage payroll processes as well (a BP). Thus, its BP capabilitiesmight allow it to earn higher value for a software project by offering to fulfill the serviceoutcome of the project. This is a successful model in the U.S.: large firms such as EDS offer suchintegrated services.c) Building domain expertise: Although TCS and other Indian firms currently do low-end, back-office work, over time more high-end work and even transitioning to front-office work might bepossible. For example, a stock broking operation might begin by off shoring post-dealsettlement work, but then add automated trading and some of the more routine researchfunctions over time. Over longer periods of time, even more sophisticated work such as salescall updates might be added. The advantage of BPO is that it lends itself to incrementalincreases in the number of services provided, with small value-added slices being added to theoff shored work as the offshore operation gains in capability. This reflects the nature of BPs,that they will typically either be provided by a single outsourced provider or done in-house. Thisallows for the BP provider to build domain expertise that may then be leveraged to also climbthe software value chain. By contrast, a firm that only offers software services will find itdifficult to get clients to agree to add incremental work since there typically will already beother firms fulfilling the clients’ needs in adjacent fields such as engineering services andsystems integration.How will the BPO business be affected by the software business?a) There are key operational areas in which the impact ofsoftware work on BP is low: (1) skillssets needed for BPO atthe operational level are different, requiring accountants,sales clerks,telephone operators, and so on, rather thansoftware engineers. (2) The clients, though theymight bein the same firm, are likely to be different, especially if theclient-firm is large. Software 18
  19. 19. services are normallymarketed to the firm’s CIO or CTO, while BP services aremarketed to thefirm’s operations departments, such asaccounts and HR.b) There are also areas of synergy. The greatest for TCS is itslong-established domain expertisein financial services thatcould help the firm obtains BPO work in the financialservices industry.Further, TCS’s credibility in softwareservices should assist in securing BPO business fromthesame firm. Also, the BP operations can leverage off asimilar set of IT-infrastructuremanagement capabilities asare required for software services, such as remoteprojectmanagement and network management.c) Moving up the BP value-chain: to the extent that TCS hasthe capability of moving up thesoftware value-chain, thismay assist in migrating up the BP value-chain.Should TCS enter BPO and, if so, how:-As noted for software outsourcing, TCS is not affected by the competitiveposition of suppliersbecause its inputs are standard commodities with littlescope for differentiation. The keychallenges remain the bargaining power ofcustomers and the competitive rivalry with existingplayers, although the threatof new entrants and substitutes is not negligible.As noted in the case, TCS has hitherto made a few small investments inBPO, one as a jointventure and a small airline-industry related acquisition. Anoutcome of the above analysis isthat, since software operations are to beTCS’s core business for several years to come and sincemoving up the value chain is a desired goal, entering BPO is advantageous because it couldassistTCS in achieving its core goals. There are several disadvantages and TCS willhave todevelop personnel and marketing teams that are appropriate for BPO.It seems important for TCS to enter the BPO field. Ideally, TCS should builda BPO business thatcan leverage off the software business, such as managingback-office processes in finance,rather than in less-linked businesses such ascall-centers. However, it may be impossible tosimply “cherry pick” the mostdesirable businesses where there are considerable synergies 19
  20. 20. between softwareand BPO. Still building the business within TCS rather than through alliancesisthe better strategy.In the BPO realm there are similar difficulties for firms offeringundifferentiated services such ascall centers or simple claims processing.Moreover, for many firms, activities such as claimsprocessing, mortgageapplication screening, data entry, or GIS data entry are only themostroutine activities in a larger business process. Frequently, the entirebusiness process maynot be viewed as a core function, and therefore the firmsare willing to outsource more of thehigher value-added activities in thebusiness process. This willingness could permit the BPO firmto capture alarger portion of the entire process and in the process more deeply enmeshthecustomer in the relationship. This can serve to reduce the power of thecustomer ANDreduce the threat from rivals and new entrants.Moreover, unlike the more mature softwareindustry, the configuration ofmarkets and the rivals is changing constantly. For example, IBM,which isTCS’ ideal-typical rival (though much larger and more diversified), announcedin April 2004 thatit was purchasing one of the premier independent IndianBPO firms, Daksh, for approximately$150 million. The implication is thatIBM will be a “new entrant” in the BPO business. Thus atthis point in thematuration of the BPO industry rivalry is likely to increase as global ITservicefirms seek to integrate BPO into their overall offerings.In the case of BPO, substitutes are definitely a possibility. In the case ofcall centers, voicerecognition software is constantly improving and there areproducts on the markets that canoperate effectively in highly definedsituations. Though this software will surely improve, at thistime it appears asthough it will be able to substitute for only some percentage of the totalnumberof calls. In the case of claims processing, mortgage scoring, etc., the use of eformsandsoftware-driven character recognition systems clearly will decreasethe need for routine dataentry. However, auditing, monitoring, or editingfunctions require human judgment, but canalso be done in India. So, nonhumansubstitute methods are being developed, but there areopportunities tomove further up the value chain where judgment is required. 20
  21. 21. In fact, interestingly enough, in the apparently low value-added BPOfields, movement up thevalue chain may be easier than in software. Thereasons for this are the complexity of businessprocesses and the fact that firmsoutsourcing the process may not see the entire process as acore competency.This would make them willing to outsource the entire process, rather thantrying to retain thehighest value-added portions for themselves. This suggeststhat TCS should consider making aserious commitment to the BPO field soon.Overseas acquisitions appeared to be the most appropriate route for TCSto build its softwarebusiness. The corresponding advantage of this strategy forBPO work is that it would provideTCS with a base of clients. It might allowa more rapid ramp-up to doing higher-end work.However, unlike software, amore cautious approach seems to be in order. TCS needs to firstincrease itsunderstanding of the business and create a process implementation capabilityofsufficient scale prior to acquiring value-added overseas capabilities.A domestic acquisition is anoption, its advantage being a quick start andexisting clients. However, TCS’s existing client-baseshould make clientacquisition relatively easy. Further, it is likely that its establishedprojectmanagement skills can be leveraged for rapid ramp-up. This should amelioratethe risk ofbeing left behind. For these reasons, TCS should grow organicallyrather than throughacquisitions, with a focus on those domains (primarilyfinancial services, but also manufacturingand telecommunications) in whichit already has skills that have been used in its softwareservices work. 21

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