The document provides information about Tata Consultancy Services (TCS), a large Indian IT services company. It discusses TCS's services including IT services, business solutions, and outsourcing. It also lists the top 10 global IT service providers and notes that TCS's rank has improved from 24 to 21. Emerging technologies discussed include user experience, data-driven decisions, and cloud computing implications. The document also covers changing customer expectations in IT outsourcing and how TCS manages customer expectations through analyzing, setting, and managing them over the life of a project.

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. About Tata Consultancy Services (TCS)
Tata Consultancy Services is an IT services, consulting and business solutions organization that
delivers 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, engineering
and 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 National
Stock Exchange and Bombay Stock Exchange in India.
o IT Services
o Business Solutions
o Outsourcing
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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.
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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.
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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 customer's 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.
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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 to
do is ask. The service provider may identify contradictory expectations from different
stakeholders and these should be prioritized and examined closely.
Set After you’ve analyzed and clarified customer’s expectations, it’s time to align them with
yours by setting expectations for the services you will provide. You need to build the right
management hierarchy, and escalation and communication schemes to reflect the client’s
management. 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 differences
and provide special training to better align teams and collaboration expectations.
All these critical steps and actions should be covered early on – during a stabilization and
collaboration phase. It’s best to take care of these requirements before the actual project
starts.
Manage When the project starts, you’ll need to manage expectations dynamically, because
they will change as the project moves from one stage to another. As you achieve results and
pass project milestones, you need to periodically check expectations and synchronize new
developments with new expected results and actions.
…And Analyze Again At some point you’ll need to analyze expectations again. You may have
several triggers that re-initiate the ANALYZE phase such as:
Organizational changes on either side of the table
Stakeholder lists may change
Completed milestones might trigger new analysis (i.e., contract re-negotiations, new service
releases, new opportunities, new product lines, etc.)
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7. Changing customer expectation in TCS
TCS’ telecom offerings and solutions help telecom companies respond better and faster to the
fast-changing business environment and growing opportunities.
Customer Relationship Management
Current Challenges: Aggressive competition for customers with many options. What TCS
provides: Solutions aimed at the most effective possible customer relationship and lifecycle
management that retain customers and keep costs down
Example: - TCS Creates Future-proof Customer Service Platform for Motorola
In today’s competitive business environment, the ability to deliver superior customer service
becomes imperative to stay ahead. Motorola’s Connected Home Business wished to upgrade its
existing customer management platform Amdocs CRM to a newer version, in order to maintain
its high standards of customer service.
Key Insight: How TCS partnered with Motorola to carry out the upgrade and helped with the
transition of the application to a future-proof customer service platform.
In today’s competitive business environment, superior customer service can act as a
differentiator. Motorola’s Connected Home Business, wished to upgrade its existing customer
management platform Amdocs CRM, to a newer version, in order to maintain its high standards
of customer service.
TCS partnered with Motorola to carry out the upgrade and transition of the application to a
new datacenter.
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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 company's 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 company's 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.
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9. Consistency is a key factor in comparing statements. Without the one set of global standards, it
will be more difficult, if not impossible, to compare with their competitors due to extra finances
and time. With an international accounting standard in place it allows companies and
competitors to be able to compare with each other.
Consistency is not only important for comparability, but also for everyone to understand
financial statements internationally. International financial reporting standards make financial
statements 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 use
the customary system (i.e. inches, feet).
Lastly, we must not forget that the markets and the economy of today are much more on a
global level and not a domestic level. With the U.S. switching over to IFRS from GAAP, it allows
our country (the United States) to become a part of that global economy.
IT companies can implement SAS 99.
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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.
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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
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12. identities and credentials must be protected as should any data that the provider collects or
produces about customer activity in the cloud.
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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.
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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 most
successful strategy was to directly approach clients and accept the lower rates that its
competitive position necessitated. Looking ahead, TCS must continue to work to reduce the
bargaining power of customers by trying to move the purchase decision away from price. This
means that TCS must deliver more than undifferentiated programming by moving up the value
chain. Such a movement is difficult in software services because the customers have deep
domain expertise and almost invariably wish to retain the tasks grouped under strategic
consulting. Moreover, customers understand that if they outsource the strategic consulting,
then their bargaining power will be reduced. TCS must develop sufficient expertise so as to
make outsourcing these tasks a compelling value proposition. Of course, it is exactly in these
realms that the multinational outsourcing firms such as IBM, Accenture, and EDS are the most
ferocious 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 this
would further focus TCS in applications’ development. On the other hand, the acquisition of a
medium-sized American firm with strong client relationships and domain skills could provide an
attractive opportunity. Although costs per employee would rise, the rise would be small since
labor requirements are lower for higher value-added work. Meanwhile, the threat of new
entrants 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 direct
competition through product differentiation, in each market segment there continue to be
numerous players.
A key concern for TCS is competition from existing players as it has generated competition for
existing business and created significant pricing pressures. Globally, firms such as EDS have
positioned themselves as capable of undertaking large, “turnkey” projects in order to
differentiate themselves from competitors such as IBM and Accenture that focus on higher
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15. value-added work such as consulting. This suggests an organically-driven growth strategy for
TCS: that TCS continue to do the same kinds of work that it currently does, but try to capture a
greater portion of the value-addition by undertaking larger projects. Though it has already
demonstrated a capability in remote project management, it would be required to further
increase this capability. However, there are some risks to this strategy. TCS’ large size suggests
that it may have already maximized economies to scale in applications development. Adding
scope, 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 the
past few years, however, engineering services, systems design, and systems integration work
have 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 and
software skills. TCS already has the software skills to move into these areas. But domain skills
are a challenge. This is illustrated by TCS’s focus on a few industries, notably banking and
financial services. This reflects a general lack of domain expertise outside the financial services
sector in India. Put differently, India does not have global-class, nontechnical knowledge in
various other industries. As a result it is difficult to offer the full panoply of services a firm
would want when it considers outsourcing a software development activity. This may be being
rectified as the liberalization of the Indian economy since 1991 has led to the development of a
host 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 staffed
primarily in India to change its revenue mix through organic growth. Acquiring Indian firms
doing higher value-added business is a possibility, but there are few such firms in the Indian
business environment. Essentially, the constraint that TCS faces is environmental rather than
firm specific. In most sectors, Indian business conditions are sufficiently dissimilar to overseas
client conditions that local domain expertise is of low relevance. The threat of substitutes in
software services does exist as technology tools to speed coding etc. However, at this time the
threat of substitutes seems rather remote.
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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 as
follows:
In summary, the answer to the question posed above is that TCS should grow in software
services through (1) Acquisition of a medium-sized American firm with strong client
relationships focusing on software-intensive areas complementary to TCS, such as system
design and systems integration in financial services; A natural direction is to move first into
areas adjacent to applications programming that require more IT-related skills and fewer
domain skills, such as system design and systems integration. There are several such firms in
the U.S. that could be attractive acquisition targets. However, managerial and cultural issues
could 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, it
should not consider overseas strategic alliances in allied domains or overseas acquisitions that
provide new industry skills. (4) Firms should further move up the value chain by accumulating
knowledge about the industry segments for which they currently develop software. (5) Firms
need to invest a great deal in hiring, training and retaining their employees, in expanding
overseas and establishing subsidiaries in countries such as the US and Western Europe, as well
as in acquiring the technological and business expertise needed. These firms will also be able to
execute large, complex projects on their own with little or no supervision from US clients and
thereby establish a point of differentiation with respect to its sector peers. (6) Established firms
should try and acquire resources from other firms and provide IT services such as, consultancy
services and technical support at low cost compared to its sector peers. Also, in time, they may
even be able to anticipate the business needs of their clients and offer them solutions. These
firms can acquire other Indian software firms (or their assets), or employ the latter as
subcontractors. TCS is one such firm that follows this approach and has a cost advantage over
other companies like Infosys, Wipro, and Cognizant etc.
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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, and
knowledge based logistics/services enterprise. TCS embeds internet based technologies into its
internal operating structures and as business solutions for customers; with customer, employee
and shareholder interests at the core of its operations; demonstrating a clear concern for ethical
conduct and good corporate citizenship; with the objective of growing into a regional and global
player, 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 that
their objective is to grow regional and globally as well. TCS and BPO sector
Unlike software services, TCS is a relatively small player in the BPO industry in India. The BPO
business is divided into broad segments: call center work (which includes a large component of
IT-intensive technical support work) and back-office work. TCS entered the business much later
than 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 use
its software business to improve its competitive position in the industry. Many of its software
clients might become BPO clients due to their familiarity with TCS and its credibility in doing
work overseas. On the other hand, the BPO business might affect TCS’ software business as
well.
These linkages are analyzed as follows: a) Retaining client relationships: BPs, unlike
softwaredevelopment, 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 for
open bidding (despite a satisfactory experience). However, it is less likely that a client will
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18. switch its BP provider, as the migration process involves high initial costs and a long migration
cycle.
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 considerable
amount of software work. For example, TCS might automate a client’s payroll system (a
software project) and then manage payroll processes as well (a BP). Thus, its BP capabilities
might allow it to earn higher value for a software project by offering to fulfill the service
outcome of the project. This is a successful model in the U.S.: large firms such as EDS offer such
integrated 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 be
possible. For example, a stock broking operation might begin by off shoring post-deal
settlement work, but then add automated trading and some of the more routine research
functions over time. Over longer periods of time, even more sophisticated work such as sales
call updates might be added. The advantage of BPO is that it lends itself to incremental
increases in the number of services provided, with small value-added slices being added to the
off 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. This
allows for the BP provider to build domain expertise that may then be leveraged to also climb
the software value chain. By contrast, a firm that only offers software services will find it
difficult to get clients to agree to add incremental work since there typically will already be
other firms fulfilling the clients’ needs in adjacent fields such as engineering services and
systems 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) skills
sets needed for BPO atthe operational level are different, requiring accountants,sales clerks,
telephone operators, and so on, rather thansoftware engineers. (2) The clients, though they
might bein the same firm, are likely to be different, especially if theclient-firm is large. Software
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19. services are normallymarketed to the firm’s CIO or CTO, while BP services aremarketed to the
firm’s operations departments, such asaccounts and HR.
b) There are also areas of synergy. The greatest for TCS is itslong-established domain expertise
in 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 from
thesame firm. Also, the BP operations can leverage off asimilar set of IT-infrastructure
management capabilities asare required for software services, such as remote
projectmanagement and network management.
c) Moving up the BP value-chain: to the extent that TCS hasthe capability of moving up the
software 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 suppliers
because its inputs are standard commodities with littlescope for differentiation. The key
challenges remain the bargaining power ofcustomers and the competitive rivalry with existing
players, 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 joint
venture and a small airline-industry related acquisition. Anoutcome of the above analysis is
that, since software operations are to beTCS’s core business for several years to come and since
moving up the value chain is a desired goal, entering BPO is advantageous because it could
assistTCS in achieving its core goals. There are several disadvantages and TCS willhave to
develop 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 that
can 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 to
simply “cherry pick” the mostdesirable businesses where there are considerable synergies
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20. between softwareand BPO. Still building the business within TCS rather than through alliancesis
the better strategy.
In the BPO realm there are similar difficulties for firms offeringundifferentiated services such as
call centers or simple claims processing.Moreover, for many firms, activities such as claims
processing, mortgageapplication screening, data entry, or GIS data entry are only the
mostroutine activities in a larger business process. Frequently, the entirebusiness process may
not be viewed as a core function, and therefore the firmsare willing to outsource more of the
higher value-added activities in thebusiness process. This willingness could permit the BPO firm
to capture alarger portion of the entire process and in the process more deeply enmesh
thecustomer in the relationship. This can serve to reduce the power of thecustomer AND
reduce the threat from rivals and new entrants.Moreover, unlike the more mature software
industry, the configuration ofmarkets and the rivals is changing constantly. For example, IBM,
which is
TCS’ ideal-typical rival (though much larger and more diversified), announcedin April 2004 that
it 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 at
this point in thematuration of the BPO industry rivalry is likely to increase as global IT
servicefirms seek to integrate BPO into their overall offerings.
In the case of BPO, substitutes are definitely a possibility. In the case ofcall centers, voice
recognition software is constantly improving and there areproducts on the markets that can
operate effectively in highly definedsituations. Though this software will surely improve, at this
time it appears asthough it will be able to substitute for only some percentage of the total
numberof calls. In the case of claims processing, mortgage scoring, etc., the use of eformsand
software-driven character recognition systems clearly will decreasethe need for routine data
entry. However, auditing, monitoring, or editingfunctions require human judgment, but can
also be done in India. So, nonhumansubstitute methods are being developed, but there are
opportunities tomove further up the value chain where judgment is required.
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21. In fact, interestingly enough, in the apparently low value-added BPOfields, movement up the
value chain may be easier than in software. Thereasons for this are the complexity of business
processes and the fact that firmsoutsourcing the process may not see the entire process as a
core competency.
This would make them willing to outsource the entire process, rather thantrying to retain the
highest value-added portions for themselves. This suggeststhat TCS should consider making a
serious commitment to the BPO field soon.
Overseas acquisitions appeared to be the most appropriate route for TCSto build its software
business. The corresponding advantage of this strategy forBPO work is that it would provide
TCS 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 first
increase itsunderstanding of the business and create a process implementation capabilityof
sufficient scale prior to acquiring value-added overseas capabilities.A domestic acquisition is an
option, its advantage being a quick start andexisting clients. However, TCS’s existing client-base
should make clientacquisition relatively easy. Further, it is likely that its established
projectmanagement skills can be leveraged for rapid ramp-up. This should amelioratethe risk of
being left behind. For these reasons, TCS should grow organicallyrather than through
acquisitions, with a focus on those domains (primarilyfinancial services, but also manufacturing
and telecommunications) in whichit already has skills that have been used in its software
services work.
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