So, what really makes a global company? The question evokes a stream of metrics to explain and label a company as truly global. For some, it is market share, number of people, financial muscle, geographical reach, an enviable roster of clients - the list is endless. The list is neither comprehensive nor can it ever be processed to convey a single defining quality of a global company. As S Ramadorai, CEO, Tata Consultancy Services (TCS) says, "I think it starts with all the points you have mentioned. You can't perceive globalisation in isolation. At the end of the day, one needs to look at the changing business environment and how the company charts its course."
What Mr Ramadorai is pointing towards is the need for a company to constantly keep its business within the context of the prevalent business environment. TCS should know this only too well. At the bleeding edge of competition, TCS has managed to maintain its leadership while growing by leaps and bounds. Adds Mr Ramadorai, "Death of distance has become a way of life, especially in our business. Increasingly, people and communities are going to be connected. If you don't build world-class professionals, you won't be a significant player." The company also has to ensure that its value proposition conveys its strategy to customers in a concise and cogent manner. Says Mr Ramadorai, "We put in effort in conveying our value proposition so that clients can relate to us and look beyond price as a sole determining factor. We ask a number of questions, like does our proposal convey the value that we can deliver, is the difference visible in our proposal etc. This is constant learning."
At one level, it is TCS's focus on its people, process and technology that has helped it build and maintain its cutting edge in an ever-changing industry. Says Mr Ramadorai, "A company needs to look at the services and products it offers and how they are related. Then, it boils down to how you manage your people, process and technology. In our business, people are the biggest differentiators; we need process maturity and technology functionality. All of these have to be scalable and robust, to maximise growth."
Though it may appear simplistic focusing on people, process and technology it is the execution of the strategy that is the most defining parameter. At TCS, it is the sheer magnitude of its operations that poses the challenge. Says Mr Ramadorai, "We face three major challenges: How do we build people in an accelerated business environment, how do we build enduring relationships with our clients and how do we create an innovation engine."
And the biggest challenge is the way in which the company will manage its growth and consolidates and harmonises its people, process and technology. Says S Padmanabhan, VP, HR, "Historically, we have been doing work in India and selling it abroad. This model worked till 1998-99. Over the past three years, we have been engineering the need to deliver locally. We have expanded and built our presence in South America and North America, and established our presence in Hungary, China, Japan and Australia. We now deliver a part of our solutions locally."
The need to deliver locally, as Mr Padmanabhan says, is a subtle but important change in the value proposition of a global IT services company. Adds Mr Padmanabhan, "Delivering locally is all the more important in markets where English is not a primary language. Now, there is a greater need for our employees to have multilingual capabilities. We have been recruiting local talent for our sales and marketing teams in those countries." Currently, TCS has close to 700 foreign nationals employed across its various centres around the world.
This change has come about because TCS customers wanted part of the deliverable close to their location. Says Mr Padmanabhan, "This is also a part of their de-risking strategy. However, the value proposition still remains focused on India, as it is the best for software delivery. We continue to do the bulk of the work in India, and a part of the work abroad, because of the de-risking strategy. This also helps us because some applications that relate to security and legal issues cant be done out of India." Also, it makes it easier for TCS to offer service support to its customers in their time zone.
The changing delivery models also mean that cultural, ethnic and gender diversity does not have any bearing on TCS strategy. Says Mr Ramadorai, "If a person has the skills and talent, he will be a leader. For us, the person's gender or nationality does not matter. Also, as distances shrink, the markets have expanded and it is up to us to invest in building skills of our people."
At TCS, this has been a little easier as the company has been focused beyond its home territory from the very beginning. Says Mr Ramadorai, "Weve always been outward looking, and not looked at Tatas as our only customers. We have always looked at the global market. The challenge has been how we constantly upgrade our people, overcome language differentiators and achieve this quickly and proactively."
As Mr Padmanabhan says, the senior management of TCS constantly reviews and scrutinises the way the company conducts its business. This is because managing non-linear growth assumes greater proportions of complexity. Says Mr Padmanabhan, "The question we are asking is what we need to do to manage 1,00,000 people. At present, we have over 25,000 employees. It is not simple to expand our policy to suit 1,00,000 people. This is the most important topic of discussion within the senior management at TCS. We gain confidence by looking at some companies who have more than 1,00,000 employees."
That would explain the reason the TCS senior management spends valuable time thinking about its people. For any IT services company, it is its human capital that provides it the cutting edge. As Mr Padmanabhan says, "Our business will be driven by two primary drivers where we get our best people and how do we attract good customers."
The same focus extends across the senior management too. Continues Mr Padmanabhan, "It is important for our senior management to keep on adding experience and expanding its skill sets." The company has drawn up a programme that helps the senior leadership hone its skills. Every person from the senior management is provided a "strength finder" book. The book helps the senior management identify areas they need to focus on for their personal development. "In our business, a person should not function in a single role for more than 18 to 24 months. Mobility is an important issue here. Since we compete with global companies, it is imperative for us to focus on understanding the customer, the culture of the countries we operate in, just as we have to ensure that our people internalise this," adds Mr Padmanabhan. TCS regularly circulates its people across various functions and within other Tata group companies. This helps employees in broadening their perspective and gaining cross industry experience.
Apart from imparting cross industry experience, TCS is also investing in building an enterprise-wide knowledge repository. The company has built and deployed a system that aids in managing its people. Named Ultimatix, this online system helps in connecting every employee for day-to-day operations requirements. It also serves as a preferred means of communication. Says Mr Ramadorai, "There are a number of ways in which we harness and expand our knowledge. We also have various fora like TQMS, Best practices sessions, social initiations, project work and mobility. We encourage people to be part of outside bodies like the IEEE, go in for certification and similar measures."
However, as Mr Padmanabhan says, "Having a technology-based solution is fine, but it is no substitute to face meetings." The company has put together a set of programmes that aids in improving its internal communication. As a conscious measure, every member of the senior management builds in time when they travel, to meet as many people as possible. "The senior management makes it a mission to meet people. We always plan out and decide who will meet whom and when. This is not bound by hierarchy or any such factors," says he.
Internal communication is also geared to de-stress the peripatetic schedules most TCS employees have to maintain. Since the average age of employees at TCS is between 27 and 28, the onus is on instituting internal communication programmes that meet the aspirations of most. Says Mr Padmanabhan, "We have a practice where every centre of TCS across the globe has a fun day once a month. We also have initiated a programme called Maitree, which is meant for spouses of our employees. Maitree goes beyond just being a programme. We have a magazine and a website devoted to this initiative."
Perhaps employee attrition is one of the first measures that indicate whether such initiatives have met their objectives. Last year, the attrition rate at TCS was around three per cent. The figure appears low, but Mr Padmanabhan readily agrees that the uncertain business conditions helped in keeping the figures low. In the first six months of the this year, the attrition levels at TCS have been 2.2 per cent and the company expects this to hover at 4-5 per cent by the close of the current business year. Says Mr Padmanabhan, "The market downturn has brought down the attrition levels, but what has also helped it stay at low levels is the fact that the company and the industry have matured and people are looking for growth with stability." Going forward, TCS expects attrition levels to settle between six to eight per cent per annum.
Attrition rates may vary with any fluctuations in business cycles. What really differentiates a company is how it is perceived vis-à-vis its competition and how it meets and exceeds customer expectation. As Mr Padmanabhan says, "Our competition is made up of global companies. These companies are based outside and within India." In the final analysis, the fundamental challenge that TCS faces is how will it deliver value without causing any disruption to its customers.
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