Shubha Madhukar

Quietly but systematically, TSMG has built up a formidable reputation in strategy formulation and deployment, performance improvement and business analytics

It works silently, and behind the scenes. But it has been transforming the face of businesses across industries, functions and geographies. The Tata Strategic Management Group (TSMG) advises clients in the areas of strategy formulation, strategy deployment, performance improvement and business analytics.

When TSMG was founded in 1991, it operated exclusively in the strategy space and worked mostly with Tata Group companies. Today, it is spread over several industries, and has clients from all over India and around the world.

But, says TSMG chief executive Raju Bhinge, this is only a beginning. He sets out the company's vision, "Our goal for 2010 is to be the leading Indian multinational management consulting firm, with at least 10 lines of business, a presence in 10 countries and over 50 per cent of revenues from outside India."

Currently, TSMG is offering management consulting services in West Asia (Dubai, Saudi Arabia and Yemen) and South Asia (Sri Lanka and Bangladesh). This is in addition to India entry studies for clients across the globe (North America, Europe / UK and South East Asia).

A space of its own
As the only Indian-owned management consulting firm of stature, TSMG has created a niche for itself, and enjoys a unique positioning. But the journey has not been an easy one. Though the goodwill enjoyed by the Tata brand did provide the right credentials and helped the company establish its roots, the real challenge has been finding clients outside the Group.

Competitors of Tata Group companies, for example, were reluctant to work with TSMG, fearing a conflict of interest. And, considering the number of areas the 93-company Group has a presence in, this has been an enormous handicap. But TSMG did find a way out, by moving into sectors where the Group was not represented.

In the final analysis, this limitation has proved to be a blessing in disguise. TSMG put in an extra effort to carve out a foothold and prove its mettle. Of course, being an Indian company with Tata values had its advantages too. As against a McKinsey or a Deloitte, clients were happy to work with a company that delivered quality, was available through the planning and deployment stages of the project, and was affordable too.

Bobby Pauly, an engagement manager at TSMG, explains, "Indian clients soon discovered the comfort of working with a group of consultants that had a more aligned view of their culture, markets and people, and an ability to relate to them. TSMG offered actionable solutions, rather than giving them a western view of the world."

Home advantage
The other factor that went in its favour was that though it was easy to commission a McKinsey or Deloitte for a project plan, it was very, very expensive to retain their services right through implementation. With TSMG, on the other hand, each project created a kind of symbiosis; the client got a consulting company that would willingly be a partner in implementation, while TSMG gained learnings that were much richer than their western counterparts could gather.

To give its service a clear advantage, TSMG has focused on building expert teams. Pankaj Gupta, practice head for consumer and retail, elaborates, "In several cases, we add technical experts to our project teams — people who have actually been in senior positions of companies for 10 to 30 years — in automotive, retail or consumer products." This is a very strong differentiator that sets TSMG's services apart from and above those of its competitors.

One of the first projects that TSMG took up within the Group was a strategy study for the Tata Oil Mills (TOMCO), which culminated in its sale to Hindustan Lever. Next came the study for restructuring Voltas, the strategy study for Lakmé which led to the sale of the cosmetics business to Unilever, the acquisition of Little Woods — a British-owned retail chain in south India — and Trent's entry into apparel retail through Westside and Food & Grocery retail through Star Bazaar. TSMG worked on the acquisition of VSNL, its broadband entry plan and corporate data services growth strategy; it prepared the business plan for the Group's entry into consumer electronics retailing, provided JV negotiation and implementation support for the formation of Infiniti Retail. TSMG also worked on the entry plan for the Tata Sky satellite television service venture.

A world to win
Several of these experiences opened new vistas, enabling TSMG to move out of its comfortable home turf into non-Tata companies. Last fiscal, non-Tata business comprised 10 to 15 per cent of business. At present, non-Tata business is over 50 per cent and is expected to grow to 60 or 70 per cent by the end of the next fiscal.

From 2005, on the basis of capabilities developed in-house, TSMG began offering some of its services to advanced markets such as the US and the UK. It has three offerings for these markets. One is strategic analysis for understanding country selection, markets, competitors' strategy, etc. The second is financial research, which includes work on valuation, equity, fixed income, etc. Third is statistical optimisation or analytical solutions, which comprises risk modelling and predictive modelling, like fraud in telecom or risk analysis in insurance. With its new business model and internationalisation plans well on track, TSMG has expanded its core competencies and is moving into completely new areas of operation. No wonder the company is being ambitious and dreaming big.

Integration with TECS
A step in this direction was the operational integration of Tata Economic Consultancy Services (TECS) with TSMG in April 2006. TECS's expertise lies in investment advisory, infrastructure and government sectors and perfectly complements the experience TSMG has in strategy. TSMG lacked a focus in infrastructure and government practice, a gap that TECS can fill. Together, their experience could pull in a large number of infrastructure projects.

Infrastructure spends have already seen an upsurge in India and TSMG (along with TECS) has been engaged in no less than six SEZ assignments. While TSMG takes care of positioning and branding, the techno-feasibility aspects — including layout plans and the architecture of the facility — are managed by TECS.

The going is good now, but what lies ahead? Consulting is a cyclical business linked to overall economic conditions. What does it mean for the organisation's development plans? Bhinge is quietly confident, "The risks are there, but we have been able to mitigate them by offering a broad range of solutions to customers, adding new offerings in business analytics, and growing in the international space." TSMG, it appears, is ready to take centre stage.

Uploaded on April 4, 2007