S. Mahalingam spends a major part of his working hours thinking up ways to maximise the returns from the human capital that is the greatest resource at Tata Consultancy Services. It helps that the executive vice president of India’s standout software and services enterprise has a lifetime of experience to draw upon.

More than three decades of working with TCS have given Mr Mahalingam a ringside view of India’s information-technology revolution, and it has equipped him with a goldmine of knowledge — about people, processes, technologies and more. The people element is the most crucial of them all.

Today about 6,000 people, many of them local recruits, work for TCS in foreign countries. This is a great change from the late 1990s, when the workforce, although globally mobile, was still largely Indian. “It is advantageous to have local people manning offices, especially in non-English speaking markets like China, Hungary and Spain,” says Mr Mahalingam.

Generally, TCS employs local people with 15-20 years of experience at senior-level positions. “Local recruits have to understand our unique value proposition, our processes and our approach,” emphasises Mr Mahalingam. “As part of the training, the foreign talent is brought to India and taught the values that TCS stands for. Knowledge of industries such as banking, insurance, manufacturing, healthcare, etc is also shared with them so that they can get a feel of the organisation.”

TCS realised early in the game that it had to be a global player, and not just focused on the United States. The company had spread its reach to Britain, Switzerland and the Netherlands by the mid-1970s. Its Singapore operations began in 1978 and it had set up in Australia by 1979. “We were servicing multinationals, which meant that we had to be in all the markets our clients were in.”

The India edge
Much of TCS’s work is done in India, simply because this is where its largest team is based. This translates into very good cost advantages for clients. Sometimes the work is executed at the client’s site. This is done when the client has to be directly involved, in matters such as specifications, requirements, design validation or implementation.

TCS encourages the people in charge of the development to take over the implementation. This way, the knowledge that the teams gain can be put back into the implementation. Therefore, movement of people becomes extremely important. But in countries where English isn't the main language, it is important to have people who have an IT background, understand the value proposition, and can express it in the local language.

As far as marketing is concerned, it makes sense to have technologists who can conceive a situation and market it, rather than front-end marketing people who can only create the initial opening in a given environment.

There is great benefit to be gained from recruiting good technologists with powerful marketing abilities. “If such people can develop their marketing skills with our help, we place them as marketing personnel,” says Mr Mahalingam. He himself was a project manager before becoming responsible for marketing when TCS opened an office in London in 1977.

From the point of view of growth, there were many questions that TCS had to deal with. Did it need pure marketing people who understood the local conditions well? Was it agile enough to move into a project as soon as it was awarded, or would it be constrained by work-permit rules, etc? Was TCS culturally attuned to the particular foreign country?

Client implications
“If I am doing work that involves mostly programming, then my points of contact with clients are at a minimum. But if I am providing solutions I have to interact with my clients regularly. That requires me to be easy to deal with. This has infrastructure implications, skill implications and, just as importantly, cultural implications.”

TCS created a marketing stream with senior people to size up large projects. The focus was on big clients. This enabled the organisation to make a real difference, and to offer end-to-end services. “The right approach in terms of value proposition is essential, because it allows one to attract the attention of the senior management at large companies.”

One of the ways in which this has been achieved is through the establishment of offshore and onsite centres. Of these, offshore work is popular as clients can get their work done without having to worry about space or communication links. Besides, it does not require local employees. TCS has 10 offshore centres across the globe, with about 50 people each. There are six each in Canada and the United States, and one in Britain.

Developers are given the necessary training. New recruits are sent to Thiruvananthapuram for a four-month course before being transferred to a work location: Chennai for IBM mainframes, Delhi for open systems, and Mumbai for e-business. This is followed by a month’s training in the relevant technology.

Foreign recruits are put through the same kind of training. The only difference is that instead of four months in Thiruvananthapuram they spend only six weeks there. Sometimes the training is conducted in the new recruit's home country. Part of the training consists of soft skills, and information on how to work in a global environment. Also, foreign recruits are taught to be India-sensitive.

Making a difference
A movement called ‘Propel’ has now been initiated at TCS. This comprises conferences and camps to help people conduct group meetings, transfer their learning as a best practice, and make a difference to the company.

Every experienced employee is encouraged to spend at least 20 days every year in TCS’s continuing education programme, which focuses on developing technical and managerial skills. Each role has clearly defined competencies. Therefore, any person moving to a new role has to go through the relevant training programmes.

The first-level management education teaches people how to manage in a TCS environment through the framework of the Tata Business Excellence Model. They go through all the seven categories and learn about customer relationship models, how to manage by data, process orientation, and how the company motivates and energises people.

Management education beyond the project-leader level attempts to provide an MBA type of education to people. This is done in tandem with select management institutes to see if the executive MBA programme can be customised for senior people. These technical and management education programmes are critical.

The growth prospects of foreign recruits are exactly the same as those for Indian recruits. Typically, at TCS one begins as a team member, becomes a specialist, a project leader, and then a manager. From here people can move to the higher levels in managing various practices.

Moving up the ladder
TCS emphasises domain and technological capabilities. “If you ask a TCS employee what he thinks of the organisation, he will say he’s doing extraordinary work: ‘I delivered the solution to the client; I'm becoming the ultimate in this technology; I'm learning a lot; I'm moving up the ladder’.” The culture of the organisation is oriented towards competence and skills, and towards satisfying clients.

Employees are appraised on the basis of performance. SPEED is an Internet-based performance management system which allows employees to adopt practices that they can retain. This is necessary as TCS is a flat organisation where people move from one place to another.

SPEED was easy to implement, as it was accessible through the Internet and the intranet. The earlier system required the filling in of a three-part booklet: what people had accomplished, what their supervisors said and the discussions that took place. It was too subjective. Now TCS has configured the system to plot a person's performance against the goals set, grading them on a scale from 1 to 5.

At the junior level, individual performances get a higher variable allowance, because a person has limited scope to influence the big picture at the team-member level. At the senior level, how the project or sector is doing becomes a major factor. The focus at these levels is on the creation of economic value for the project and the organisation, not merely on improving individual performance.

Total incentives are distributed in such a way that 50 per cent goes towards improvement in corporate performance, 30 per cent for business-unit performances and 20 per cent for individual performances.

TCS has not yet included overseas employees in its EVA system. Performance compensation requires different approaches in different countries. These things have to be understood in the cultural context (in some countries, people prefer to get their salary components in fixed amounts).

Today TCS has truly spread its wings to become a global organisation. It encourages people to believe in themselves, set their own goals and drive themselves. What it promises them is the right environment to enhance their abilities and make a difference to the organisation.