Soft-wired to succeed
The Economic Times — September 12, 2006

It has been a pioneer in the field of information technology and has quietly gone about becoming the largest software services company in Asia. It's hardly a surprise then that Tata Consultancy Services (TCS) beat the competition to gamer ET's 'Company of the Year' Award this year. S Ramadorai, MD and CEO, TCS, reacted to the news saying: "It is a matter of great honour that ET has chosen to recognise TCS. It's a reflection of the efforts put in my TCSers over the years, which has brought us to this stage. It's particularly heartening that ET which is well known internationally and is a leader locally has chosen to recognise these efforts."

There are very few information technology companies in India which are in the same league as TCS, and it could be argued that TCS is undoubtedly the first among equals. TCS has had a remarkable run in the past one year. Not only did it bag the largest BPO contract in UK from the Pearl group, it also formed a joint venture with the Chinese government, which impressed Microsoft enough to pick up a stake in it.

The company has signalled its aim to be one of the global IT giants with its acquisitions-Australian software product company, FNS, and a BPO service company in Chile - in the recent past and with its wide variety of offerings such as software products, application development and maintenance services, enterprise solutions, asset-leveraged solutions and BPO services. It has been growing at a faster clip than its peers Infosys and Wipro because of the large contracts it has been winning.

What is perhaps even more staggering than the high rate of growth is the fact that this is no small company. TCS has an employee strength of more than 71,000 and its consolidated revenues have crossed $3bn. A tiny peek into the numbers leaves you gasping. TCS ended the FY06 with a consolidated sales growth of 36 per cent at Rs 13,252 crore and notched up profit growth of 50 per cent at Rs 2,967 crore. The present looks rosy enough, but the company is working hard to ensure that it can retain this pre-eminent position even in the future.

To that end, the company is working on de-risking its business model by broad-basing its revenue stream. Top 10 clients' contribution has been brought down to 27 per cent from 30 per cent in FY05. Simultaneously, client engagements have grown in size. TCS ended 2005-06 with more than 256 million-dollar clients.