TCS to unveil new operational structure with four distinct business groups

Mumbai/New Delhi: Tata Consultancy Services will unveil a new operational structure with four distinct business groups being created to drive the next phase of growth for India’s largest software exporter as it eyes the next milestone of $ 50 billion in revenue, top executives in the know told ET.

Starting in April , the IT giant will order its entire business into groups termed as – acquisition, relationship incubation, enterprise growth and business transformation— presenting an industry-first model that moves away from the “traditional three-dimension ( framework) of geography, vertical or services,” sources said, while providing a razor sharp focus on clients, their changing digital needs and faster delivery times.

“ The operating model will be aligned to the customer journey at every step, leaders who have been groomed ( for this model) will lead these new groups,” said one person cited above.

Susheel Vasudevan, currently group head of manufacturing and utilities, will lead the relationship incubation group while Krishnan Ramanujam who is president and head of business and technology services, will take charge of enterprise growth. Business transformation for long term and large clients, will be overseen by Debashis Ghosh, who at present is the president for life sciences, healthcare, energy and public services. Kamal Bhadada, who is President, Communications, Media and Information Services Business Unit at TCS will head a group focused on new business models.

“The leaders of all four groups will report directly to CEO Rajesh Gopinathan who is leading the transformation ,”said people directly aware of the changes afoot at the $ 25 billion company, which has seen its market cap double to $200 billion since April 2018.

In 2017, when Gopinathan took charge TCS had clocked revenue of $18.5 billion for the calendar year.

At present, TCS reports its businesses by industry verticals like retail & CPG, banking financial services, communication among others.

“Existing models have reached a level of maturity that allowed us to free up management bandwidth in new opportunity areas,” said one of the sources.

In response to ET’s queries on the restructuring plan, a representative for TCS said, “ we can’t comment on internal business plans or strategies.”

Eyeing spike in growth

This is not the first time that TCS is restructuring its business framework. In 2008, the company created 23 smaller units of about $250 million each, a structure that helped boost growth from $6 billion in the fiscal year 2008-09 to $19 billion by 2018-19 financial year.

In 2018, the company restructured its industry service units (ISU) to focus on long term strategies such that a group of 200-odd executives were given the responsibility for 3-5 year growth plans.

“The success of this ( latest) restructuring will depend on how much speed we bring to them,” said one person directly aware of the plan, adding that “ the big idea is to make the company, which has close to 6,00,000 people, more agile and attuned with the changing needs of the clients,”

“The new units will be fairly independent and self-sufficient. They will have domain expertise, consulting, vertical know-how, HR, finance, marketing expertise,” the person added.

Measure performance




However, existing customer service and sales teams as well as external reporting of verticals and geographies will remain unchanged.

The current customer “acquisition” unit will bring in new clients, while the new “incubation” business group will handhold clients who are at an early stage of engagement with the company, typically those with revenue below $20 million.

Clients requiring a wider range of services will be overseen by the existing “growth” unit which comprises 200 ISUs.

Finally, the largest customers with long term engagements- ideally $100 million plus clients- will be moved to the new “transformation” unit.

“This structure will help the company to measure its performance in terms of the number of customers moving to each business group,” the sources said.

At the end of the December quarter, TCS had 58 clients in the $100 million plus category, 118 in the $50 million range and 255 in the $20 million plus range.