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TCS Tata Consultancy Service
TCS Tata Consultancy Service
TCS Tata Consultancy Service
Submitted by: Abhisekh Garg (08BS0000105) Asish Kumar Sahu (08BS0000643) Birendra Kumar (08BS0000771) Happy Lamba (08BS0001153) Javed Pirani (08BS0001279) Pranjal Kumar Das (08BS0002282) Surya Shakti Mohanty (08BS0003500) Tanmay Khuntia (08BS0003571)
Mission To help customers achieve their business objectives, by providing innovative, best-in-class consulting, IT solutions and services. To make it a joy for all stakeholders to work with us
Values Leading change, Integrity, Respect for the individuals, Excellence, Learning and Sharing
Contents
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Table of Contents3 List of Illustrations..4 Part Wise Description5 History of TCS.6 TCS-A Fact File7 Heritage & Values8 TCS-The Ace Performer9 Products and Services.11 Business Analysis12 Brand Equity, Competencies and Value Proposition.13 TCS-Michaels Five Forces Model...15 TQM Implementation at TCS..17 TCSs Global Network Delivery Model..19 TCSs Point of Focus21 Growth Strategy23 TCS Co-Innovation Network.25 Organization Development at TCS26 TCS- The Paradigm Shift..29 Refrences30
List of Illustrations
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Fig: TCS Global-Page 8 Table: Product and Services-Page 11 Fig: TCS- One Crucial step at a Time-Page 11 Table: Growth and Value Drivers-Page 12 Fig: Share Price Movement-Page 12 Fig: Revenue from industry verticals in FY 2007-08-Page 13 Fig-The IT services value chain-Page 14 Fig: Every Thing Checked-Page 16 Fig: TCS- A Combined Effort-Page 18 Fig: Green theme for Corporate Sustainability-Page 19 Diagram: TCS Global Delivery Model-Page 20 Fig: TCS the CTO Based Organization-Page 20 Fig: Product Development Issues-Page 24 Fig: TCS COIN(Co-Innovation Network)-Page 25 Fig: TCS-The Way Forward-Page 28 Fig:TCS-Together we Can-Page 29
History of TCS
Tata Consultancy Services was established in the year 1968. TCS is considered a pioneer in the Indian IT industry. Despite unfavorable government regulations, like the License Raj, the company succeeded in establishing the Indian IT Industry.It began as the "Tata Computer Centre", a division of the Tata Group, whose main business was to provide computer services to other group companies. F C Kohli was its first General Manager. The legendary JRD Tata was its first Chairman and was followed by luminaries such as Nani Palkhivala. One of TCS' first assignments was to provide punch card services to a sister concern, Tata Steel (then TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of India. It also provided bureau services to Unit Trust of India, thus becoming one of the first companies to offer BPO services. In the early 1970s, Tata Consultancy Services started exporting its services. TCS's first international order came from Burroughs, one of the first business computer manufacturers. TCS was assigned to write code for the Burroughs machines for several US-based clients . This experience also helped TCS bag its first onsite project - the Institutional Group & Information Company (IGIC), a data centre for ten banks, which catered to two million customers in the US, assigned TCS the task of maintaining and upgrading its computer systems. In 1981, TCS set up India's first software research and development center, the Tata Research Development and Design Center (TRDDC). The first client-dedicated offshore development center was set up for Compaq (then Tandem) in 1985. In 1989, TCS delivered an electronic depository and trading system called SECOM for SIS SegaInterSettle, Switzerland. It was by far the most complex project undertaken by an Indian IT company. TCS followed this up with System X for the Canadian Depository System and also automated the Johannesburg Stock Exchange (JSE). TCS associated with a Swiss partner, TKS Teknosoft, which it later acquired. In the early 1990s, the Indian IT outsourcing industry grew tremendously due to the Y2K bug and the launch of a unified European currency, Euro. TCS pioneered the factory model for Y2K conversion and developed software tools which automated the conversion process and enabled third-party developers and clients to make use of it. In 1999, TCS saw outsourcing opportunity in E-Commerce and related solutions and set up its E-Business division with ten people. By 2004, E-Business was contributing half a billion dollars (US) to TCS. On 9th August 2004, TCS became a publicly listed company, much later than its rivals, Infosys, Wipro and Satyam.During 2004, TCS ventured into a new area for an Indian IT services company - Bioinformatics. During the recent couple of years TCS has been on the growth of progress. Both nationally and internationally TCS is recognised as the higly respected IT company and has surely put India on the worlds IT map large and clear. 6
Headquarters
Ratan Tata, (Chairman of the Board, Tata Group) S Ramadorai, (CEO and Managing Director) Jobhi Mahalingam, (Executive Director and CFO) N Chandra, (Executive Director, COO, CEO Key people & MD Designate) Phiroz Vandrewala,(Executive Director and Head, Global Corporate Affairs) Ajoy Mukherjee, (Vice President and Head, Global Human Resources) K Anantha Krishnan, (Vice President and Chief Technology Officer) TCS Bancs, Digital Certification Products, Healthcare Management Systems Information Technology Consulting, IT Services, Outsourcing, BPO, Software Products US$ 6.015 billion (in FY 2008-09)
Products
Services
Revenue
Net income US$ 1.123 billion (in FY 2008-09) Employees Website 143,000 (As on 1 April, 2009) http://www.tcs.com
TCS' growth has occurred within a challenging economic climate. The Company has demonstrated leadership, remained disciplined in execution and faced a volatile market with a positive 'can do' attitude. The recession which began as a client-specific US instance expanded to an industry-generic malady and affected global businesses. While there has been some impact on the short-term growth rates of the Indian IT industry in this financial year, TCS' value proposition to global business remains strong. Looking towards the future, the Company will remain focused on agility, innovation and operational excellence. TCS has always adapted quickly to changing circumstances by its responsive and creative thinking. For customers, TCS presents an enviable value proposition enabled by four decades of experience, domain knowledge, technology excellence and offerings of full services play. TCS is well poised to gain advantage from newer areas such as Healthcare, Energy, Utilities and Telecommunication including the impact of new technologies such as Broadband, 3G, WIMAX, LTE and others. TCS continues to invest for the future. Sustainability, Green IT and Cloud Computing are areas of opportunity and your Company is leveraging these. The Cloud Computing based IT services model for small and medium enterprises, currently being piloted in India, is an example of a business model innovation that will set a new precedence in the IT industry. Such initiatives can be replicated, once they are mature, into multiple global markets. TCS' platform-based BPO initiatives in areas like Human Resources and Finance and Accounting will also contribute to future growth. TCS has been continuously making investments to open up new markets and services. The investments the Company has made in new growth markets like Asia-Pacific, Latin America and now in Middle East and Africa are attaining scale, size and a meaningful presence. In 2008-09, the new growth markets grew at a rate of 16%. The Company's vast pool of human capital is helping chart the Company's future progress not only in terms of its business but also by its impact on the community. Over 50,000 hours of volunteering effort was expended by TCSers, in the past year. One area where considerable progress was made has been in the area of corporate sustainability. The increased environmental consciousness across the organisation has resulted in reduction in air travel, 8% drop in electricity consumption, lower paper and printer cartridge utilisation. This coupled with 'green' buildings and 'green' technologies has helped reduce carbon footprint this year. TCS continues to be an engine of growth because of its proven ability to reinvent the organisation and the business. The Company is positioned to work in collaborative mode, learning constantly, critically evaluating all that it does and demonstrate the leadership it is known for. Thanks to the employees and their extended families, the many shareholders and the community at large, the future holds new promise for TCS as a top technology company globally.
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TCS Silicone Ambulatory ECG Enterprise Solutions Device and Solution TCS Enterprise Integration and Control Environment Solution/ Consulting Energy and Utilities Business Process Outsourcing
(Public
TCS Certificate Validation Server TCS File Authentication Solution TCS eLearning Effectiveness Measurement Solution TCS Code Generator Framework Source: company website Fig: TCS- One Crucial step at a Time
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Promotional Certainty
campaign
Experience
Cost cutting by Efficient systems Business Restructuring Software Package prices gone up by approx. 6.1 % GNDM: One service standard to customers globally. Technology & labor cost benefits : Keeping India as key operations location
joint
ventures
and -
Expanding in Multiple geographies with infrastructure investment in Europe & Latin America Acquiring new Clients : Twenty large (US$ 50 million-plus) deals
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To study companys Brand Equity, its core competencies and value proposition to the customers.
Industries being served by TCS: The Industry verticals where the Company has a sizable presence are Banking & Financial Services Insurance Manufacturing Telecommunications Life Sciences and Health Care Retail Transportation Utilities Entertainment and Media
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Low
Satyam
HCL
Low
Cost
High
Till now, the clients have been coming to India IT vendors saying Go build this IT system for me while they go to a foreign IT consulting firm saying Go solve this business problem for me. This reflects the space that Indian IT organizations occupy in the value chain. They are predominantly seen in the application maintenance (and to a lesser extent in application development) and infrastructure management space. Clients typically engage them in low risk - low cost projects while foreign IT firms tend to get mission critical projects (high value and high cost) where they understand business problems, decide the IT strategy for their clients along with building applications and managing them
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A key concern for TCS is competition from existing players as it has generated competition for existing business and created significant pricing pressures. Globally, firms such as EDS have positioned themselves as capable of undertaking large, turnkey projects in order to differentiate themselves from competitors such as IBM and Accenture that focus on higher value-added work such as consulting. This suggests an organically-driven growth strategy for TCS: that TCS continue to do the same kinds of work that it currently does, but try to capture a greater portion of the value-addition by undertaking larger projects. Though it has already demonstrated a capability in remote project management, it would be required to further increase this capability. However, there are some risks to this strategy. TCS large size suggests that it may have already maximized economies to scale in applications development. Adding scope, however, offers the potential for large gains since it necessarily involves higher value-added activities. In the early days, this was difficult, partly due to the technical difficulty in de-integrating the value-chain beyond the modularization of applications programming. Over the past few years, however, engineering services, systems design, and systems integration work have increasingly been outsourced (within the U.S.), suggesting that, if the skills are at hand, such work could be done in India. Most of the American providers of such services offer domain and software skills. TCS already has the software skills to move into these areas. But domain skills are a challenge. This reflects a general lack of domain expertise outside the financial services sector in India. Put differently, India does not have global-class, nontechnical knowledge in various other industries. As a result it is difficult to offer the full panoply of services a firm would want when it considers outsourcing a software development activity. This may be being rectified as the liberalization of the Indian economy since 1991 has led to the development of a host of new industry capabilities, such as in insurance. This promises an expansion of domain-specific skills in fields outside the traditional industries but these will develop only gradually. These facts indicate that it will be difficult for TCS as an organization based and staffed primarily in India to change its revenue mix through organic growth. Acquiring Indian firms doing higher value-added business is a possibility, but there are few such firms in the Indian business environment. Essentially, the constraint that TCS faces is environmental rather than firm specific. In most sectors, Indian business conditions are sufficiently dissimilar to overseas client conditions that local domain expertise is of low relevance. The threat of substitutes in software services does exist as technology tools to speed coding etc. However, at this time the threat of substitutes seems rather remote. Fig: Every Thing Checked
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Total quality management (TQM) process adopted by TCS, its implementation and implications during implementation across China.
TQM: TCS takes responsibility for the products and services it delivers. Their Quality Management processes ensure that the service they deliver has minimal defects. TCS also provides warranty periods in its contracts with its customers for after-delivery service in the case of a defect. TCSs commitment to quality and schedules ensures that the client's needs are met consistently. It adopts a systematic approach to problems and encourages experimentation, innovation and creativity in finding feasible solutions. Being a process-oriented organization, TCS believes that the definition of a good process and subsequent adherence to that process is a critical part in ensuring a successful project. Quality Management System: TCSs Quality Management System (QMS) is based on the ISO 9001:1994, IEEE standards, ISO 9001-3 and CMM Guidelines. Well-defined architected processes are adopted for development, implementation, maintenance and conversion projects. These processes are defined in the Process Handbook documents which form a part of the TCS QMS. TCS also conducts different reviews at different stages of the project life cycle to ensure high quality. Reviews: There are three levels of review that are performed- Internal Quality reviews, performed by members of the project team, External Quality reviews that are carried out by analysts external to the project team and a Final Inspection to make sure all open defects and suggestions have been closed. The objectives of the review will be to ensure that The project requirements are met No errors have been introduced Standards are adhered to Testing has been adequate
Testing: Different type of testing is done to make sure that the system works at its most minute level, as well as a whole. Unit Testing: Testing each module/block as a single unit Integration Testing: Testing the different interfaces of the system to make sure it works as a whole. System Testing: Testing the system for system level functionality, security, external interface, usability and integration of the different modules under it. Acceptance Testing: Based on pre-defined acceptance criteria, the client conducts the acceptance test during this phase. The TCS team provides support during this phase.
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The following awards/certifications have been received by TCS in the areas of Quality Management JRD-QV Appreciation received the second consecutive year in a row (Based on the Malcolm Baldrige National Quality AwardAmericas highest honour for performance excellence- which was established to promote quality awareness, to recognize quality and business achievements of U.S. organizations, and to publicize these organizations successful performance strategies). ISO 9001 Certification: TCS had been certified enterprise-wide; with the certificate being applicable till 2008. The audit was carried out by RWTUV Germany. CMMI Level 5 Certification: TCS had been certified enterprise-wide; with the certificate being applicable till 2007 end. The audit was carried out by Ron Radice from SEI and Bill Hefley (coauthor of P-CMM) as lead assessors. Fig: TCS- A Combined Effort
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Delivery centers and their role in TCSs GDM are depicted below: -
Offshore (India)
Onsite
Risk mitigation, Access to local markets with advantage of lower development cost Domain knowledge Proximity to clients Access to new geographies
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have won individual laurels and awards. The Companys R&D organisation has grown and has more than doubled the number of PhDs. TCS R&D has attracted top talent from notable universities across the world and its research internship program brings interns from many world class universities to the labs. Corporate Sustainability has always been at the core of TCS corporate DNA. With strong focus on education, health and environment, Corporate Sustainability in TCS is driven by the Tata Groups vision of giving back to the society. The primary driver of this effort has been through volunteering by TCSers. With Maitree, the employee engagement platform as an effective facilitator, TCSers spent over 50,000 person-hours during 2008-09 on community initiatives such as education, healthcare support, training differently-abled people. A long-term focus has been to effectively use TCScore competence in IT to drive literacy through the Computer Based Functional Literacy (CBFL) Program. Conceptualised in 2000, the CBFL Program has grown to cover nine languages today. Over 120,000 people have been trained with the help of CBFL till FY09. The decrease in overall instruction hours has led to significant decline in dropout rates, especially among women. CBFL has been instrumental in enhancing literacy across AP, TN, MP, Maharashtra, UP, Delhi and Rajasthan while Orissa, Karnataka and Uttarakhand will implement it shortly. TCS IT Wiz, Indias biggest technology quiz for schools completed a decade in 2008. It is a benchmark in the inter-school quiz circuit for the intensity of competition and the numbers that it draws. Covering 12 cities, the TCS IT Wiz has emerged as a key vehicle to create awareness about IT among school children. In 2008-09, around 15,000 children participated. Corporate Sustainability (CS) in TCS has matured to the level where it encompasses a gamut of activities to sustain social transformation globally. TCSers worldwide are CS champions and actively involved in local and global causes in North America, China, Australia and Europe. Business Oriented themes Promote Business Agility Optimise Enterprise Knowledge Conserve the Environment Enhance Health Care Manage Enterprise Risk and Compliance IT Oriented themes Improve Operational Efficiency Application Development and Management Engineering and Industrial Services Simplify and Transform Foster Information Ubiquity Enable Understanding of Customers and Markets Enrich User Experience 22
Sustainable growth indicators still negative: Despite stellar numbers this quarter, the outlook for the company and the sector is far from sunny. Most of the metrics that point to a sustainable turnaround (employee addition, higher onsite, higher T&M, etc.) are still not positive. We expect the performance over the next few quarters to remain volatile between growth and declines. Management commentary cautiously optimistic: Management commentary on the earnings call remains somewhat more optimistic compared to Q4FY09. However, they are still cautious about future growth outlook. All positive statements on good current performance are peppered with comments about macro level uncertainty. One of the keys to high performing teams lies not just in the communication of shared goals, but in getting the climate right. Research by McClelland has shown the strong link between the climate in which people work and their level of performance. Another notable result of this research is that an estimated 70% of climate is created by management style. So, if you want to look at eam performance you have to look at climate, and if you want to look at climate you have to look at the manager's style. When we look at the challenges facing most business leaders today they talk about the need to: Deal with increasingly uncertain environments Create year on year results against increasing competition Constantly strive to do more with less Get teams to take responsibility and step up to the mark
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In conjunction with a team performance intervention, TCS enabled the Director of a Financial Services company to turn a two and a half year backlog around within three months. It focussed critically on the need to square up to performance issues, galvanised the team and its leaders into action, forged and put the spotlight on a common goal and instilled new standards on a previously inefficient group. In a global media company tasked with integrating five teams into one, TCS provided a start point for their improvement process and gave clarity on key issues facing the merged team, specifically: Enhancing leadership style Refining goal clarity and focus Improving communication Working groups focussed on each of these areas and developedaction plans. Finally a bonus system was developed for managerslinked to the positive progress of the climate, making them fully responsible for the climate they created. Within a complex pensions environment, a major IT project team needed to develop a new platform for their products. The team faced significant challenges including A massive increase in scope (moving the IT platform from onecompany to a group-wide application) New political influences and changes through being acquired A significant increase in team size TCS gave the project team a voice; the ability to say what was going right, and what was going wrong. It gave the management team immediate information around what they needed to do to keep the project moving and to cope with the increase in complexity and personnel changes within the team. Having the information that TCS provided enabled the managers to do something about issues as they arose and to take appropriate action. It allowed the Director to address managerialissues and to make his team accountable. It also enabled benchmarking of improvements in performance over time and the comparisons between teams. This in turn increased managers' accountability to get the climate and performance right. TCS enabled the management team to successfully deliver the project and establish the new IT system as the group's platform. Fig: Product Development Issues
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With that 360-degree outlook in mind, TCS has convened a global, interconnected innovation ecosystem the Co-Innovation Network, or COIN that links businesses large and small, well-established and new, with a broad network of partners, suppliers, leading-edge vendors, outside consultants, academic institutions, and venture capitalists. The prime purpose of COIN is to create for IT and the business it supports the largest possible funnel of innovative and profitable ideas from numerous, collaborative sources inside and outside an organization. The key to generating, sustaining, and profiting from innovation is to participate in a multi-organization innovation network that creates a funnel of ideas full and rich enough for some of them to survive the journey from thought to business-transforming action. A true COIN framework needs to be developed to strengthen two key aspects the ideation perspective and the execution capability. One of the principle benefits of COIN is spreading the risk of new undertakings across multiple partners to reduce each partners individual risk, while spreading the search for new ideas across multiple partners to increase the flow of ideas into the funnel and the flow of innovation back to the partners. Once the funnel is filled with ideas, management can take ideas from concept to implementation.
of architecting proactive solutions for the customer. Selectivity in projects: There was a tangible tension at TCS, between generating revenues and organizing strategically, on basis of technology and business areas, impacting selectivity in projects accepted. Pressures from customers on schedules was resulting in faster delivery and hence, snowballing into further pressure on future schedules. Focus on specialization: There was diffusion of expertise and we were yet to focus on building strategic expertise in individual centers. Employees were rotated across domains and skills in the interest of learn ability as well as for meeting requirements. In a sense, there was heightened focus on Voice of the Customer, in comparison to the Voice of Employee. Efforts on Experimentation & Innovation: The management at TCS felt that by and large, employees tended to go straight by the book. Though Dr. De Bonos techniques were introduced and employees trained on these techniques to encourage innovation, there was a need to scale up on perceived rewards for experimentation. Rewards and Recognitions: The reward structure at TCS was, at this point in time, primarily focused on individual performance and we were yet to explore the institutionalization of team based rewards at the organizational level. Inter group co-ordination & knowledge sharing: Sharing of knowledge was very centre-oriented, and although, informally, best practices spread by interaction and word of mouth, we were yet to evolve a formal system which would capture these for ease of replication across projects. Multiple centers and multiple projects within the same centre ended up resolving the same sort of issues, resulting in avoidable rework. Branding and PR: Image building endeavors were not yet an area of focus and, in a subtle way, this affected the sense of pride of employees. Among educational institutions, this meant greater difficulty in terms of attracting quality talent, which further aggravated stress among the few key performers in the organization. Scenario Building Workshops: An internal organization workshop was conducted with top management for scenario building. This program focused at a larger level, on the The TCS that can be . The idea was to challenge the conventional ways of thinking and to give shape to the key drivers of change through realistic listening and dialoguing. These workshops were followed by dissemination and communication of the scenarios with teams in order to develop a new language in the organization, consistent with the envisaged future scenario. As a fallout of this workshop, several representatives of senior management worked on building scenarios as for e.g. on TCS tools and approach to high end consulting. These looked at what we were and what we wished to be, our competition, changes and challenges with regard to our business models, technologies, products and support functions. Further, the factors that would facilitate the desired change and focuses that needed to be redefined were clearly laid down. 27
Goal Alignment & Balanced Scorecard: In the interest of better alignment, a need was felt to re-look at a few organizational processes and systems, as for instance, the performance management and appraisal system at TCS. A Teach-Train-Transfer workshop on Goal alignment was conducted, with help from expert OD consultants to build the context, to think through goal setting at TCS with a systems perspective to goal alignment & to explore means of institutionalizing goal-oriented performance management within the organization. PROPEL The Intervention: Culture Building at TCS. PROPEL was introduced as a revolutionary intervention with the dual objectives of facilitating the exchange of ideas and helping in immediate problem solving, while also encouraging bonding and self-development among and within teams. Value Cards at the Large Relationship Value card for the relationship was fallout of the analysis of tensions existing in the four dimensions as represented by Voice of Customer, Strategy, Employee and Technology. A tool called Value Card was used to analyze the problems faced by the relationship in relation to these tensions and to arrive at workable solutions to the identified problems, within designated timeframes. The Value Card helped to effectively capture and track this through the following steps: Improvements through Measurements/ Initiatives: Excellence at the large relationship (AEP) The Account excellence program (AEP) at the large relationship was modeled on the lines of the Malcolm Baldridge National Quality Award/Tata Business Excellence Model, which touches upon 7 key categories viz leadership, Strategic Planning, Customer and market focus, Measurement, Analysis and Knowledge Management, HR Focus, Process Management and Business Results. This was aimed to help the relationship to evolve towards meeting changing business needs with agility. Darpan - Reflect and Improve With aggressive expansion and dispersion of ever-growing associate strength in the relationship, communication or the lack of it, had emerged as one of the biggest bottlenecks in employee motivation and managerial decision-making. In this context, an associate satisfaction survey at relationship level christened Darpan was initiated, with the objective to Reflect and Improve at the relationship level through a better understanding of the explicit and implicit expectations of associates. Fig: TCS the Way Forward
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References
www.tcs.com www.nasscom.in www.mit.gov.in www.economictimes.com Indo Asian News Service. InfoTech, IT News- TCS restructures global operations into five groups and 20 units, 13 February 2008. Customer Case Study, Tata Consultancy Services. Impact of recession in American economy on India, by Mr. Tanveer Malik and Ms. Shweta Pandit. Press Release- Tata Consultancy Services sets up strategic unit to expand presence in emerging markets. Article on rediff business desk in Mumbai- whats recession? How will US slowdown hit India? February 14, 2008. Financial Post- contract with India: welcome to a world of outsourcing- by Karen Mazurkewich, Friday, April 25, 2008. Case Study- Evolution of quality processes at Tata Consultancy Services by Dr. Gargi Keeni, September, 2004. Case Study- Innovation in TCS by Chief Technology Officer, TCS, March 31, 2008. Case Study- Process Improvement @ TCS by Pragnya Mishra, 29 January 2004. Case Study by Asit C. Mehta investment Intermediaries Ltd. on TCS. TCS report by Sygnus Business Consulting and Research Pvt. Ltd. White Paper- Evolving IT from Running the Business to Changing the Business. Article on Global Network Delivery Model of TCS. Press Release- TCS receives highest possible rating in market scope for BIPM (business intelligence and performance management). Journal- Globalization of IT services by NASSCOM. Article- TCS to enter into JV with China government, Business Standard, June 30, 2005.ArticleMicrosoft and TCS to open Outsourcing Center in China, Information Week, June, 2005.
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