REALIGNMENT AND RESTRUCTURING AT TCS

As the market decides the strategy to be adopted, structure decides the form, technology decides
capacity and synergy in output comes from the culture, an organizational design is needed to
carry all these together in a holistic manner.
Alignment and Attunement:
The four voices: voices of the employee, customer, technology and wealth need to be attuned.
Hence factors like resource allocation, team-work, learning opportunities for individuals and
teams, factors that would increase productivity need to be paid emphasis.

Goal Alignment & Balanced Scorecard

Importance to goal alignment was now understood & various means to institutionalize
goal-oriented performance management (from the institution to individual levels ) were

considered.
The concept of the Personal Score Card was introduced wherein the goals ,tasks of each
individual was assigned. The Balanced Scorecard approach was proposed which talked
about : Shareholder (Financial Goals ), Technology (Quality, Cost), Customer ( Customer

Satisfaction), Employee ( Learning & Development).

Regular online workflow reviews were carried out to track individual performance

against stated goals. On the basis of these the rewards and incentives were designed.
Focused Career Planning and the Mentoring process was also put in place for the real
talent in the organization.
Account Excellence Programme (AEP)

This dealt with 7 key categories eg leadership, Strategic Planning, Customer and market focus,
Measurement, Analysis and Knowledge Management, HR Focus, Process Management and
Business Results.
The AEP has mainly talked about quality, service, cost and cycle time by benchmarking:

Meeting all customer requirements

Minimizing variances in processes
Elimination of waste
Efficient Product Service
Continuous Process Improvements
Darpan
The presence or lack of communication or the lack of it became one of the biggest hurdles in
employee motivation and managerial decision-making during the aggressive expansion strategy.
In response to this Darpan, was initiated (objective to Reflect and Improve). A Questionnaire was
prepared to collect the preliminary data which included capturing associate feedback across 5
categories :Career &Job, Communication, Culture & Pride, Leadership: and Supervisor.
Outcomes from Darpan

Increase in the Associate Satisfaction Index (ASI)

Increase in Customer Satisfaction Index (CSI).
Teams were now able to associate themselves with the bigger picture of an organization

ie their contributions that added value to the customers and the organization.
Lower attrition
A transparent culture was encouraged.
High focus on Corporate Social Responsibility (CSR)

SERVICES
BUSINESS INTELLIGENCE & PERFORMANCE MANAGEMENT
The business environment today is more dynamic than ever, with mergers and acquisitions,
consolidation and regulatory changes. To succeed, an enterprise needs to develop an ability to
sense these changes, and thus respond to them quickly and smartly. TCS' Business Intelligence
and Performance Management solution helps enterprises in fulfilling the aspirations of being
agile, adaptable and efficient.
TCS SOLAR Framework is a Service-Oriented Architecture (SOA) framework of integration
and information management services. The framework helps coalesce business intelligence,
business process management, enterprise data management, integration and knowledge
management/enterprise content management initiatives, thus driving down the cost of IT and
providing the agility to address changing business and regulatory requirements.
TCS SOLAR Framework helps you optimize and monitor business processes on a granular level.
This could lead to at least 10% increase in operational efficiencies and up to 90% reduction in
cost for adapting to new regulatory compliance requirements.
With TCS SOLAR Framework, the enterprise can achieve the following:

Converge business intelligence and knowledge management through real-time integration

Quickly re-orient your business processes at a granular level in response to business

environment changes
Predict and improve the quality of service
Have the ability to easily adapt to current and new regulatory needs
BUSINESS PROCESS OUTSOURCING

As most organizations today value the merit of staying lean and fit, they are increasingly
looking at outsourcing non-core operations. Adopting this approach allows them to focus on their
core competencies and respond with agility to the ever-changing market and business needs. At
TCS BPO, a strong understanding of industry-specific BPO services and cross-industry solutions
is provided with new business processes and innovative models that seamlessly align with the
business requirements.
3

WHAT TCS PROVIDES

It studies the business processes and identifies how they can provide innovative solutions
that will best fit the business needs and address the challenges the client organization may

face.
Boosting your bottom line through automation, productivity arbitrage and wage cost

arbitrage
Leveraging its existing talent pool and industry experience to become part of the clients

think tank.
Building agility across your organization through strategic initiatives that adapt to

accelerating market trends

Helping you reach out to clients through innovative go-to-market strategies
Reducing time-to-market by creating new go-to-market strategies.

platform
based services
transformation
al outsourcing

ORGANIZATION AMBIENCE AND DCOR

The organization and the office decor in TCS is modern at Noida sector 3 office. Starting from
the reception to the work stations has a modern look. The paintings and the displays with mission
and vision of the company enhances the employee relatedness with the company. The work
stations have a modern look with cubicles in which provide better utilization of space and also
add to the look and feel of the place. There are many conference rooms with stare of art facilities.
Canteen area has a big sitting area which can accommodate 100 people as there are no different
timings for lunch hours and employees of all designations can go in at same hours. Also TCS has
invited proposals from renowned caterers like Sodexho, RKHS etc.

VALUE CREATION MODEL FOR TCS

learning
satisfaction
flexibility
teamwork

processes
,business
excellence,inno
vation,global
delivery
network,innova
tion

value for
investor
s and
employe
es

roi,profitability
,growth,expan
sion,strategic
marketing,reta
ined
earnings.cash

There are certain features that are unique only to TCS that help the organization in creating
value. TCS serves large and fast-growing organizations who share a common set of objectives:

Increase profitability and efficiency by doing more with less

Rapidly and effectively respond to the changing market demands, thereby improving
organizational agility
7

Leverage IT as a strategic driver for competitive advantage, not just as a business utility

GLOBAL NETWORK DELIVERY MODEL

Global Network Delivery Model is the engine that allows TCS to provide reliable, scalable and
cost-effective delivery of services and solutions. This time-tested model has helped it to achieve
a client satisfaction rating of 89% for meeting quality expectations and an average project budget
variation of just 3%, both figures ranging far higher than industry standards.
With TCS' Global Network Delivery Model, clients can choose a sourcing strategy best suited
to your most important business considerations, e.g., cost optimization, cultural alignment,
proximity of location, language capabilities or risk mitigation.
Be assured of the highest quality of service regardless of the mix of services, technologies and
locations.
Lower the Total Cost of Ownership (TCO) of Information Technology by managing different
service streams such as consulting, IT services, IT infrastructure services, etc. with the help of a
unified delivery framework.

global
workforce
integrated
processes
multi-tiered
infrastructure

 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.
The workshop further introduced the concept of the Personal Score Card, and clearly outlined
what would define goals, outputs, performance management, Economic Value adds & the ways
and means for facilitating goal alignment.
The Balanced Scorecard approach was proposed, introducing corporate
goals, which touched upon the following:

Voice of the Shareholder - Financial Goals e.g. Wealth creation

Vector of Technology Technology Goals e.g. Quality, Cost,
Delivery dimensions
Voice of the Customer Customer/ Market Goals e.g. Customer
Satisfaction
Voice of the Employee Learning & Development e.g. Employee
Satisfaction

Identification of talent for higher responsibility was also seen as a key focus area, highlighting
the need to have a focused Career Planning and Mentoring process. The process of role
alignment was further thought through, as well as the need for assessment and coaching for role
transitions. Towards employee satisfaction and towards ensuring sustained availability of
sufficient managerial and leadership talent, the need to create succession plans at all levels and to
track and reward high fliers was brought out.

 PROPELPROPEL 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.

10

THE SYSTEM CALLED TCS

Output(tangibles):
Increased revenue
pat(profit after tax)
profitability
Services-

11

Application development and maintenance

Business intelligence
Enterprise solutions
Assurance engineering
IT infrastructure services
BPO
Consultancy
Asset leveraged solutions
Eco sustainability services

12

Software products-which contribute almost 36% of the total revenue.

Med Mantra - TCS Hospital Management and Information Solution
Tata Accounts Receivable and Billing System (TARABS)
TCS Clin-e2e
TCS Silicone Ambulatory ECG Device and Solution
TCS Enterprise Integration and Control Environment Solution/ Energy and Utilities
TCS Bio-informatics Solution
VERICUT - Machine Simulation Software

Process clouds-TCS is offering solutions with relation to the cloud paradigm in the human
resource management, procurement, analytics as well as finance and accounting.
iON-which is an integrated solution for small and medium integrated markets.
Output(intangibles)

Extremely satisfied workforce

Operational excellence

PROCESSES

13

h
T
p
g
,R
m
o
s
u
C
ic
r
t
n
e
f
lG
d
k
w
a
b
y
v

HUMAN RESOURCE PROCESSES

Talent Acquisition
and management
Talent diversity
Learning and
development
Leadership
development

14

CHALLENGES FACED BY TCS

The major challenges faced by TCS are:
1. ATTRITION: Attrition rate at TCS is at all time high of 16%. Talent retention is the
major challenge faced by TCS. The competitive advantage for a service organization is
from its employees. Losing its efficient employees to its competitors is major downfall
for TCS.
2. COMPETITION: Increased and aggressive competition is a major concern for TCS. A
key concern for TCS is competition from existing players as it has generated competition
for existing business and created significant pricing pressures.
3. REVENUE PRESSURE: To be the top IT Company in India, TCS has to beat the
growth of the other IT companies. This has lead TCS to focus on short term goals, rather
than pursuing long term strategy. TCS is focusing on getting the short term project, to
sustain its revenue and a lesser investment was done to satisfy the long term objective.
4. BARGAINING POWER OF CUSTOMERS: Increased bargaining power of the
consumers and shrinking margins is other challenge faced by TCS. There was pressure
from customers even for schedules for faster delivery.
5. LACK OF DOMAIN KNOWLEDGE: General lack of domain expertise outside the
financial services sector is a challenge. Employees are moved across domains and skills
due, which leads to absence of expertise in domain knowledge. This has also lead to
discontent among employees.
6. SECURITY THREATS to sensitive customer and business data. The challenge for TCS
is to ensure that the sensitive data is secure.
7. ENVIRONMENT: The problem with outsourcing in countries like United States of
America is posing a threat. In the recent times a bill has been passed in the state of New
Jersey that allows only the citizens or legal non-Americans to be given contracts. This
legislation has also affected some other states like Missouri, Connecticut, Wisconsin and
Maryland.
8. MAINTAINING ITS EXCELLENT PERFORMANCE STANDARDS:One of the
major challenges for the Indian information technology industry was to keep up with the
competition in the industry.
9. ECONOMIC CONDITIONS: An increasingly uncertain environment in US and
European economies is a matter of concern for TCS.

15

The organization design is a source to the challenges TCS faces today. The mechanistic structure
at TCS has restricted employees to exhibit their creativity. Lack of autonomy and control
amongst employees has caused lead to lower levels of intrinsic motivation on the job. This had
lead to lower satisfaction levels of employees at TCS which in turn has been leading to higher
attrition levels.
The functional structure and the hierarchal structure dont support team work. Lack of cross
functional teams at TCS also discourages generation of new ideas. TCS hasnt been able to focus
on R&D due to the mechanistic structure, as a result TCS is still struck with the same kind of
work it has been doing. A key concern for TCS is competition from existing players as it has
generated competition for existing business and created significant pricing pressures.
Mechanistic structure has made the organization rigid and is discouraging TCS to foray into
taking up high value projects. The structure has been preventing TCS to adapt to the changing
environmental needs. Globally, firms such as EDS have positioned themselves as capable of
undertaking large, product development projects in order to differentiate themselves from
competitors such as Cognizant and Accenture that focus on higher value-added work such as
consulting.

STAR MODEL OF ORGANIZATION DESIGN FRAMEWORK

16

DESIGN ELEMENTS
STRATEGY: The Companys strategy specifies the goals and objectives to be achieved as well
as the values and missions to be pursued. It sets out the basic direction of the company. TCS
follows a cost leader strategy. The focus for TCS is to attain competitive advantage is to reduce
the per employee cost and attain economies of scale. This is the reason TCS doesnt lay much
importance to R&D.
STRUCTURE: The structure of the organization determines the placement of power and
authority in the organization. TCS has a mechanistic structure wherein the there is a formal
structure and control is imposed on employees. Rules, procedures and a hierarchy of authority

17

help in getting work done in time and with minimum cost. TCS has a matrix structure where is
departments exists based on specialization. Decision making is centralized.
PROCESSES: TCS has vertical processes. The needs of different departments are centrally
collected, and priorities are decided for the budgeting and allocation of the resources to capital,
research and development, training, and so on. Communication tends to follow formal channels
and employees are given specific job descriptions delineating their roles and responsibilities.
Coordination is maintained through the chain of command.

Vertical processes
PEOPLE: People in star model depict the human resource policies of recruiting, selection,
rotation, training, and development. Human resource policies when in the appropriate
combination produce the talent required by the strategy and structure of the organization,
generating the skills and mind-sets necessary to implement the chosen strategy. The employees
in a service organization are the biggest source of competitive advantage. There is continuous
investment in learning, and an active sharing of knowledge with the aim to convert learning into
action.
REWARDS: The purpose of the reward system is to align the goals of the employee with the
goals of the organization. It provides motivation and incentive for the completion of the strategic
direction. The organizations reward system defines policies regulating salaries, promotions,
bonuses, profit sharing, stock options, and so forth. Reward structure at TCS is primarily focused
on individual performances. Team rewards is not a part of the compensation.

18

STRUCTURE
The organization structure adapted by TCS is mechanistic in nature. A mechanistic organization
is characterized by the following structural factors:

Degree of work specialization is high

Departmentalization is rigid

Managerial hierarchy has many layers

Span of control is narrow

Decision making is centralized

Chain of command is long

Organizational structure is very tall

COO AND
EXECUTIVE
OFFICER
HEAD
GOVERNMENT
ISU
HEAD-GLOBAL
PRESALES
SUPPORT

EXECUTIVE
ASSISTANT

HEAD-PMO

CHEIF
TECHNICAL
ARCHITECT/HE
AD
HEAD
BUSINESS
FINANCE

HEAD
PROCESS

HEAD HR

RESOURCE
MANAGEMNT
LEAD

The figure above depicts the organization structure of TCS. which clearly demonstrates it
has many layers of hierarchy and decision making is centralized. While in an organic
structure its a flat organization.

19

CENTRALIZATION VS DECENTRALIZATION:
TCS as an organization is decentralized as there are many functional groups and the main
head/corporate office does not have the entire ownership of various processes. When it comes to
different functional the process is centralized within this functional. For example Recruitment,
L&D and MATC are centralized. For process standardization, TCS used industry standards to
define the fundamental governance processes for centralized services to be implemented across
locations.
As the organization was going through a transformation, clients want a step-by-step solution to
minimize the impact of change. To deliver quick results, the ERP function was chosen to pilot
the implementation of the governance model to deliver centralized services.
Different sectors and companies use the centralized approach. The centralized approaches have
several limitations like an enormous amount of knowledge would be required to be able to deal
effectively with user information requests that cover variety of tasks. A centralized system
constitutes:

A processing bottleneck

A single point of failure

DEPARTMENTS IN TCS:
Departments in TCS can be broadly classified into:
Functional departments: Technical, Sales, Marketing, Development and Operations.
Support department: Administration, IDM and HR

20

21

TCS BUSINESSES
Services:

IT Services
IT Infrastructure Services
Enterprise Solutions
Consulting
Business Process Outsourcing
Platform BPO Solutions
Business Intelligence & Performance Management
Engineering & Industrial Services
iON Small and Medium Business
Connected Marketing Solutions
Mobility Solutions and Services

Software:

TCS BaNCS
TCS Technology Products

Integration Mechanism:
To improve the collaboration between the Industry Solutions Units (ISUs) and Horizontal
Service Delivery Units (HSDUs) and to enhance the efficiency of sales and delivery functions,
the Contract Management System (CMS) and the Project Accounting (PA) modules have been
updated. The changes enable involvement of the HSDUs right from the beginning that is from
the contract and the WON-creation stages of an engagement, to bring in early visibility and
ownership. The HSDUs included are Infrastructure Technology Infrastructure Services (IT IS),
Business Process Outsourcing (BPO), Engineering and Industrial Services (EIS), Assurance
Services, and Global Consulting Practice (GCP).

BEHAVIOR AND FORMALIZATION

22

The behavior in the organization is standard but not very standard and there is some room for
flexibility and adjustment plays an important role in coordinating people and activities.
People: The standard working hours for the organization is 9 hours from 9 A.M. to 6 P.M. and a
proper time swipe- in and swipe- out is maintained through swipe cards. Also officially there is
no provision of flexi hours within the organization. However, in exceptional cases some amount
of flexibility is allowed by the line managers and HR so as to accommodate the employees.
Activities: The activities carried out are very standard and has very low level of flexibility. Some
of the examples are compensation, recruitment and appraisal systems.
The degree of formalization is not very high in day to day activities and oral communication and
written communication when these communications are internal. However, when the interactions
are with client all communications are formal to a very large extent. The rules and regulations are
to be followed with certain degree of flexibility in working hours and application of leaves.

COMPETENCIES

23

Core competencies are particular strengths relative to other organizations in the industry which
provide the fundamental basis for the provision of added value. It is communication, an
involvement and a deep commitment to working across organizational boundaries.
A core competency can take various forms, including technical/subject matter know-how, a
reliable process and/or close relationships with customers and suppliers. It may also include
product development or culture, such as employee dedication, best Human Resource
Management (HRM), good market coverage etc.
The most important competency of tcs which help it in gaining competetive advantage is through
the use of their TCS innovation labs and co-innovation network,their collaborative r&d and
innovation engine that works to successfully exploit and commercialize new ideas,technologies
and best practices. TCS Innovation Labs provide environments in which new domain solutions
can be developed, incubated, and piloted using the latest technologies in a cost-effective
environment before enterprise-wide deployment. They give TCS customers on-demand access
to innovation and creativity with a team comprising of domain experts, business process
analysts, technology specialists, and an R&D team.

Various innovation labs of tcs are as follows

24

TCS Innovation Lab Convergence-The lab works on Content Management Systems,

content delivery systems, convergence engines, networks such as 3G, WiMax, WiMesh,

IP Testing for Quality of Service, IMS, OSS/BSS systems, and others.

TCS Innovation Lab, Delhi-focus of this lab is emerging technologies such as Software
Architectures, Software as a Service, Natural Language Processing, Text, Data and
Process Analytics, Multimedia Applications and Graphics. The lab has developed the
TCS Instant Apps Technology, which enables development of situational applications
entirely within a browser and by business analysts instead of by developers, and TCS
Natural Language Interface Technology, which enables conversational interaction with

business applications over email, chat, and SMS

TCS Innovation Lab - Embedded Systems-focuses on multi modal sensing, wireless
communication, security, and intelligence. Technologies of focus include medical
electronics, WiMAX, and WLan. This lab has developed the Silicon Locket, an ECGmonitoring system for remote cardiac diagnostics and tele-consultation that makes
healthcare patient-centric. The Embedded Systems lab has also developed the WiMAX
(IEEE 802.16), the next wave of wireless technology to provide an elegant solution for

last-mile connectivity.
TCS Innovation Lab, Hyderabad: Focuses on computational methods in life sciences,
meta-genomics, systems biology, e-security, smart card-based applications, digital media

protection, nano-biotechnology, quantitative finance

TCS Innovation Lab - Media and Entertainment-digital media distribution, digital
asset management, theatrical distribution systems, contracts and rights management

systems, ERP, data warehousing, application maintenance outsourcing etc.

TCS Innovation Lab, Mumbai: Focuses on speech and natural language, wireless

systems and wireless applications (BREW Centre of Excellence).

TCS Innovation Lab - Peterborough, England: Focuses on New Wave
Communications for Enterprise (SIP based IMS platform technology, browser based Web
2.0 portal technology), Enterprise Search (Cach database technology), Enterprise 2.0
(Browser based Web 2.0 technologies), Utility Computing (solution based on Cassatt
technology), RFID (chips, tags, labels, readers and middleware) etc. This lab has
developed SIP-based communication solution (in collaboration with InnovaLab, Chennai,
India), Web 2.0 and SOA based solutions (in collaboration with iLabs, New Delhi, India),

25

enterprise search solutions, utility computing solutions, and RFID based hosted solutions

(in collaboration with RFID Lab, Kolkata, India).

TCS Innovation Lab TRDDC- focuses on minerals and materials, optimization and
mathematical modeling, process modeling and computational fluid dynamics, thermal
processing, and virtual manufacturing.

26

CONTEXTUAL DIMENSIONS OF ORGANIZATIONAL DESIGN

size

culture

contextu
al
dimensio
ns
goals and
strategy

organisatio
nal
technology

environmen
t

SIZEThe total strength of the organization is around 214,770 while the size of the development center
at noida that we visited has a strength of around 1000, out of which 30% are females. TCS is one
of the largest private sector employers in India with a core strength 214,770 individuals.TCS has
turned into the second-largest employer among listed companies after Coal India Limited. But
the biggest employer in the country is Indian Railways with 16 lakhs employees. TCS's BPO arm
had revenues of $925 million in the year that ended in March 2011, and has 34,000
employees.TCS has one of the lowest attrition rates in the Indian IT industry.

27

CULTURE-the culture at TCS can be explained with the following diagram:-

focus on
developing
leaders

fully satisfy
and generate
increasing
value for
customers and
other
stakeholders

TCS
cultur
e
managing
customer
relationshiips

28

identifying your
competencies
as well of your
team mates

PORTERS FIVE FORCE MODEL-

29

SUGGESTED CHANGES IN ORGANIZATION DESIGN

STRATEGY:

IT business in India is saturated with players which follow a cost leader strategy. The
increasing margin and time pressure from clients warrants that TCS shifts its strategy
from that of a cost leader to differentiator. This would help TCS to target projects which

are high on value chain.

Lack of a structured approach to evaluate, imbibe and disseminate the best practices.

Although it has an understanding of its competitive position, but the measurement,

assessment and impact of the threat is not well defined.

Though the short-term horizons have been addressed the organizational strategic
objectives in the long term have not been much taken care of.

STRUCTURE:

TCS needs to have organically driven structure which would foster collaboration and
team work. Cross functional teams are necessary to deliver products which are above the
value chain. The environment is highly uncertain, unstable or subject to vary rapid
changes in market conditions. There is a need that personnel are empowered to make
decisions and resolve problems themselves.

REWARDS:

The reward system must be congruent with the structure and processes to influence the
strategic direction. Reward systems are effective only when they form a consistent
package in combination with the other design choices. The reward system at TCS has to
change from individual to team based. Incentive for the employees to perform as a team

needs to be there for delivering superior products.

Lack of alignment in the results of the performance analysis with business results and

objectives.
The performance projections for measures and indicators have not been fully evolved, the
absence of these measures. This hampering the goal setting process .

30

PROCESSES:

TCS needs to have horizontal processes, also known as lateral processes. It is designed
around the workflow, such as new product development or fulfillment of a customer
order.TCS should build a culture of encouraging thinking &creating forums for dialogue,
while encouraging leadership at all levels as the attributes of Customer Satisfaction
measurement show some degree of variance to that of the

stated customers key

expectations.

. Risk taking, expressing differences and constantly generating new knowledge should be
encouraged among the employees.

The lack of integration of process improvement initiatives such as PROPEL, PEEP etc.,
which influence the associate, work environment.

The absence of a well-defined approach to evaluate the cost effectiveness of digitization

process.

Lateral Processes

PEOPLE:

31

Human resource policies also build the organizational capabilities to execute the strategic
directions. The employee needs to be given autonomy and control over their work which
would help in encouraging creativity. Valuing of employees should be institutionalized
through establishing processes that enable and enhance individual performance.

The productivity levels of people is lower than that of its competitors majors so
improving an employees realization would enable it to achieve its stated vision
.

REFERENCES
1
2
3
4

www.TCS.com
http://www.wikipedia.org/
TCS Ultimatix
Organiization Theory Change and Design- Richard L. Daft

32