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 requirementsMinimizing variances in processes
Elimination of wasteEfficient Product ServiceContinuous Process
Improvements
DarpanThe 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.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.
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
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 Leverage IT as a strategic
driver for competitive advantage, not just as a business
utility
GLOBAL NETWORK DELIVERY MODELGlobal 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.
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 ODconsultants 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 corporategoals, 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 SatisfactionIdentification 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.
PROPEL-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.
THE SYSTEM CALLED TCS
Output(tangibles): Increased revenue pat(profit after tax)
profitabilityServices- Application development and maintenance
Business intelligence Enterprise solutions Assurance engineering IT
infrastructure services BPO Consultancy Asset leveraged solutions
Eco sustainability services 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 SoftwareProcess 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
HUMAN RESOURCE PROCESSES
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.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
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 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.STRUCTUREThe 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
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.
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 bottleneckA 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
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
ServicesSoftware: TCS BaNCS TCS Technology ProductsIntegration
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
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
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 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 ECG-monitoring 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), 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.
CONTEXTUAL DIMENSIONS OF ORGANIZATIONAL DESIGN
SIZE-The 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.
CULTURE-the culture at TCS can be explained with the following
diagram:-
PORTERS FIVE FORCE MODEL-
SUGGESTED CHANGES IN ORGANIZATION DESIGNSTRATEGY: 1. 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.1. Lack of a structured approach to evaluate,
imbibe and disseminate the best practices.1. Although it has an
understanding of its competitive position, but the measurement,
assessment and impact of the threat is not well defined. 1. 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:1. 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.1. Lack of alignment in the
results of the performance analysis with business results and
objectives.1. The performance projections for measures and
indicators have not been fully evolved, the absence of these
measures. This hampering the goal setting process .PROCESSES:1. 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.1. . Risk taking,
expressing differences and constantly generating new knowledge
should be encouraged among the employees.1. The lack of integration
of process improvement initiatives such as PROPEL, PEEP etc., which
influence the associate, work environment.1. The absence of a
well-defined approach to evaluate the cost effectiveness of
digitization process.
Lateral Processes
PEOPLE:
1. 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.1. 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
2. www.TCS.com2. http://www.wikipedia.org/2. TCS Ultimatix2.
Organiization Theory Change and Design- Richard L. Daft
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